Ask a CEO what a bad sales hire cost them and you will usually hear a salary figure. That is the smallest part of it. The bigger cost is the revenue that never arrives while the wrong person holds the seat, while the seat is empty, and while the replacement gets up to speed.
How common is it?
Very. The Recruitment & Employment Confederation found that 85% of UK businesses have made a bad hire.[1] In sales the risk is sharper, because the role is visible, measured and hard to fake for long. Across more than 170 SaaS companies, only 51% of account executives reach quota, and 19% leave each year involuntarily, more than the 11% who resign.[2]
The UK benchmark
REC's worked example of one poor hire on a £42,000 salary comes to £132,015, more than three times the salary. Of that, £83,160 is knock on cost to the rest of the team: lost productivity, management time and morale.[1]
A worked example for a sales role
Take an account executive on £90,000 on target earnings, carrying a £450,000 annual quota. This is the same model our free Leak Finder uses, so you can run it with your own numbers.
| Cost | Amount | Basis |
|---|---|---|
| Pay before the hire is exited | £60,000 | 8 months of £90,000, as in the REC example[1] |
| Agency fee to replace | £13,500 | 15% of salary, the REC rate[1] |
| Onboarding and training, twice | £3,000 | £1,500 each, as in REC[1] |
| Sales lost while the seat is empty and the new rep ramps | £245,250 | 3.69 months to fill[3] plus half of a 5.7 month ramp[2], at £37,500 of quota a month |
| Total cost of one wrong hire | £321,750 | Before any knock on cost to the team |
The cash cost here, £76,500, sits close to DePaul University's average replacement cost of $97,690.[3] The number that hurts is the £245,250 of lost selling time, which most companies never put in the business case. We assume 50% output during the ramp, which is generous for a new hire.
Why it keeps happening
- Hiring in a hurry. A target is due and the seat is empty, so the first convincing candidate gets the job.
- Hiring on charisma. Sales candidates interview well by definition. Without a practical test, the interview measures the wrong skill.
- No definition of good. What works in a large company with a brand and a pipeline rarely works in a scale up where the rep has to build both.
- Weak onboarding. A good hire with no plan for the first 90 days can look like a bad one by month four.
How to avoid it
- Write a scorecard before you advertise. Define the outcomes for the first year, the market and the stage of the business, not just a list of traits.
- Test the job, not the interview. Run a role play of a real discovery call or negotiation with your own scenario.
- Check the track record properly. Ask for numbers against quota, deal sizes and sales cycles, then test them in references.
- Plan the first 90 days before day one. Accounts, targets, coaching rhythm and the point at which you will review progress.
- Decide early. If it is not working by the agreed review point, act. Every extra month adds to the bill above.
If you are about to hire or promote into sales, our Talent Identification service builds the scorecard, interview plan and practical assessment with you, and joins the interviews.
Questions we are asked
How much does a bad sales hire cost in the UK?
REC's UK worked example puts one poor hire on a £42,000 salary at £132,015 including knock on costs. For a sales role on £90,000 on target earnings with a £450,000 quota, pay, fees, training and lost sales come to about £322,000.
How long does it take to replace a salesperson?
DePaul University research found 3.69 to 5.42 months to fill a sales role. Bridge Group data shows a further 5.7 months for a new account executive to ramp to full productivity.
What is the biggest hidden cost of a bad sales hire?
Lost selling time. While the seat is filled by the wrong person, then empty, then ramping, the quota attached to it is largely not delivered. In the worked example that is £245,250, three times the cash cost.
Sources
- Recruitment & Employment Confederation, Perfect Match: making the right hire and the cost of getting it wrong, June 2017
- The Bridge Group, 2024 SaaS AE Metrics and Compensation report, more than 170 B2B SaaS companies
- DePaul University Center for Sales Leadership, 2015 to 2016 Sales Effectiveness and Sales Acceleration Survey, research brief