The Math: What Bad Hiring Really Costs Your Company

Most leadership teams feel that bad hiring is expensive.

Very few have actually done the math.

Let’s make it concrete.

1. The hidden cost of one bad mid–senior hire

Take a mid–senior role with a €100,000 base salary.

A “bad” or “meh” hire in that role typically costs you:

• Salary & benefits (12–18 months):

  €100,000–€150,000

• Time spent by leadership & team

  • Interviews, onboarding, hand-holding, damage control

  • Easily 100–200 hours of manager + leadership time

  • At a blended internal rate of €100/hour: €10,000–€20,000

• Performance impact

  • Lost deals, slower delivery, lower quality, team friction

  • Being conservative: 10–20% underperformance vs a solid hire

  • On a role expected to add/defend €300k+ in value, that’s €30,000–€60,000 gone

• Replacement cost

  • New search, more interviews, onboarding all over again

  • External spend + internal time: €15,000–€30,000
    

Total cost of one bad mid–senior hire (conservative):

👉€155,000–€260,000 (!!!)

That’s 1.5–2.5x salary burned on a single mistake.

2. Now zoom out: your annual hiring pattern

If you’re a 50–500 person company, you’re probably making:

• 10–50 mid–senior hires per year
  

Most leadership teams quietly accept that 30–50% of hires are “meh” or mis-hires.
(and according to SHRM research 46% of hires "fail" within 18 months).

But let’s be conservative:

• 20 hires / year

• 30% are poor or “meh” = 6 hires

• Cost per bad hire: ~€150,000 (low end of the range)

Annual value leakage:

👉 6 × €150,000 = €900,000 per year

That’s without counting the second-order effects:

• Team churn because of a bad manager

• Lost customers due to inconsistent quality

• Strategic projects that never get finished

3. What a hiring operating system changes

You don’t need perfection. You need fewer bad bets.

If you install a structured hiring OS across your leadership team and managers and it does nothing more than:

• Reduce your mis-hire rate from 30% → 15%

• Improve your “solid hire” rate by 1–2 people per year in key roles

…then using the same example:

• 20 hires / year

• 15% mis-hires = 3 bad hires instead of 6

• 3 × €150,000 = €450,000 in avoidable cost, saved

Impact from a basic improvement in quality:

👉 Roughly €450,000 per year back into the business

(again, on conservative assumptions)

Over a 3-year window, that’s €1.3M+ in value from simply hiring less badly.

4. Compare that to the investment

Now compare:

• Investment:

  • 2 days with your leadership team to design and install a hiring operating system

  • Follow-up implementation support & tools

• Order of magnitude of the problem:

  • Hundreds of thousands per year in mis-hire and “meh-hire” cost

On a risk–reward basis, if this work helps you avoid even one bad senior hire in the next 12 months, it’s already paid for itself.

Most companies aren’t losing because they can’t find candidates.

They’re losing because they don’t have a shared, evidence-based way of deciding who to bet on.

If reading this made you quietly do the math in your own head and wince a little… fix it.

I’m running a limited number of Hiring OS Clarity Sessions for founders and HR leaders in 50–500 person companies.

In 45 minutes we will:

• Run the mis-hire math with your numbers

• Map where your current process leaks value

• Sketch what a simple hiring operating system would look like for your leadership team over the next 90 days

If it makes sense, we can talk about working together. If not, you walk away with clarity and a plan.