Will salespeople get a pay raise in 2015?

By: David Cichelli Sales Compensation

Be among the first to know, by taking part in the 2015 Sales Compensation Trends Survey.

Granting an annual pay adjustment for sales personnel is the norm for most companies…unless economic realities preclude otherwise.

Each year, most companies set aside budget dollars for pay increases for all qualified employees. This includes sales personnel. Annual wage inflation adjustments for all employees have been subdued since the recession of 2007 to 2009.

Will 2015 be similar to 2014? About a year ago, 71.2 percent of the sales departments planned to grant base pay adjustments to sales personnel for the 2014 plan year.

For those planning to grant pay raises, the planned average increase in base was 3 percent.

A five-year record of compensation budgets shows a similar pattern, but notice how the “plan” does not always match practices:

In 2009, as the recession was in full swing, sales personnel saw their pay drop 5 percent. Underestimating improving sales results in 2010, 2011 and 2013 resulted in sales departments paying out higher total compensation than expected from 2 to 3 percent more than budgeted.

We will learn soon from the “2015 Sales Compensation Trends Survey” what happened to base pay, incentive and total compensation for 2014 and what the planned budgets are for 2015.

Here are the topics covered in the “2015 Trends Survey,” now in its 13th year:

  • Sales Department Trends. What was the growth rate for 2014? How many companies hit their goal? What is the growth estimate for 2015? What about turnover, headcount changes and key performance objectives for 2015?
  • 2015 Sales Compensation Practices. What changes are planned for base pay? Is the 2015 sales compensation program changing? What are the challenges for the 2015 incentive program?
  • 2014 Sales Compensation Practices. Let’s take a look backwards and determine what worked and what did not work: program effectiveness, mid-year changes, plan alignment, payouts and costs compared to budget.
  • Paying Your Primary Sales Job. How do you pay your primary sales job: target earnings change, plan changes for 2015, performance measures, MBOs, pay mix, caps, upside, calculation method, thresholds and clawbacks?
  • Quotas. How are quotas managed: forecast accountability, over-assignment practices, allocation method, performance distribution, sales crediting?
  • Costs. What are the costs of the sales function: incentive payments, compensation cost of sales, total cost of sales, and sales force productivity?
  • Recognition Events. What types of recognition events do you sponsor? What is the cost and participation rates of the recognition events?

As a trends survey, we feature many of the same questions each year to capture movement in program budgets, costs and program focus and effectiveness.

Leading sales organizations participate in this survey to learn the movement of key metrics and anticipated growth goals and sales compensation practices planned for 2015. This is the only survey of its kind. Click here to participate in this free, annual survey. Full results will be published in January 2015.

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David Cichelli

David Cichelli contributes his revenue growth knowledge and experience to a wide array of sales organizations. His clients include leading companies in technology, telecommunications, wholesale/distribution, financial services and healthcare. David helps clients redefine and deploy go-to-customer solutions to ensure optimal revenue performance. By applying the Alexander Group’s Revenue Growth Model™, he helps companies achieve their revenue objectives through the coordination of marketing, sales and service resources. These efforts include revenue planning, customer engagement design, sales force configuration, and program design and management. He is the Alexander Group’s sales compensation practice leader.

Widely recognized by national professional associations and trade publications for his work in linking sales compensation to management’s objectives, David is a frequent speaker on sales compensation topics. He is author of Compensating the Sales Force (3rd edition) and The Sales Growth Imperative, published by McGraw Hill. He serves a leadership role in the design of the firm’s revenue growth conceptual models. David is an officer of the company. He is also the author of the 2018 Sales Compensation Almanac, published by AGI Press.

Prior to joining the Alexander Group in 1985, David served for five years as a national practice manager in sales compensation for a leading compensation consulting firm. Previously, he had spent seven years providing support to the field sales organization of a multinational Fortune 200 chemical company. David has a B.A. from Pennsylvania State University and an M.S. from Michigan State University.