The Sunk-Cost Trap That Keeps a Bad Hire Around Too Long
General HR-turnover research, per Wikipedia’s summary of the literature, puts total replacement cost, recruiting, training, and lost productivity during ramp, at 90% to 200% of a role’s annual salary. For a Business Development Representative, whose total compensation PayScale’s crowdsourced data places at $43,000 to $89,000 a year, a general BD-role benchmark rather than an agency-specific figure, that means real money is already spent well before an agency even considers whether the hire is working out.
That already-spent cost is precisely what makes the decision feel harder than it should. The instinct is to keep giving the role more time to justify what has already been invested in it, even once the actual evidence says otherwise.
What to Check Before Making the Call
Before treating underperformance as a hire problem, it is worth checking whether the role itself was set up to succeed. Did the hire get a real, prioritized target list, or were they left to build one from nothing in their first weeks? Was there a paired handoff of existing pipeline context, or a cold start learning the agency’s positioning secondhand? Was the compensation structure competitive at PayScale’s $43,000 to $89,000 range, or thin enough that motivation itself was working against the hire from day one?
A hire who never received any of the above is not necessarily the wrong hire. They may be the right hire in a role that was never properly built around them.
The Real Cost of Getting a Replacement Wrong Too
If the checks above come back clean, the role was genuinely set up well and the performance still is not there, the replacement cost math still applies to whoever comes next. General HR-turnover research puts direct replacement cost at 50% to 60% of annual salary, with total cost reaching 90% to 200%, a cost that applies again in full if the next hire is not properly onboarded either.
That is the argument for fixing the structural gaps found in the check above regardless of what happens with the current hire, since an unfixed gap will produce the same underperformance in whoever fills the role next.
Why Waiting Rarely Makes the Decision Easier
This is reasoning, not a cited statistic. Extending a hire’s runway past the point the evidence is already clear usually does not produce new information, it produces more of the same result while the sunk cost quietly grows larger. The agency is not learning anything new by waiting another quarter; it is paying another quarter’s worth of the compensation range described above for the same outcome already observed.
That does not mean rushing the decision. It means recognizing that more time, on its own, is not the variable that changes the outcome once the actual role setup has already been checked and ruled out as the cause.
What a Clean Exit Looks Like
Practitioner guidance: a clean exit means the decision is made once the structural checks above have genuinely been run, not skipped in frustration. It means being honest with the departing hire about what specifically did not work, since that is more useful to them than a vague explanation, and it means applying whatever gap the check surfaced, thin comp, no target list, no pipeline handoff, to the next hire before they start, not after they have already hit the same wall.
Sources
The external data in this article draws on the sources below. Figures described in the text as estimates or industry triangulations are directional and are not attributed to a single dataset.