Most businesses believe they understand the role salary plays in hiring.
They benchmark against competitors, review salary guides and set budgets based on what they believe the market will accept. Then, when the offer stage arrives, they try to balance attracting the right person with keeping costs under control.
On the surface, offering £5K less than a candidate is seeking may seem like a sensible financial decision.
After all, £5,000 saved is £5,000 saved.
But in finance recruitment, where skilled professionals remain in high demand and businesses are competing for a limited talent pool, a £5K salary misjudgement can quickly become one of the most expensive decisions a hiring manager makes.
The reality is that the cost of getting salary expectations wrong often extends far beyond payroll. Delayed hiring processes, lost productivity, candidate withdrawals and increased recruitment costs can all turn a perceived saving into a significant business expense.
So, what does a £5K salary misjudgement really cost?
The Obvious Cost: Losing the Candidate
The most immediate consequence of an uncompetitive offer is simple. You lose the candidate. Perhaps they’ve progressed through multiple interview stages. They’ve met stakeholders, completed assessments and demonstrated the technical and commercial skills you’re looking for. Then another opportunity comes along offering a slightly stronger package and they accept elsewhere. Unfortunately, this happens more often than many organisations realise.
According to the latest salary and hiring reports from Hays, Robert Half and ACCA, demand for experienced finance professionals continues to outpace supply across many areas of the market, particularly within Financial Planning & Analysis (FP&A), Commercial Finance, Finance Business Partnering and senior leadership positions.
When candidates have multiple options available, even relatively small salary differences can influence their final decision.
And when they walk away, the cost isn’t just the salary gap. It’s the cost of starting again.
In fact, as we explored in our article The Finance Hiring Trends You Need To Know In 2025 Or Risk Falling Behind, businesses that understand current market expectations and move quickly are significantly more likely to secure top finance talent before competitors do.
The Cost of Vacancy Delays
One of the most overlooked costs in recruitment is the cost of time. When a finance role remains vacant, the work doesn’t disappear. Month-end reporting still needs completing. Budgets still need preparing. Forecasts still need updating. Stakeholders still require financial insight to support decision-making. Instead, the workload is redistributed elsewhere.
This often means:
- Finance leaders spending time on operational tasks
- Existing team members taking on additional responsibilities
- Projects being delayed
- Strategic initiatives losing momentum
- Decision-making becoming slower
For critical finance positions, the impact can be substantial.
A delayed Financial Controller hire can affect reporting accuracy. A delayed Finance Business Partner appointment can reduce commercial visibility. A delayed CFO search can postpone major strategic initiatives altogether.
The question businesses should ask themselves is simple:
If a £5,000 salary adjustment could have secured the right candidate six weeks earlier, was it really a saving?
This is exactly why more employers are using We Do Benchmark to understand what finance professionals are actually earning in today’s market before beginning a recruitment process.
Why Finance Professionals Are Different
Finance professionals are uniquely positioned when it comes to understanding their own market value. Many qualified accountants and finance leaders have access to:
- Industry salary benchmarking
- Professional networks
- Specialist recruiters
- Market intelligence reports
- Peer salary comparisons
As a result, most candidates enter a recruitment process with a strong understanding of current market conditions. If a package appears significantly below market expectations, it can create concerns around more than just compensation. Candidates may begin questioning:
- Whether the organisation understands the market
- Future salary progression opportunities
- Investment in employee development
- The overall value placed on the role
Salary is often interpreted as a reflection of how the business views the position and the contribution it expects the individual to make.
Rather than relying on outdated salary guides, employers can use We Do Benchmark to compare salaries, benefits and total reward packages against real-time market data specific to finance and accountancy roles.
The Hidden Impact on Employer Brand
Every hiring process shapes your reputation. Candidates talk to recruiters. They speak with colleagues. They share experiences within professional networks. And in today’s digital world, they often research employers extensively before accepting opportunities.
Research from LinkedIn Talent Solutions consistently shows that employer brand has a direct impact on an organisation’s ability to attract and retain talent.
If a business develops a reputation for consistently offering below-market salaries, attracting future talent becomes increasingly difficult.
