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2021 Compensation Strategies For Winning TalentMay 7, 2021
When hiring new sales reps, the right compensation plan may make or break a deal in landing a superstar.
With a tight job market, sales candidates have many opportunities. To stand out among your competition, you may need to create a compensation plan that attracts and rewards performance. Top sales professionals are results driven and their success is measured by money earned from their results. Customized sales compensation plans that meet the demands of the candidate market is critical in attracting, hiring, and retaining sales talent.
Incorporate these five tips when creating sales compensation plans for top performers.
1) Don’t overpay a base salary, but don’t let sales reps die on the vine. You want sales reps who are hungry for success, yet you don’t want them starving at home during the initial ramp-up. If they are worried about paying their bills, they won’t stick around for long. Provide a safety net with a base salary or draw that correlates to the length of your sales cycle. The longer the sales cycle, the larger the safety net.
2) Tie incentives to the activities or results you desire. Almost 70% of sales and finance managers think their compensation plans fail to drive desired behaviors, according to a study by Synygy. In addition to commissions for closed sales, consider activity incentives. For instance, if you know that 50 cold calls per day generates five conversations that results in one sale, then provide your reps with a cash incentive to make the 50 daily cold calls.
3) There is no perfect plan. Be flexible based on the experience and track record of the candidate. If necessary, customize a sales plan for top producers. Your top sales rep may need higher upside potential to feed their hunger for success. Like a race horse, let them run and run fast. Don’t let processes and structured comp plans get in the way of star performance.
4) Provide income projections. Show them the money! Prepare a data sheet detailing total income projections (base + commission) based on various sales levels. Make it easy for them to see the potential!
5) Be realistic about income potential. Honest numbers work. The “sky is the limit” or “earn a six-figure income” is over played. Receive better quality candidates by painting a realistic picture of first and second year income achieved by your above average players.
Unlike large corporations, smaller companies have the advantage of being flexible in designing sales compensation plans that quickly adjust to the demands of the job market. In the sales profession, compensation is a driving factor in attracting and retaining top performers. Creating a sales compensation plan that is competitive will greatly improve your sales hiring success.
If you would like to learn more about how to leverage compensation in your next hiring initiative, give us a call at 317-578-1310. Or email us at email@example.com