> ## Content Index > Fetch the complete content index at: https://fomo.observer/llms.txt > Use this file to discover other available public pages before exploring further. # The most expensive hiring mistake: Hiring someone average - URL: https://fomo.observer/the-most-expensive-hiring-mistake-hiring-someone-average/ - Published: 2026-10-06T06:00:19.000Z - Updated: 2026-10-06T06:00:18.000Z - Author: Reet Kaurit - Tags: Hiring, Fomo Academy When companies talk about expensive hiring mistakes, they usually mean a bad hire: someone who clearly can't do the job, doesn't fit the team or underperforms badly enough that eventually everyone agrees it isn't working. It's painful and expensive, but there's one advantage: you usually notice. Maybe after two months, maybe after six. You have the difficult conversation, take the loss and start again. I think there's a much more expensive hiring mistake: hiring someone average. This is the person who is never bad enough to fire, but never good enough to really move things forward either. They do maybe 60–70% of what a great person in the role could do. They need more management, decisions take longer and someone else tends to pick up the difficult things. Their manager knows they're not amazing, but replacing them feels like a lot of work. And the employee? They're often perfectly comfortable. So they stay. Not six months, but three years. And *that* is where the maths gets interesting. ## First, let's calculate what one employee actually costs Let's take a fairly typical senior hire in Estonia earning €5,000 gross per month. The obvious calculation is €5,000 × 12 = €60,000. Except that's not what the company pays. With Estonia's employer taxes, that €5,000 salary costs the company approximately €6,690 per month, or €80,280 per year. Now let's add some very reasonable costs around employing that person: €2,000 for equipment and setup, €2,000 a year in benefits and €1,500 for training. There is also the cost of finding the person in the first place, whether that's internal recruitment time, hiring managers interviewing candidates, job advertising, sourcing or external support. But the bigger costs start after the person says yes. ## Your manager's time isn't free either Let's say our employee's manager earns €7,000 gross per month, making their employer cost roughly €9,366 per month. Now imagine that during the first three months, around 15% of the manager's time goes into preparing, onboarding, reviewing work, answering questions and getting the new hire up to speed. That's another roughly €4,200 worth of management capacity. And we haven't counted HR, IT or all the colleagues who answer questions, explain systems and share context. So our “€5,000 employee” is already getting surprisingly close to a €100,000 first-year investment, and that's before we talk about productivity. ## Because you're not actually buying 12 months of output People take holidays. They get sick. They attend training and company days. As they should. In Estonia, employees receive at least 28 calendar days of paid annual leave. Let's also assume ten calendar days of sickness during the year. Those costs shouldn't simply be added on top of annual salary — paid holiday, for example, is already included in payroll cost. But they matter when we think about what the company is actually buying. You aren't buying 365 productive days. You're buying something closer to 220–225 available working days, and even those aren't all fully productive. ## Now comes the really expensive part Imagine we make a great hire. After onboarding, this person operates at 100% of what the role requires — perhaps eventually 120%. That's what we hope to get from a €100,000 investment. Now imagine we make a terrible hire who operates at 30%. Within four months it's obvious. It's painful, we've burned tens of thousands of euros and a lot of time, but we end the employment relationship and start again. Expensive mistake. Now meet the person I worry about much more: the 60% hire. They do their job, mostly. Deadlines are usually met, mostly. Nothing is catastrophic, but their manager needs to check more things. Someone else takes the difficult customer, solves the messy problem or pushes the project over the finish line. The employee isn't failing. They're just not creating the output you hired them to create. And because nothing is *really* broken, nobody does anything. ## Now leave them there for three years This is where “average” becomes incredibly expensive. Our employee costs roughly €80,000 a year in salary and employer taxes alone. Over three years, that's €240,840\. Add benefits, training, equipment and all the other costs around employing someone, and you're comfortably beyond €250,000 invested in one person — before calculating the additional management overhead. Now imagine you're receiving something like 60% of the output the role could reasonably produce. You're paying 100% of the cost and carrying 100% of the risk, but getting 60% of the expected return. That's not a €5,000 salary problem anymore. That's a quarter-million-euro capital