Over the past 12 to 18 months, changes in sales compensation can be attributed to a combination of factors including the pandemic, rising inflation, continued supply chain issues, and a tight job market due to the “Great Resignation.” These all have created the perfect storm of employers, both small and large, having a greater appreciation for sales and opening markedly more sales positions.
In the past, companies would try to apply a lower compensation model for new or replacement roles by offering base salary plus variable commission. Today, if a company is targeting great sales talent, a competitive compensation package is a necessity. The offer must align with the role and market segment.
Beyond matching sales compensation with similar roles in a given industry or market, pay must account for candidate experience, knowledge, tenure, track record, and overall skills in sales. Employers get what they pay for, after all. In fact, sales recruits are looking to take a step up, and they don’t shy away from sharing their compensation needs. A lateral move isn’t all that appealing.
In our experience, we find that compensation discussions between a potential employer and a highly qualified sales candidate can be a healthy two-way conversation. It’s a great opportunity for employers to listen and learn about what hiring in sales actually takes. If companies want to attract top sales talent, compensation will often be a deciding factor.
The New Landscape to Find the Best Sales Candidates
The days of using Indeed or LinkedIn Recruiter are fading fast. Employers end up with hundreds (if not thousands) of sales candidates merely looking for a job. Some of them apply due to poor performance or lack the needed skills in sales to be a success, while others have no track record to speak of.
“Boiling the ocean,” so to speak, does not make for a successful recruiting strategy. More must go into hiring for sales positions than that. And that more in-depth process, along with offering a competitive compensation package, will put your company in a much better position to gain a desired candidate.
The new landscape for finding the best sales talent is increasingly dependent on in-depth hiring profiles built by employers and their recruiting teams. This collaborative work can help develop a compelling employee value proposition so that potential hires know exactly what it’s like to work for your organization.
According to the Society of Human Resource Management, employers are expected to “pull out all the stops” to encourage talent to apply. Many are currently experiencing quite a scarcity of applicants, and talent interest could result in not only competitive compensation packages but career development opportunities, flexible working conditions, and more.
You should evaluate whether you and your company are prepared to meet these demands in order to see future success.
Best Practices for Securing Talent in a Competitive Market
Though the talent shortage may be causing you to salivate at the mere prospect of a new hire, it’s still important to keep up with the industry’s pay standards and talent demands. Being aware of this valuable knowledge will help you prepare for interviews and salary negotiations. Here’s a quick breakdown of what you should be doing:
1. Be up-to-date and transparent about compensation
If your company’s pay scale for sales team members is set for a different time and different employee demands, the first thing you should do is invest in getting current information on compensation and what’s reasonable for the role. A number of free tools and salary websites — like Glassdoor, Salary.com, and Payscale.com — are available to gather information on sales compensation by role and job market.
Consider practicing pay transparency and making information on the role and pay range readily available to job applicants. When potential talent understands your current financials and what’s possible, it can help set their expectations moving forward.
2. Get to know talent as a good fit or not
How potential hires position themselves during the interview process can influence their compensation packages. Ask them to share their previous sales results with details on the sales processes they used to grow sales. Ask them to provide examples that best showcase their skill at closing sales. Does their sales method align with your company? Can they bring new ideas and sales methods that will benefit the team? Are they open to learning your sales method? Is anything they’ve said off-putting or a characteristic that doesn’t support your company mission and values?
Your answers may impact how they can grow in your company or whether they make it through the interview process at all.
3. Make compensation alignment a discussion in the final interview
“What are your salary expectations?” is a question often posed during the interview process because it’s a good way to ensure that the offered range aligns with the candidate’s expectations. If you don’t ask, then a candidate is likely to inquire.
Proactively make it a conversation by sharing with them how your compensation plan works. Is it salary versus commission? Is it a combination of the two? What is the pay range? More importantly, what’s the range sales reps have achieved at the company? Creating an open dialogue will help the company and candidate find alignment.
4. Draft an offer letter that reflects competitive compensation
Offer letters should be clear on all points involving the sales compensation plan, and that includes the timing for when commissions or bonuses start and are paid out. Being vague or withholding information altogether can push a potential hire out the door — and possibly into a new role with another, more forward-thinking company. If a candidate does make any inquiries, be open and prepared to answer them truthfully.
Preparation has long been essential to a job interview and salary negotiations. That much hasn’t changed, and it never will. The interview is a great way to know what candidates value, how they conduct business, and whether they’re a good culture fit. However, interviews are also a way for candidates to know whether you’re willing to compensate according to their needs and demands.
The perfect storm of employer versus employee compensation demand allows them to position themselves as the much-needed and sought-after talent. However, it also has placed an emphasis on talent workplace and compensation needs that you as an employer can’t — and shouldn’t — ignore.
An open dialogue between parties throughout the interview process that doesn’t shy away from competitive salary talks and alignment can make for a rewarding working relationship that proves itself for years to come. Don’t waste the opportunity; start preparing today.