Which One is Better – Salary + Commission or Straight Commission?

Let’s say you have two offers on a sales job. One is paying commissions only and the other offers a base salary and commission. What do you go for? Is it better to get paid with salary plus commission, or straight commissions? Here's a helpful list of the pros and cons of each model that you can use to help you decide.

1. Understand Your Customers and the Sales Process

Why? Because this will give an idea of the working environment your sales rep will be faced with. For instance, does selling your product involve an explanation of a manufacturing or technical procedure? Then a person with such skill set will be a good fit.

When it comes to your customers, first ask yourself – who are they? They could be individuals of a certain age group, large corporations, or small-medium businesses in a specified industry. Where applicable, you can interview a few of them just to find out the kind of a salesperson they expect to interact with.

2. Create A Clear And Detailed Job Description

Having defined your product and client needs, use the information to craft a matching job advert. Don’t be fooled into thinking that selling is just selling – actual responsibilities of salespeople differ from one business to another. Your description should outline:

• The type of business/industry you are involved in
• The job position e.g. team leader or entry-level
• Nature of the job i.e will it involve generation of sales leads, closing deals, or both?
• Daily tasks at the office besides sales  
• Periodic sales quota i.e weekly and monthly targets 

When writing the description, avoid general statements. Compare these possible ads: 

• Required: a high-energy sales rep who can multi-task
• Required: a salesperson proficient in MS Excel and with the ability to generate a minimum of 20 leads a day.

Which adverts shines more light on the job requirements?

3. Decide on the Compensation Range

Any job candidate would want to know what their reward will be. Now, a popular way of compensating sales staffs involves guaranteed base pay and variable commissions proportional to the value of sales generated. But, you still need some figures to paint a clear picture of the pay.

So, how many sales do you think your best sales rep can generate in a week? Use this estimate to calculate their monthly quota. Assuming you already decided on the base pay and commission rate, you can calculate how much the sales rep might take home. Make it clear that the compensation is based on their performance. You can give a broad range of commission rates to increase the rep’s earning potential. See more details about setting up commission rates.

4. Interview for Relevant Skills and Personal Character

Look for skills that match the job description you created. For example, if part of the job entails using automation systems and software, you’ll need an individual with good computer skills. Also, note that multi-skilled employees are valuable assets to new businesses as they can take multiple roles. Don’t overlook their ability to mingle and build relationships fast, as well as their leadership qualities should you want them to take up such roles in the future. 

Conclusion

Now that you know how to hire your first sales superstar, where can you find suitable candidates? You have various options. These include internet platforms like LinkedIn, business schools within your area, and your contacts.