Sample frameDay 182·Hiring · Cost

Good morning. Somewhere behind you is a hire that cost more than any deal you lost that year. Nobody ever added it up.

Hiring.

The Cost of a Mis-Hire

5 min read·Apply by lunch

The question

You already know which hire this is about — the one you should never have made: can you tell me, to the nearest ten thousand, what that person cost you once you've counted the severance, your own lost year, the work their colleagues quietly redid, and the customers who left when they did?

The idea

Bradford Smart, an American industrial psychologist who spent his career assessing managers, published Topgrading in 1999 and did the thing the hiring industry had mostly avoided: he added up the whole bill. His mis-hire worksheet walks the categories one at a time — what it cost to find them, what you paid them, what it cost to keep them in the job, what it cost to end it, the mistakes made and the business that never happened, and the disruption left behind in the people around them — then subtracts whatever they genuinely contributed. Managers who ran their own bad hires through it came back with totals that ran to multiples of base salary, not fractions of it. Every one of those costs lands somewhere else. Severance is a legal line. The redone work is somebody's overtime. The customer who left is attributed to the market. Your own lost year disappears into 'a difficult period'. It's Day 116's problem arriving in the payroll: the accounts file costs by where they fall, never by what caused them, so nothing in your books ever assembles the bill. Which is why the manager who can quote the recruiter's invoice from memory has never once seen the real number.

The framework

01
Cost your last bad hire before you cost the next one.
Pick one — a real person, a real seat, ideally two or more years back so the consequences have finished arriving. Open their file and their old calendar, then work the categories in order: what you spent finding them, what you paid them including on-costs, what it cost to keep them working, what leaving cost, what went wrong or never happened while they held the role, and what the people around them absorbed. Subtract what they did contribute, honestly. Don't write ranges — they're how this exercise gets quietly avoided. It's uncomfortable work, and it's the only version of the argument that survives a hiring manager in a hurry.
02
The two costs nobody invoices: your year, and their colleagues'.
The two largest lines don't appear on any invoice. The first is management attention — the extra one-to-ones, the work you checked twice, the improvement plan, the three months you spent deciding whether to act. The second is what the team carried: the work quietly redone, the strong people who covered and resented it, the ones who read your tolerance as the new standard and adjusted to it. That last group is the expensive one. Price the first at your own fully loaded cost, for whatever share of your year it took. Price the second by asking the two colleagues who sat closest what their weeks actually looked like.
03
Now put it beside the cost of the empty seat.
Day 90 gave you the arithmetic for what a week of waiting costs; this is the number that belongs on the other side of it. Work out what one more month with the seat empty costs — the revenue that doesn't land, the work spread across people who already have jobs, your own hours in the gap. Then take your total, multiply it by how often you get this wrong, and compare the two. Hardly anyone's put a figure on their own mis-hire rate, which is convenient. Guess honestly and a fortnight of extra diligence usually turns out to be bought with rounding error.
04
The number is only useful if it changes a rule.
A cost figure that lives in a document changes nothing. Convert it into one standing rule you'd have to break deliberately — a minimum number of interviews before any offer, a piece of real work set and marked, a decision that never gets made in a corridor. Write the number next to the rule, so the rule has a price behind it. The pressure will come, and it'll come from you, in a week when the role has been open too long and somebody decent is available. The rule is what's left of this morning's arithmetic.

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