Methodology
The research behind every number.
HireAudit is a deliberately conservative model. Every coefficient is sourced from peer-reviewed or industry-standard research. Below is the full breakdown of cost components and seniority multipliers.
Lost productivity
monthly_salary × months_to_detect × 0.5Underperforming hires deliver roughly half of expected output during the detection window. CAP studies place ramp-down losses at 50–60% of fully-productive baseline before the issue is acknowledged.
Team drag
monthly_salary × teammates × 0.3 × months_to_detectGallup engagement research consistently shows nearby teammates lose 25–40% productivity covering gaps, fielding rework, and absorbing emotional load. We use 30% per affected teammate, scaled by detection time.
Manager time
monthly_salary × 0.17 × months_to_detectSHRM data indicates managers spend 17% of their working time on a single problematic report — escalations, documentation, performance management, and re-planning. That time has a real opportunity cost.
Replacement cost
monthly_salary × months_to_replace × 1.2Backfill carries a 20% premium for sourcing fees, interview burden, onboarding cost, and the productivity gap during search and ramp.
Seniority multipliers
Damage compounds with seniority.
A bad executive hire isn't 4× the cost because they earn 4× more — it's because their decisions influence strategy, culture, and downstream hiring for years.
Junior
1.2×
Limited blast radius
Mid
1.5×
Project-level impact
Senior
2.5×
Cross-team decisions
Executive
4×
Strategic compounding
Sources
- · Center for American Progress (CAP) — Cost of Turnover, 2012
- · Gallup — State of the Global Workplace, 2023
- · SHRM — Human Capital Benchmarking Report
- · Harvard Business Review — "Why Good Managers Make Bad Hires"