Also, firing is terrible for morale. You really can't do it that often.
Failing to hire a good engineer is only a big cost if you can't find a decent alternative hire. If you're paying a 6 figure salary with massive benefits like Facebook or Google, you usually have a long queue of qualified candidates to choose from. Maybe the next guy will turn out to be better than the guy you passed on.
> You will never get a chance to hire them again, and probably all of their friends.
I happen to know that Google gets lots of repeat applicants. They have an explicit "wait a year before reapplying" policy.
I really doubt many people who want to work for these companies decide not to because a friend didn't get the job. That's just sort of crazy.