The True Cost of Hiring a Wrong Growth Marketer
Hiring great people on your team is the best investment you can make as a startup founder. With a growth marketer in particular, it’s critical you make the right choices because they can make or break the success of your company.
Yet, many companies continue to make bad hires that turn out extremely costly down the road. A study by Leadership IQ found that 81% of new hires either fail within 18 months or turn out to be only fair to marginal performers.
Whether due to inexperience, rushed process, or lack of focus, making a bad growth marketing hire is a mistake you cannot afford to make.
In highlighting the costs of picking the wrong person, we want to underscore the importance of hiring the right growth marketer the first time.
Understanding the cost of a bad growth marketing hire
Just how costly is it to make a bad hire? A recent Career Builder survey puts the average figure at $17,000. Other sources cite the cost of a bad hire at 30-50 percent of the employee’s first-year earnings.
When it comes to estimating the negative impact of hiring a wrong growth marketer or growth hacker, these statistics don’t paint the whole picture, though. A bad growth hire is one of the largest expenses you can incur, and it’s easy to see why.
When you are recruiting a growth marketer using in-house resources, your direct costs are generally insignificant. The largest cost is the value of your time spent in the hiring process that typically extends over 30+ days, according to the most recent report from DHI Hiring. Over this period, you will be:
- Defining the role and crafting a job ad
- Posting on job boards, asking for referrals, or using direct outreach
- Pre-screening applicants and communicating with them
- Interviewing candidates
- Trying out potential hires
- Closing and onboarding the new hire
These activities require significant time commitment from busy founders and their team members, most often in excess of 50 hours for a hire. Multiply that number by the value you assign to your time not spent on moving your business forward and you arrive at a rough estimate of the hiring cost for your growth marketing hire.
You may spend less of your own time if you leverage internal or external resources, in which case you need to add to your estimate an in-house recruiter’s salary or third party recruiter fees.
When you hire a growth marketer or a growth hacker, you typically can’t evaluate their performance until at least 3-6 months into the job. And by the time you realize you hired a dud, you have incurred a sunk cost.
How much is that? If you take someone with a base salary of $80,000 per year and add another $10,000 per year in the cost of healthcare and other benefits, you are paying to the tune of $7,500 per month.
But that’s not all. Don’t forget the ad spend and the cost of marketing tools that can together amount to several thousand dollars a month, so your all-in growth marketing cost is well over $10,000 monthly.
When you hire a growth marketer who fails to deliver results, you get hit with a double whammy. Not only did you pay for the poor performance, but you have also missed the opportunity to grow your business and impact the bottom line. Depending on the scale of your business and the rate of growth, this could mean tens of thousands of dollars in lost revenue over the course of several months.
With competitors likely nipping at your heels, wasted time also means losing your market position. And since the cost of missed growth opportunities compounds over time, you end up shifting to a lower growth trajectory, which eventually feeds into your valuation.
The cost of hiring the wrong person is not just about dollars and cents. It has an impact on culture, morale, and productivity. And when you are a small team, the effect of each hiring mistake is magnified.
When you part ways with a growth marketer, you also lose insider knowledge of the product, market, and customers that they built up over their tenure.
How to increase the ROI of your hiring decisions
We’ve seen that choosing the wrong growth marketer or growth hacker can easily cost your company over $100,000 in direct costs and missed growth opportunities. This figure makes it even more compelling to focus on the ROI of making the right hire.
So how do you make your search more effective and reduce the likelihood of making the wrong decision? Here are a few things to consider.
Invest in a high-quality recruiting process
There is no way you can build a great business if you don’t develop capability early on to hire the right people. It starts with dedicating time and resources to create a structured and thoughtful hiring process that yields top-notch growth marketers and other critical talent.
A poorly managed process, on the other hand, is never effective. Miscommunication, unprepared interviews, and lack of follow up and attention are just a few culprits that drive away great potential hires and inflict damage to your employer brand.
Hire a strong in-house recruiter
According to Dan Portillo, Talent Partner at Greylock Capital, a recruiter is one of the most leveraged hires a founder can make:
Hiring a strong recruiter early on is important because it helps you build the DNA early. Having one person that’s dedicated to working on the story that people resonate with and running a process that’s highly efficient and not lumpy…is core to the business.
A dedicated talent manager can help manage the process from start to finish, letting you focus on the most critical parts: defining the role and the candidate persona on the front end and interviewing and selling the best candidates on the back end.
Leverage an external talent sourcing expert
Whether you have an internal HR resource or not, you should strongly consider enlisting external support when looking for that crucial growth marketing hire. Here are the advantages that it offers:
- Higher quality candidates. A reputable talent search provider with a developed network bring to the table growth talent you’d likely miss.
- Faster time to hire. A hiring expert with established relationships can deliver top-quality candidates faster than alternative approaches.
- Results-based pay. When you work with a recruiter, you bear all or the majority of your financial cost only if a placement is made.
- Replacement guarantee. In case a new hire doesn’t work out, recruiting firms typically offer a 3-6 month guarantee, a protection that an internal recruiter cannot provide.
Every startup is budget constrained, but when you think about it in financial terms, a typical recruiter fee of $10,000-15,000 for an $80,000 position is dwarfed by the costs associated with the wrong hire. So, if using an outsourced expert helps you better canvas the market and find the right growth talent, such investment is certainly justified.
The cost of a bad mission-critical hire is more of a business metric than a recruitment metric. The analysis makes clear that the overall impact of hiring a wrong growth marketer is significantly greater than the cost of hiring the right person in the first place.
As a company, therefore, you either need to invest upfront into sourcing high-quality candidates and establishing a well-orchestrated process or risk growth and long-term success of your business.
Looking for a proven growth marketer today?
Find marketers with experience of driving growth for companies like yours on Growth Engineers.