How much does a bad hire cost?

A bad hire costs between 40% and 200% of the role's annual salary, according to the most widely cited estimate in the literature, collected in the SIOP manuals (2018). For a role paying €35,000 gross, that is between €14,000 and €70,000 per mistake. Gallup (2019) lands in a similar range: replacing an employee costs between 50% and 200% of their annual salary.

The figure surprises people because most of that cost never shows up on an invoice. The salary is visible; your team's time, the vacancy that reopens and the strain on the people who stay are not. Let's break it down.

What the cost is made of

The total cost of a wrong hire splits into five parts:

• Salary and social contributions for the candidate who doesn't fit: you pay the full employer cost for the months it takes to spot the mistake — usually between 3 and 9, depending on the sector.
• Time spent managing the process: screening, interviews and debriefs. According to our internal cost model, an average process for a qualified role consumes around 111 person-hours and roughly €3,075, with 73% of the cost concentrated in interviews and debriefs (a full interview comes to around €205).
• Re-hiring: the process starts again from scratch, so those hours and euros are paid twice.
• Opportunity cost of the vacancy: while the role produces nothing, the margin it should generate is lost month after month.
• Impact on the team and on customers: extra load for those who absorb the work, worn-down morale and the risk of further turnover.

The reference figures (and where they come from)

No two studies give the same exact number, but the published ones converge on the order of magnitude:

• SIOP (2018): the most widely cited range puts the total cost between 40% and 200% of annual salary, depending on seniority and how critical the role is.
• Gallup (2019): replacing an employee costs between 50% and 200% of their annual salary.
• Center for American Progress (Boushey and Glynn, 2012): replacement cost runs from 16% of salary for entry-level roles, with a median around 21%, up to 213% for executive positions.
• REC (2017): in the UK, a bad hire at mid-management level costs more than 3 times their annual salary.
• SHRM (2025): just hiring — before counting any mistake — costs on average around $5,475 per person for non-executive roles.
• Our internal cost model: around 111 person-hours and about €3,075 per selection process in an SME — the cost that repeats if you have to hire again.

An honest reading: these are aggregate ranges across many processes, not a forecast for your case. The real cost depends on the role, the sector and how long it takes you to spot the mistake.

How to reduce the risk

The risk of hiring badly never disappears, but it shrinks when you move assessment to the start of the process. The traditional unstructured interview predicts little: Schmidt and Hunter's research (1998) puts it at around R = 0.20 predictive validity. Combining several structured predictors — cognitive tests, structured interviews, work samples — raises that validity to roughly R = 0.63 according to the Schmidt–Oh–Shaffer meta-analysis (2016); a later review (Sackett et al., 2022) argues those figures downwards, but the practical conclusion holds: structured assessment consistently predicts more accurately than gut feeling.

In practice: define the criteria before opening the process, give every candidate the same tests, and keep the final decision in human hands — with the assessment as support, not as a substitute.