Guide

Develop an effective sales team

The right pay package for your salespeople

If you're taking on salespeople for the first time it can be difficult to know what pay package you should offer. Sales roles are target-driven and so pay packages tend to be based on results. Packages usually include lots of incentives.

It's important you spend time investigating the right combination of basic pay and incentives. Getting it right can help you to attract, retain and motivate the right candidates and be clear about what is offered from the onset.

Pay structures for sales staff

The typical pay structure for a salesperson is composed of a fairly low basic salary with an additional amount of commission. However, at most levels of seniority, salespeople are amongst the best-paid employees in business, so think about the level you're planning to recruit at and budget accordingly.

The package will usually be called OTE or on-target earnings, meaning that if a salesperson hits the targets specified for them, they will be guaranteed that amount of money. A higher commission can be paid if the person performs beyond this target. Such incentives naturally help to instil a desire for sales.

You can customise pay incentives to your business' benefit. For example, if the company's future is heavily dependent on the success of a new product, you might want to offer a higher level of commission for sales of that product. Linking sales with commission in such a way can therefore assist success.

Non-financial incentiveĀ 

Finally, remember to think about non-financial incentives as these can be more effective. Securing an order provides its own sense of achievement for salespeople, but when orders are not so easy to secure you need to think of incentives to motivate your staff.

See implement staff incentive schemes.