Most founders do a quick mental calculation when a hire goes wrong. Salary for the months they were there. Maybe the recruiter fee. That’s usually where the thinking stops.
It’s also why most founders dramatically underestimate how much a bad hire actually costs — and why they keep making the same mistake.
Let’s do the proper accounting.
The Full Cost Breakdown
When a hire doesn’t work out, you’re not paying for one line item. You’re paying for all of these.
Recruiter fees. If you used an agency, that’s typically 15–25% of annual salary. For a S$70,000 role, that’s S$10,500 to S$17,500 — gone whether the hire works out or not.
Onboarding time. Getting someone productive takes hours of management attention, team introductions, tool access, briefings, and patience. Across the manager and teammates involved, this rarely adds up to less than two or three weeks of collective productivity.
The underperformance window. This is the one founders almost always undercount. Most managers take two to three months to accept that a hire isn’t working. During that window, you’re paying full salary, consuming management attention on difficult conversations, and watching work either pile up or get done at a lower standard. The rest of the team quietly picks up the slack — which carries its own cost in morale and goodwill.
The exit. Whether it’s a managed departure or a redundancy, there’s notice period costs, potential severance, and — in Singapore — the real risk of an unfair dismissal claim if the process wasn’t handled correctly.
Doing it all again. Now you restart the whole cycle: writing the job ad, screening, interviewing, absorbing the productivity gap while the role is vacant, and potentially paying the recruiter fee again.
Research from the Society for Human Resource Management puts the average cost of replacing a salaried employee at six to nine months of their salary. For a S$70,000 role in Singapore, that’s S$35,000 to S$52,500. And that figure doesn’t include the opportunity cost of what your team could have been doing instead of managing around a bad hire for three months.
Why It Keeps Happening
The most common cause isn’t bad luck or a difficult market. It’s a lack of clarity — specifically, clarity about what success in the role actually looks like before you start hiring.
Most hiring decisions follow the same pattern: there’s a problem (usually someone is overloaded), a rough idea of the type of person needed, a job ad written in a hurry, and a series of interviews that mostly test how well someone presents under pressure. The panel then picks the person who felt right.
That’s not a process. It’s a gut call dressed up as one.
The person who felt right in the room is often quite different from the person who will actually succeed in the role. Without a clear picture of what success looks like at 30, 60, and 90 days, there’s no way to hire for it, onboard for it, or spot a problem early enough to do something about it.
Two Fixes That Actually Work
Neither of these is complicated. Both take less than an hour to do before you write the first job ad.
1. Define success before you define the role
Before you write anything — before you even settle on a job title — write down what you want this person to have achieved at 30, 60, and 90 days. Be specific. Not “building relationships with the team” but “taken ownership of the X process, identified two inefficiencies, and proposed solutions.” Not “getting up to speed” but “completed Y independently and closed their first Z.”
If you can’t describe success in concrete terms, you’re not ready to hire. You’ll write a vague job ad, attract vague candidates, and make a gut decision with no objective basis for evaluation. The 30/60/90 day exercise forces clarity — and that clarity runs through everything that follows: how you interview, how you onboard, and how you manage the person once they’re in seat.
2. Test for the actual work
Competency-based interviews — five rounds of behavioural questions — are weak predictors of on-the-job performance. They test someone’s ability to tell a good story about the past, not their ability to do the work in front of them.
A short, relevant work sample task changes this completely. If you’re hiring a marketer, ask them to review your current homepage and tell you what they’d change and why. If you’re hiring an ops person, give them a real (anonymised) operational problem and ask how they’d approach it. You’ll learn more in twenty minutes than in five hours of interviews — and you’ll have something concrete to compare across candidates.
The task doesn’t need to be long or elaborate. It needs to be relevant, and it needs to be evaluated against clear criteria, not gut feel.
The Bottom Line
A bad hire is expensive. A preventable bad hire is worse. Most of the time, the cost comes down to skipping the hard thinking at the start — when pressure to hire is high and it feels like there’s no time to slow down.
These two steps won’t eliminate all hiring risk. But they’ll make your decisions more deliberate, your process more defensible, and your hires significantly more likely to stick.
If you’re growing your team in Singapore and want to build a hiring process that gets it right the first time, get in touch with Expert People Solutions.
