Ballast
Ballast/Enterprise desk/No. 08

Model · Enterprise desk · 2 minutes

The Cost of a Key Hire

The salary line is the opening bid. By the time the burden, the recruiter, the equipment and the quiet months of ramping are counted, year one costs half again the sticker — and the budget that didn't know it is how good hires become resented ones. This instrument writes the honest invoice before you sign it.

Currency-agnostic · symbol only Rules version 1.0 Reviewed July 2026

The manifest — your numbers

Σ

The number on the offer letter, gross.

% of base

Payroll taxes, benefits, pension. 18–30% is the usual range; some jurisdictions run higher.

Contingent search bills ~20–25% of base on placement; retained executive search 30–35%.

Σ

Hardware, licences, relocation help, the works.

months

Senior roles run 3–9. During ramp the model bills half the loaded cost as drag.

Σ/ yr

Tools, software, space — per year, per person.

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The reading

Heavier than it looks.

$315,850

year-one total for a $180,000 base

The year-one invoice

Base salary
Employer burden
Recruiter fee
Onboarding, one-off
Ramp-up drag — paid, not yet producing
Seat overhead
Year one, all in

Three speeds of ramping

If full speed takesYear-one total× base salary

What moves this result

What would sink this reading

The trainer's hours are missing. Every ramp month consumes senior time — if a principal spends five hours a week onboarding, price it at their rate and add it to the drag.

A wrong hire roughly doubles the invoice: you pay the year-one total, then severance, then the search again — while the seat produces nothing twice. The premium for taking hiring slowly is usually cheaper than this page.

Equity is outside the model. If the offer carries options or shares, their expected annual value belongs on top of the loaded cost, haircut applied.

Questions people bring to this desk

What does an employee really cost beyond salary?
Salary plus employer burden of roughly 18–30% (taxes, benefits, pension), plus seat overhead, plus one-off recruiting and onboarding, plus the ramp months when the seat is paid in full and produces half. For a $180K base with a contingent recruiter, year one lands around $316K — about 1.75× the sticker.
What is a fully loaded cost?
Base salary times one-plus-burden, plus the recurring overhead of the seat — what an employee costs the company per year at cruise, as opposed to what the employee is paid. It is the figure a hire's output has to clear monthly to be worth the desk.
How long until a new hire is fully productive?
Individual contributors typically take 3–5 months; senior and executive roles 6–9. The model bills that period at half the loaded cost as drag — which is why a slow ramp on an expensive hire moves the year-one total more than the recruiter fee does.
Methodology — the formula, printed

Everything below is calculated from your inputs. Nothing is fetched, nothing is looked up.

loaded_annual = base × (1 + burden) + seat ramp_drag = ramp_months × (loaded_annual / 12) × 0.5 year_one = loaded_annual + recruiter + one_off + ramp_drag premium = (year_one − base) / base

The gauge reads the hidden premium — everything year one costs beyond the base — with the line at the house 50%: the level a well-run budget should expect. Past 75% the instrument calls the load heavier than it looks; past 100%, year one costs two stickers.

The 0.5 ramp factor is a convention: during ramp the seat is paid in full and produces about half. Break-even at cruise is loaded_annual / 12 per month — the value the hire must clear once ramped, printed in the reading.

Limitations. Burden varies by country and benefits policy — use payroll's figure where you have it. Manager time spent training, backfill, and equity compensation sit outside the model and all push the true figure up, not down.