This can lead to:
- Lower application volumes
- Reduced candidate engagement
- Longer hiring cycles
- Increased reliance on recruitment agencies
- Higher overall hiring costs
We explored a similar challenge in our article Would YOU Apply For The Job You’ve Advertised?, where we discussed how every aspect of the hiring process contributes to candidate perception.
What Happens When Candidates Accept Anyway?
Sometimes organisations secure a candidate despite offering below-market compensation. Initially, this can feel like a success. The role is filled. Budgets remain intact. The hiring process is complete. However, this is where another risk emerges. Research from Gallup and the CIPD consistently demonstrates that while salary isn’t the only factor influencing employee retention, it remains one of the strongest contributors to job satisfaction and engagement. Candidates who know they accepted below-market compensation are often more likely to remain open to alternative opportunities.
As we discussed in Why Your Best Finance Employees Are Job Hunting And How To Stop Them Leaving, employees who don’t feel valued financially or professionally are often the first to explore alternative opportunities.
The Impact on Team Engagement and Productivity
When businesses fail to secure the right hire, existing employees often carry the burden. Initially, team members are usually willing to step in and help. But over time, additional responsibilities can create pressure, frustration and disengagement. According to Gallup’s State of the Global Workplace research, low employee engagement costs the global economy approximately $8.8 trillion annually, equivalent to around 9% of global GDP. While an unfilled finance role won’t single-handedly create that level of impact, prolonged vacancies can contribute to many of the same issues:
- Increased stress
- Lower morale
- Reduced productivity
- Higher employee turnover
- Burnout amongst top performers
Retention is often significantly cheaper than replacement, yet many organisations only review salaries after a valued employee hands in their notice.
The Risk of Compromising on Quality
Perhaps the most expensive outcome occurs when salary constraints force businesses to lower their expectations. Unable to attract their preferred candidate, they compromise. They hire someone who fits the budget rather than someone who fits the role. Sometimes this works. Sometimes it doesn’t. When it doesn’t, the costs escalate quickly.
The Recruitment & Employment Confederation (REC) estimates that a poor middle-management hire can cost a business more than £132,000 once recruitment costs, management time, training investment and lost productivity are taken into account. Imagine those costs applied to a senior finance position. The financial consequences can be substantial. What initially felt like a £5,000 saving can become a six-figure problem.
For a deeper dive into the wider consequences of hiring mistakes, read The Real Cost Of A Bad Hire In Finance.
Why Salary Expectations Change Faster Than Businesses Think
One of the biggest challenges hiring managers face is that salary expectations evolve rapidly. What felt competitive six months ago may no longer attract the same calibre of candidate today.
Salary levels are influenced by:
- Skills shortages
- Economic conditions
- Regional demand
- Industry competition
- Inflationary pressures
- Flexible working expectations
As we argued in Salary Guides: As Useful As Waterproof Teabags?, static salary guides often struggle to keep pace with real-world market conditions. This is why live benchmarking tools and specialist market insight have become increasingly valuable.
How to Get Salary Decisions Right
The strongest hiring strategies don’t focus solely on minimising salary costs. Instead, they focus on maximising hiring success. That means:
- Benchmarking salaries regularly
- Understanding local market conditions
- Reviewing competitor activity
- Considering the cost of vacancy delays
- Thinking about retention as well as attraction
Businesses that consistently hire well tend to treat salary benchmarking as an ongoing process rather than a once-a-year exercise.
Why Working with a Specialist Finance Recruiter Helps
One of the biggest advantages of partnering with a specialist finance recruiter is access to real-time market insight. Salary guides provide useful benchmarks, but they don’t always reflect what is happening on the ground today. At We Do Group, we combine specialist finance recruitment expertise with real-time market intelligence and We Do Benchmark to help businesses understand exactly what it takes to attract and retain the right finance professionals. Through our free benchmarking service, employers can compare salaries, benefits and total reward packages against current market conditions, helping them make informed hiring decisions before recruitment even begins.
Because when a £5,000 salary misjudgement leads to months of delays, lost productivity, increased recruitment costs and potentially a bad hire, it stops being a salary discussion.
It becomes a business cost.
