8 years ago
April 18, 2016

How Much Does It Actually Cost When You Make Hiring Mistakes

When you hire the wrong sales professional, it’s more expensive than you might think. Find out how much it actually costs to make hiring mistakes.

Rhys Metler

There’s no doubt that turnover is high in sales—much higher than in most other departments. You’re probably constantly losing and hiring new sales people all the time. Either the sales reps you hired didn’t have what it takes to close sales and had to be let go or they decided on their own that the job or your company wasn’t for them.

Either way, making sales hiring mistakes is more than just an inconvenience for your sales department and your company. It’s actually pretty expensive, too. It costs more than you might think. If you were to drill down the individual expenses associated with hiring mistakes you might be surprised at how much you’re really losing. And it could be putting a big dent in your company’s profits.

The Cost of the Hiring Process

Going through the motions of your hiring process takes time, and this translates into money lost. Consider how much time is spent on writing the sales job description, on reviewing applications, on interviewing candidates, and on doing reference checks for each person. When you’re getting a hundred plus resumes for a single position that is left open because you made a hiring error, you’re wasting a lot of time on the hiring process. During that time, your other daily responsibilities are piling up, not being done.

Other costs associated with the hiring process can also be monetary. You can have the cost of hiring a recruiter, the cost of advertising the position, and the cost of doing drug testing, skills testing, performance assessments, and background checks, too.

And keep in mind, if this position is open because of a hiring mistake, you’ve already paid all of these costs for the position once, and now you’re paying double to find a replacement.

The Cost of Training and Onboarding

Every sales organization will go about training in a different way, but it’s always going to cost you money. You’ll have the administrative costs associated with the onboarding paperwork, employee badge, and other employee set-up requirements. You’ll have the cost of any training materials or trainer you hire. And you also have the cost associated with the time spent on training that new hire. Sales hiring mistakes mean that you’re spending all of this time and money on new sales people who won’t produce an ROI—they’ll likely quit or be terminated before they make enough sales to cover the cost of training and onboarding. Those new sales reps will just be a drain on your sales team’s time and your manager’s time while they’re being caught up to speed.

The Cost of Lost Opportunities

Then there are the costs of lost opportunities. Some are more visible than others. If a sales person you hired quits or gets terminated because you’ve made hiring mistakes, you might lose customers that this rep built relationships with during his or her employ. In addition, some clients will get fed up if they’re constantly being introduced to new sales people who will be handling their accounts. They might refuse to continue doing business with you—moving on to your competitor instead. The high turnover isn’t good for customer service because your clients won’t be able to depend on any one sales person for a long time, build trust, or build relationships in the short time they’re around.

Furthermore, you also lose the opportunity for future sales that the sales person was hired to make. When you make sales hiring mistakes and a salesperson who is not cut out for the job is still working for you but not able to make sales, you’re losing out on tons of potential new sales you could have gotten in that time if you were to have hired the right candidate for the job.


Rhys Metler

Rhys is a tenacious, top performing Senior Sales Recruiter with 15+ years of focused experience in the Digital Media, Mobile, Software, Technology and B2B verticals. He has a successful track record of headhunting top performing sales candidates for some of the most exciting brands in North America. He is a Certified Recruitment Specialist (CRS) and has expert experience in prospecting new business, client retention/renewals and managing top performing sales and recruitment teams. Rhys enjoys spending quality time with his wife, son, and daughters, BBQing on a hot summer day and tropical vacations.