Build the case. Then make the hire.Business Case for
a New Hire
What could this role add to the business, and what could waiting cost you?
Model a new territory, market or function before you ask for the headcount.
Illustrative starting points, not market benchmarks. Selecting a preset resets all assumptions.
1. People investment
Budget full target variable pay, even when revenue is discounted.
Tools, travel, equipment allocation or other ongoing overhead.
Added to people cost when the hire starts. Exclude this fee from the other one-time costs above to avoid counting it twice.
2. Incremental opportunity
Revenue within this role's coverage at full productivity, before attribution and confidence adjustments.
Only the additional share created by dedicated coverage. Exclude revenue likely to occur anyway and avoid counting the same revenue across roles.
Before ramp, confidence and start timing.
After cost of goods/services; before this hire's people costs to avoid double counting.
A planning discount on incremental revenue, not a statistical probability or guarantee.
3. Ramp & start timing
Rises in a straight line to 100% over the ramp period. With no ramp, productivity starts at 100%.
Total calendar days until the hire starts. The results use a fixed 365-day window beginning today.
Net contribution after people cost
Net contribution ÷ people cost
After attribution, confidence and ramp
Before this hire's people costs
Recurring cost plus one-time costs
Of a full year at 100%; includes delay
The three-year business case
Three consecutive 365-day years from today, using your selected start delay. Revenue, confidence and annual costs stay constant; ramp continues across years.
| Projection | Year 1 | Year 2 | Year 3 |
|---|---|---|---|
| Incremental revenue | |||
| Gross profit | |||
| People cost | |||
| Net contribution | |||
| Annual ROI |
Estimated cumulative three-year net contribution
Total net contribution ÷ total people cost
Same opportunity. A later start.
Potential gross profit deferred beyond the next 12 months, compared with starting today. Select a delay to update the business case.
Deferred gross profit is not automatically lost revenue. Waiting also avoids payroll before the start date; the net effect can favor waiting under these assumptions.
Cumulative net contribution
Estimated contribution after people cost, from today through day 365.
Financial methodology & assumptions
Attribute only the additional revenue
Annual incremental revenue = full-productivity revenue × incremental revenue %. The remainder is excluded as revenue likely to occur anyway or not attributable to this role. For managers, engineers and marketing, attribute only a defensible share of team or influenced revenue, without double counting other hires.
Year 1 incremental revenue = annual incremental revenue × confidence factor × productive capacity. Confidence is a user-selected proportional haircut, not a modeled probability distribution.
One ramp calculation, one time window
Year 1 is the next 365 calendar days from today. Ramp begins on the hire's start date. Productivity rises linearly from your starting % to 100%, then stays at 100%. A month is 365 ÷ 12 days.
Productive capacity is the area under that productivity curve within the active days, divided by 365. The first-12-month productivity shown in the inputs excludes delay; the results include delay. No extra Year 1 discount is applied.
Budget the full people investment
Annual recurring cost = base pay × (1 + burden %) + full target variable pay + other annual role costs. This preserves the original calculator's base-only burden convention. Include any additional taxes or benefit burden on variable pay in other annual costs.
Year 1 people cost = recurring cost × active days ÷ 365 + one-time costs. The optional recruiting fee is 25% of annual base salary and is added to other one-time costs. All one-time costs are booked once when the hire starts, only if the start is inside this window. Full variable pay is budgeted regardless of confidence or ramp. Gross profit = incremental revenue × gross margin; net contribution = gross profit − people cost; ROI = net contribution ÷ people cost. ROI is undefined when people cost is zero.
Years 2 and 3 & cumulative ROI
Each year spans 365 days from today. Annual figures equal cumulative results at that year-end minus the prior year-end. Ramp continues without restarting; full productivity is capped at 100%. Revenue, attribution, confidence, compensation and other annual costs remain unchanged, with no assumed growth or inflation. One-time costs, including any recruiting fee, are charged only in the year the hire starts.
Cumulative three-year net contribution is total gross profit minus total people cost over 1,095 days. Cumulative ROI divides that contribution by total people cost; it is not the sum or average of annual ROI. Annual profitability does not necessarily recover earlier losses. No positive payoff is guaranteed.
Compare waiting fairly
Every delay uses the same 365-day window, revenue assumptions and ramp curve. Gross profit deferred = start-today gross profit − delayed-start gross profit. Net effect of waiting = deferred gross profit − people costs avoided. A negative net effect means waiting improves modeled Year 1 contribution.
No payroll is charged before start. No seasonality, cash-collection timing, discount rate, attrition, tax, terminal value or permanent loss of demand is modeled. Other operating costs are excluded unless entered. One-time spend before a start date and non-revenue benefits need separate analysis. All amounts are USD; presets are illustrations, not salary or performance benchmarks.
The business case comes before the search.
Thinking about adding coverage in a new territory, market or function? Search4Fit can help you think through the role before you begin the search.
Let’s think through the role