The Secret to Retaining Top Sales Talent: A Commission Strategy That Works

Commission structure is something that costs employers more dearly than they could ever imagine. Having a poor one will cost you the drive and motivation of your sales team which will undoubtably effect the numbers they pull in, not to mention the company revenue figures. And this is all before we even think about how devastating it is to lose top talent, or costly and timely to replace them.

I have spoken to thousands of candidates and clients throughout my career spanning over a decade and there is a glaringly obvious pattern. The companies with the best commission structures attract and retain the best sales talent. They are also ones who are achieving superb organic growth, driven by highly incentivised successful sales teams.

Although money is not the only driver, culture, commute, territory, role, career progression and a plethora of other factors do affect a candidates decision when it comes to leaving. However, in my experience with the best sales talent, money is almost always at the top of the list.

Some companies mistakenly take this as a que to give a candidate a high basic with an unrealistic commission scheme and little chance of them being able to earn much more than their basic. Once the earning potential is clear or lack of it, good candidates in this position will almost always leave. So what is the upshot on commission structures for sales people…?

What the clever employer's needs to know;

High bases are a false economy and often candidates are turning down roles based on the commission scheme, not the basic salary.

At the same time this isn’t the 90’s and commission only roles or low basic salaries are a thing of the past, this approach repel top talent.

Make it your business to know what your competitors commission scheme is, and make your's better! Commission is only paid on business closed, so the ROI is obvious.

This approach will attract the best candidates to your business and keep them there! Trust me it’s better to have top talent working on your team as opposed to your competitors.

Having a bad commission scheme will cost you business revenue and sales talent. Having a good commission scheme will drive revenue and ensure you retain your top sales talent.

What makes a good commission scheme…?

Well for starters, DON’T...

CAP commission – This gives the sales team no incentive to over achieve. This costs your business massively, it makes no logical sense and will be detrimental to growth.

Withhold commission – This is one of the main reasons people leave. People also talk, good sales people know other sales people... this will damage the reputation of your company and will cost you more dearly than you think. Especially when no one from your industry wants to interview with your company because of what employees are saying about you.

Be inconsistent – Constantly changing or letting some members of staff have special treatment to loop holes and not other’s, causes problems.

Be unclear – People need to know what they are getting, top sales people are like accountants they need to be clear on their pay cheques.

Set unrealistic targets - Often some employers get greedy, an employee has a good year of overachievement and earnings. So as a result the following year unrealistic target's are set, the ability to earn decrease's and as a result good candidates leave.

Make it too complicated – Commission schemes that are too complicated make people uneasy and can cause suspicion.

What makes a good commission scheme…?

Do...

Make the commission uncapped – This gives sales people an incentive to go above and beyond their targets, the more money they earn the more money you earn.

Put accellerators in - Companies with accellerators are almost always the companies whose entire sales team are over 100% of target, the benefit of this to your team number and company revenues is obvious.

Have a clear commission scheme – Don’t give your team any reason to check or question their commission you want them out earning it, not spending hours trying to figure it out and questioning it.

Be competitive - If you aren’t competitive with what other people in the industry are offering then you are going to lose people from your sales team. No one wants to work twice as hard for half the reward.

Pay on time – This goes without saying, commission should be treated no differently than a basic wage and paying on time is imperative.

Be consistent – Constantly changing or ‘trimming’ down the commission scheme may save your business a little money in the short term, but it will cost you a lot of money in the long term when your top sales people move on.

Treat all employees the same – Any discrepancies within the team will cause real problems, one rule needs to apply in every sense, for the entire team.

Be fair within departments – Again people working in the same company need to be treated the same, this includes having a clear commission structure across the board where all departments need to put the same amount of effort in to get the same ROI.

Have other incentives - Don’t just have yearly prizes, having quarterly and monthly incentives will incentivise your sales team to compete with each other and work that little bit harder all year round not just at year end.

There are of course other factors that I will have missed here and I could go on, but the above are the most important things that I have taken from speaking to thousands of candidates and clients alike.

To Conclude, a good commission scheme WON'T cost you money. In Fact it will definitely make you money, whilst ensuring you retain your sales talent. It really is a no brainer!

Good luck redefining your commission structure!

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