The Risk Premium: Why Good Finance Candidates Cost More to Move Right Now

There’s one sentence I’ve heard from good finance candidates more than any other this month, in one form or another:

“I’d genuinely like that role. But I’m not resigning from somewhere safe, for 10% more, into a business I don’t know with the market the way it is right now.”

It isn’t a negotiating tactic, and it isn’t really about money. It’s a calculation, and right now it’s a perfectly rational one.

The cash rate is 4.60% after the RBA’s fourth rise this year. The Board’s own minutes leave the door open to more. September quarter inflation lands on 28 October and the RBA meets again on 3 November. Anyone with a mortgage has done the sums at the kitchen table at least once this year, and that changes how good people think about moving.

It also changes what it takes to hire them. Most businesses haven’t adjusted for that yet.

On paper, it looks like a buyer’s market

A lot of employers are reading the headline numbers and drawing a reasonable sounding conclusion. Unemployment ticked up to 4.7% in last week’s figures. Employment went backwards by 39,000 in September. Ads are pulling more applications than they have in years. Surely this is the moment to hire well, and to hire at the sensible end of the band.

Some of that is true. Advertise a role right now and you will get volume.

The problem is who’s in it. A softer market mostly affects people who are already out of work or sitting in shaky roles. The people you actually want for a senior finance seat (employed, valued, performing, a year or two from a promotion where they are) are affected in the opposite way. They’re getting more careful, not more available.

More applications, fewer movers. Both are true at the same time, and the second one is what decides your senior hires.

What a good candidate is actually pricing

When a settled Financial Controller or Head of FP&A weighs up a move at the moment, salary is one line on a much longer list. Most won’t say this out loud in an interview, but here’s what’s sitting on the other side of the scales:

• Probation. Six months without unfair dismissal protection, or twelve if your business has fewer than 15 employees. In a rate cycle, that feels a lot longer than it did two years ago.
• Last in, first out. If cost pressure turns into a restructure, the newest name on the org chart is the easiest one to draw a line through. Everyone knows it.
• What they’ve built up. Goodwill with the CEO, long service leave edging towards ten years, a bonus they’d forfeit, the credibility to get a decision through without a fight. None of it transfers.
• The mortgage. Some lenders get nervous about someone on probation. If a refinance or an upgrade is on the cards, changing jobs complicates it at exactly the wrong moment.
• Your business. They’ve read the same headlines you have. They want to know whether you’re growing, holding, or quietly cutting, and they’ll assume the worst if nobody tells them.

Add that list up and you get what I’d call the risk premium: the gap between what it takes to get a good candidate interested and what it takes to get them to actually resign.

In a confident market that gap is small. Right now it’s as wide as I’ve seen it in a while.

The cheap hire is a myth for the roles that matter

Here’s the trap. A business sees volume, assumes leverage, and pitches the offer at the bottom of the band.

Sometimes it gets accepted. But think about who says yes fastest to a below market offer in an uncertain market. It’s the people who need to move. Occasionally that’s someone excellent whose business has just restructured around them. More often it isn’t.

For a senior finance seat, you end up selecting for urgency rather than capability. The strong candidates you actually wanted are the ones who quietly withdraw after the second round, or stay put when their boss asks them to.

You haven’t saved money. You’ve just changed which candidates are left in the process.

Certainty is cheaper than salary

The good news is that most of the risk premium isn’t paid in cash. It’s paid in certainty, and certainty is something an employer can usually provide for very little.

Here’s what actually moves a cautious candidate at the moment.

Tell them why the role exists. A replacement for someone who was promoted reads very differently from a new role created in this year’s growth budget, and candidates know which ones get cut first. Say it upfront, before they have to ask.

Show them the business. Not a glossy deck. A plain answer on how you’re trading, how you’re funded and what the next twelve months look like. For CFO and Financial Controller roles, an early conversation with the CEO or chair about the numbers does more than another five per cent on base. Good candidates are vetting employers like investors at the moment, and the ones who get straight answers move faster.

Cover what they’d leave behind. If someone is walking away from a bonus they’ve mostly earned, a sign-on payment is usually cheaper than loading it into base, and it removes one of the most common reasons good people say “not yet”.

Talk about probation like adults. Be specific about what success looks like in the first six months and how it will be judged. It’s the vagueness that makes probation feel risky, not the six months.

Be flexible on the start date. Someone who can finish their own half-year close properly leaves with their reputation intact. The people you want care about that, and a business that respects it earns a lot of credit early.

None of these cost much. All of them take away a reason to say no.

A slow process reads like a wobbly business

This isn’t a new point, but the stakes on it have gone up.

In a confident market, a three week gap between interviews is annoying. In this one, candidates read it as a signal. “Approvals are taking a bit longer” sounds an awful lot like “this role might not survive the next budget review”, even when that isn’t what’s happening.

So the speed and consistency of your process is part of your answer to the risk question. A business that books the panel, keeps its dates and makes a decision looks like a business that knows where it’s going. That’s precisely what a cautious candidate is trying to work out.

If you’re the candidate

Caution is sensible. Paralysis isn’t.

Staying put carries risk too. If your business is under the same cost pressure as everyone else, the safe seat might not be as safe as it feels, and a restructure doesn’t give anyone points for loyalty. The question isn’t whether a move is risky. It’s whether this particular move is less risky than where you are now, once you’ve asked the right questions.

So ask them. Why does the role exist? How is the business trading? What happened to the last person in the seat? Who signs off the offer, and how quickly? A good employer will answer every one of those without flinching. One that won’t has told you something useful.

Where I land

This isn’t an argument to stop hiring until rates settle. Businesses that hire well through a cautious market usually come out the other side with a stronger finance function, because they had the pick of the people who were prepared to move.

But it’s the wrong time to assume the market has swung your way. For the senior finance roles that matter, it hasn’t. The best candidates are still employed, still valued, and considerably more careful than they were at the start of the year.

So budget for the risk premium. Pay most of it in certainty, some of it in cash, and none of it in delay.

And keep an eye on 3 November. Another rise won’t make anyone less careful.