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When hiring sales reps, the right compensation plan can make or break a deal in landing a superstar. With a tight job market, sales candidates have many opportunities. And, due to recent inflationary pressures on compensation, base salaries have crept up significantly. To stand out among your competition, you need to create a compensation plan that attracts and rewards performance along with a very sweet carrot to entice them to leave a company they know for a company they don’t know. Customized sales compensation plans that meet the demands of the candidate market are critical in attracting, hiring, and retaining sales talent.
Incorporate these five tips when creating sales compensation plans for top performers.
1) Offer an attractive base salary. Gone are the days when you could hire a sales rep for $50-60K base with upside to $100K. The market is demanding $80-100k+ base salaries for experienced reps. In return, the upside commission plans can be adjusted downward to offset the higher base. Provide a base salary that correlates to the length of your sales cycle. The longer the sales cycle, the larger the base.
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 40 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 racehorse, 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 On Target Earnings (OTE) or total income projections (base + commission) based on various sales levels. Income history of your best sales reps can be used as a guide. Make it easy for your candidates 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.
Small and midsize companies have the advantage of being flexible in designing sales compensation plans that quickly adjust to the demands of the job market. When recruiting sales professionals, 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