The Real Cost of a Bad Engineering Hire (And How to Avoid It)
Everyone talks about the "cost of a bad hire." But when you actually run the numbers for engineering roles, it gets scary fast. Here's what we found after analyzing hiring data from 200+ companies.
"We spent six months trying to make it work. In the end, we had to let him go. The project was three months behind, the team was burned out, and we still had to start the search over from zero."
— VP of Engineering, Series B startup.
I hear some version of this story every week. A company thinks they've found their unicorn engineer. Six months later, they're back at square one—except now they're $200,000 poorer and their team morale is shot.
The traditional stat you'll see thrown around is "a bad hire costs 30% of their first-year salary." That number is laughably low for engineering roles. When we actually tracked the full impact, the real cost was 2-4x the annual salary.
The Hidden Costs Nobody Talks About
Direct Costs: $75K - $150K
- Recruiting fees: 20-25% of salary = $30K-$50K
- Salary during tenure: $40K-$80K (6-12 months)
- Severance package: $10K-$30K
- Benefits, equipment, office space: $5K-$15K
Onboarding & Training: $25K - $60K
Senior engineers typically spend 10-15 hours per week mentoring new hires during the first 3 months. That's 120-180 hours of senior engineer time worth $100-$150/hour. Add in the formal training, documentation review, and codebase walkthroughs, and you're looking at a significant investment that walks out the door.
Productivity Loss: $50K - $200K
This is where it really hurts. A bad hire doesn't just fail to contribute—they actively slow down everyone around them:
- Code review burden: Other engineers spend 2-3x longer reviewing their PRs
- Bug fixing: Technical debt that takes months to unwind
- Project delays: Features slip, launches get pushed, revenue is delayed
- Team context switching: Constant interruptions to help or fix issues
Morale & Attrition Risk: $0 - $300K+
This is the wildcard that can make a bad hire catastrophically expensive. Good engineers have options. When they see leadership make questionable hiring decisions and then ignore the problem for months, they start interviewing elsewhere. Losing even one strong performer because of a bad hire can double or triple your total cost.
The Total Damage
$150K
Best Case
$280K
Typical Case
$500K+
Worst Case
Based on senior engineer salary of $180K. Costs scale proportionally for different levels.
Why Traditional Interviews Fail
The average technical interview process is basically a coin flip dressed up as a rigorous evaluation. Here's why:
- 1.Interviewers are inconsistent. Without standardized scoring, two interviewers can have completely different takeaways from the same candidate. One person's "shows promise" is another's "not ready."
- 2.Charisma beats competence. Confident candidates who interview well often beat technically stronger candidates who are more reserved. This is especially problematic for diverse hiring.
- 3.Fraud is easier than ever. With remote interviews, candidates can use AI assistance, have someone else take the interview, or even use deepfake technology. We've seen all of these in the wild.
- 4.Pressure to fill roles. When a critical position has been open for months, hiring managers lower their bar just to end the pain. This almost always backfires.
A Better Approach
After watching companies make the same mistakes over and over, we've identified what actually works:
Verify identity and integrity from day one
Before you invest hours interviewing someone, make sure they are who they claim to be. This sounds obvious, but proxy interviewing is more common than most companies realize.
Use multi-signal assessment
A single interview or coding test is a snapshot. You need multiple data points: code quality, system design thinking, communication patterns, problem-solving approach, and behavioral signals.
Standardize and calibrate
Every candidate should be evaluated on the same criteria by calibrated interviewers. This reduces bias and makes it easier to compare candidates fairly.
Trust the process, not the gut
"I just have a good feeling about this candidate" has caused more hiring disasters than any other phrase. Data beats intuition every time.
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