allocation problem. ## Think about it like any other investment This is perhaps the strangest thing about hiring. If you told a founder, *“We're going to invest €100,000 this year and we expect to get €60,000 worth of value back,”* nobody would be excited about that investment. When a business invests €100,000, the goal isn't simply to recover €100,000\. The investment needs to create additional value. Exactly how much depends enormously on the role. A salesperson, engineer, CFO and HR manager create value in very different ways, and trying to reduce every employee to a neat ROI percentage would be silly. But the basic economics still matter: a €100,000 investment in a person needs to create considerably more than €100,000 of value over time. If you're paying 100% of the cost but consistently getting something closer to 60% of the output the role requires, you're not saving money by keeping that person. You're extending the loss. ![](https://storage.ghost.io/c/08/7f/087f88ab-cb17-44cc-928d-9cfca14a3fb9/content/images/2026/10/IMG_4757-1.jpg) Reet Kaurit, co-founder of TalentHub ## Average performance has another cost And this one is even harder to calculate: the missing 40% doesn't simply disappear. Someone often picks it up. Usually your best people. Your strongest engineer fixes the problem. Your best salesperson takes the difficult client. The manager gets more involved. The founder steps back into something they thought they'd delegated six months ago. So the cost of an average hire isn't only their lower output. It's also the productivity they quietly consume from your strongest people. That's why a team of ten people operating at 60–70% isn't necessarily just 30–40% less productive than a great team. The management burden, dependencies and compensating work can compound. You can end up paying ten salaries while your strongest four people carry the company. ## And average employees rarely leave quickly A truly bad hire creates friction. Eventually the company or the employee makes a decision. Average is different. The company thinks: *They're actually quite nice. They know our systems. Finding someone new will take months. Maybe with a little more coaching… They're not THAT bad.* Another performance review passes. Then another year. Meanwhile, from the employee's perspective, things may be perfectly fine. They know the job, expectations are manageable and the salary arrives every month. Why leave? Suddenly, the hiring decision you made in 2026 is still sitting on your payroll in 2029. ## We pay a lot of attention to the cost of people. Maybe not enough to their return Salary budgets are discussed. Headcount is discussed. Benefits are discussed. Whether we can afford another person is definitely discussed. But once someone is hired, something interesting happens: the cost becomes normal. €6,690 leaves the company every month and becomes part of the baseline. What we don't necessarily keep asking is whether we're still getting the return we hired this person to create. Not: *Are they busy?* Not: *Are they nice to work with?* Not even: *Are they completing their tasks?* **But: Is this role creating the value we expected when we decided to invest in it?** That question is harder because it forces us to look not only at the employee, but also at ourselves. Maybe we hired the wrong person. Maybe we hired the right person into the wrong role. Maybe expectations were never clear. Maybe the manager isn't giving them what they need. Maybe the company changed and the role didn't. And sometimes, yes, the person is simply average in a role where you need someone exceptional. ## The most expensive hire might be the one who is doing… fine A bad hire hurts. You notice and eventually you fix it. An average hire is much quieter. They can be good enough to stay, comfortable enough not to leave and expensive enough to slowly consume hundreds of thousands of euros without ever triggering an obvious crisis. There is no line in your P&L saying, “Potential we paid for but never received: €97,000.” There is no invoice for the extra 200 hours your manager spent compensating, the project that could have moved faster or the great employee who got tired of carrying everyone else. You just get slightly less output, every week, for years. So maybe the biggest hiring risk isn't *“What if this person is terrible?”* Maybe it's: “What if they're just good enough?” Because when you're making a €100,000+ investment in a person, “fine” can be incredibly expensive. --- [*Reet Kaurit*](https://www.linkedin.com/in/kaurit/?ref=fomo.observer) *is the co-founder of* [*TalentHub*](https://www.talenthub.eu/?ref=fomo.observer) *and one of the first recruiters at Wise. Over the past decade, she has helped hundreds of startups and scaleups hire technical specialists, leaders and executives across Europe. She regularly shares practical insights on recruitment, leadership and the future of work.* ## Sign up for Fomo.Observer Startup stories from Estonia. Free weekly newsletter. Subscribe Email sent! Check your inbox to complete your signup. No spam. Unsubscribe anytime.