[one of our most popular posts from 2012]
How do most staffing companies pay outside sales people? Is it base plus commission, commission only, base only, and is mileage always reimbursed? Those are a few questions posed to us by a Staffing Talk reader, Jody Audet of Castle Rock, Colorado's TPM Staffing Services, and we went on a fact finding mission to get some of those answers.
It wasn't that easy though. It seems lots of staffing company owners and managers, like those in any other industry, aren't all that forthcoming about what they pay their people, for competitive reasons and all that.
We did find a couple however, in different parts of the country, who were willing to share some top level info off the record.
There is a staffing agency in northern California who happens to be currently looking for an outside sales rep. They told us they are expecting to pay a base salary of $40 - $45,000, with a commission structure that could account for an additional amount of up to $2,000/month.
They also reimburse their outside sales reps at the current IRS rate of 55.5 cents for all business miles. They described the position as "road warrior," but then added that the geographic area this rep would cover is not huge, so mileage is not a big factor in the compensation equation. The cost of living in this area is high though, so maybe these comp figures are a little high in relation to other parts of the country.
A Charlotte, North Carolina staffing company run by a professional acquaintance I met when I was working there in NASCAR, pays his outside sales reps a starting salary of $30 - $35,000, with first year potential of $50K plus according to him. He also offers a health plan, dental plan, 401K, paid holidays, paid sick days, and paid expenses, including mileage.
Outside sales reps start at $30 - $35,000, with first year potential of $50K plus, as well as a health plan, dental plan, 401K, paid holidays, paid sick days, and paid expenses, including mileage.
I also had an email exchange with the manager at a staffing company based in Birmingham, Alabama. They start their outside sales reps at $35,000+commission, with an expectation a person would make approximately $60,000 their first year if they met their quotas.
A number of online job postings I found for outside sales reps at staffing companies in such disparate markets as Woodland Hills, California, and Reston, Virginia, offer starting salaries right around $35,000 on average, with first year potential in the area of $50,000. Those positions offer:
- Commission plan
- Health plan
- Dental plan
- 401K plan
- Paid holidays
- Paid sick days
- Paid expenses
- Advancement opportunity
- Other incentives
Dave Ardent, a consultant in Manchester, England, has this to say about the compensation of outside sales reps.
"Ideally, what you want is to pay a commission that comes from profit generated by the Sales Rep's success, where the cash amount is above and beyond all incurred costs associated with employing/training the Sales Rep."
"Ideally, what you want is to pay a commission that comes from profit generated by the Sales Rep's success, where the cash amount is above and beyond all incurred costs associated with employing/training the Sales Rep. This would be a good and tangible definition of success because employing the Sales Rep has entirely paid for itself so far. You should calculate when this point in time should be achieved – in other words how long it should be before a Sales Rep is effectively 'in profit.' The period of time from commencement of employment to the time when such employee-suitability is finally judged would typically be called the trial or probationary period. This process is, of course, something that should be transparent and understood by each new Sales Rep, and agreed to prior to commencement of employment."
We would love to get a conversation started on compensation plans. Is base plus commission the norm? How much and how much? Does everyone reimburse for mileage? Does anyone pay any kind of per diem to cover the cost of operating a vehicle? Do you feel this is "covered" by a bonus or commission?