I have been chatting to a few colleagues about the ‘real cost’ of on boarding a new sales person and the risks involved and the general response has been ‘no idea’. ?????

Furthermore it would appear that the cost of on boarding new staff in general and not necessarily just sales people is a big headache.

For this article, I am focused on the cost of on boarding a new sales person and I have tried to get my head around the many associated costs and the risk for business.

The risk is obvious really, and no matter how diligent you are, and no matter how thorough you are with your interview and selection process the risk remains.

In Sales, only one thing matters – results. So you employ a new sales person on a 3 month trial, use up valuable resources within that period, and after 30 days no sales results. More often than not, you may say “it’s early days – let’s review results in another 30 days”. And that’s fair enough as it maybe that your product or service has a long sales cycle. Do you review your CRM to measure activity levels, have you identified any challenges that your new person is facing and addressed them? Is coaching required in key areas like qualifying prospects, consultative selling techniques, closing skills, using your CRM software?

So to break down the cost of on boarding a new sales person, I have made a lot of assumptions, and of course there is no ‘one size fits all’ scenario.   

Basic assumptions regarding cost of on boarding a new sales person for a typical SMB (can vary wildly)

  • Retainer $70,000 pa or $5,833 pm

  • Car allowance $1500 pm or $18,000 pa

  • Communications Tools of trade (ipad / mobile phone) $200 pm or $2,400 pa

  • Super @ 9.5% $6,650 pa or $554 pm

  • Target $20,000 pm gross in sales

  • Excludes recruitment costs either internal or external

  • Commission on sales excluded – irrelevant for the purpose of this article

  • The graphs at the top represent the above assumptions, and this representation is very general with a massive number of variables. It is just to get you thinking!


If this topic has grabbed your attention, then maybe I have in a very simplistic way at least brought it to your attention. The cost of on boarding a new sales person is rarely measured. If your selection process is in tune with your business requirements and you do everything ‘right’ with the on boarding process from initiation to product training and all the ‘welcome’ activities then you should be happy with the results as per the best case scenario.

So often things go pair shaped and you may have, or perhaps are currently trying to manage your way through, the worst case scenario and wondering if the $25K investment for 3 months was a wise investment.

This exercise has opened my eyes – has it opened yours?

Happy selling and revenue growth!