Comment by lmilcin

Good engineer you didn't hire is not much of a cost to the company (other than resources wasted on hiring process and perhaps some bad publicity).

On the other hand bad engineer will stay at the company, lower standards, damage morale and set bad precedent to other engineers.

Being engineer myself, I feel much more motivated working in an environment where you can just assume, even before meeting, that the other person is intelligent and motivated. You trust hiring process to filter everybody else so you don't have to subconsciously distrust every person you meet.

This comes at the cost of situations like that.