Mis-hires can be very costly for your business. Often estimated at 1.5 times the employee's annual salary, and up to 2 times for more specialist or management roles. Beyond the financial costs, a mis-hire also drains time, momentum, motivation, and relationships, both internal and external.
Given the already tough market conditions we're seeing today, many companies simply cannot afford mis-hires.
A mis-hire is an employee who:
Leaves shortly after being hired
Doesn't perform at the expected level
Has the wrong skills for the role
Doesn't fit the team or the culture
A mis-hire isn't just about someone resigning. It can also be an employee who stays, but never creates the value the role was intended to deliver.
To paint a clear picture of the cost involved, let's look at a concrete example.
In the example below (senior developer with 10+ years of experience), we have used the iceberg model to illustrate the total cost picture.
| Description | Senior developer, Norway |
| Recruitment, onboarding | 586 368 |
| Normal operations / ongoing management | 71 809 |
| Annual salary cost senior backend utvikler per year | 1 467 716 |
| Offboarding / exit process | 1 206 868 |
| Average tenure (years) | 3 |
| Working hours per year | 1 650 |
| Average total cost per hour | 1 295 |
*Including external services and internal hours
|
Local senior developer, Norway |
| Expected tenure: 3 år |
| Hours per year: 1 650 |
|
Total 3-year lifecycle cost ÷ Total productive hours ≈ 1295 NOK/hour |
In technology and development departments, the consequences can be more severe than in many other departments:
Some costs are obvious, while others are often underestimated. Here's a breakdown of both:
Direct costs (measurable):
For a senior developer, the recruitment process and onboarding alone can cost NOK 586,368 in internal and external resources.
Indirect costs (often larger than the direct ones):
This is where the real risk lies.
Lost time: Management and colleagues spend time on follow-ups, correction, and quality control, time that should have gone toward innovation and growth.
Delayed projects: The wrong competence can lead to postponed launches, lost customers, and weakened competitiveness.
Technical debt: A developer who makes the wrong architectural decisions or delivers poor-quality code can saddle the company with technical debt that must be cleaned up later, often at a higher cost than the hire itself.
Reduced motivation and cultural impact: Employees quickly notice when someone isn't working out. This can lead to frustration, lower engagement, and a risk of further turnover.
Lost momentum: Companies thrive on progress. When the pace slows, it affects investors, employees, and customers alike.
Starting point:
Senior developer (10+ years of experience) with annual salary NOK 1,467,716 and employment ends after 12 months.
Total estimated cost:
NOK 3,260,952
This does not include costs related to lost productivity, delayed progress, technical debt, or lost market opportunities.
A mis-hire can cost: