WHY DOES IT COST MORE TO HIRE SALESPEOPLE IN 2021?
There’s no doubt or confusion in how the sales team contributes to your business. They’re your resident money-making machines.
Sure, the admin, HR and marketing teams all have their shoulders to the wheel and are crucial to the operation of your company in their own ways, but it’s the salespeople who bring the money in.
If you’re in the market for a new salesperson, you might’ve noticed that you need to pay more now than you have in previous years. It’s not just you – sales hiring has become more expensive across the board.
With hiring costs increasing, business owners are trying to strike a balance: they want to hire the best, but they also want to ensure this investment realises a healthy return.
What are the factors that are contributing to this hiring cost increase, and how should your business approach sales hiring into the future? Let’s find out.
Why does it cost more to hire salespeople in 2021?
Glancing at the news you might assume that there are a wealth of salespeople looking for work. With the ongoing COVID situation affecting almost every industry, surely there are plenty of people out of work, right? Well, not quite.
From a high of 7% in October 2020, the national unemployment rate had fallen to 4.6% by mid-2021 in a trend that thus far shows no sign of slowing. Businesses have adjusted to the inherent volatility of the pandemic, and have begun to hire in preparation of the COVID-normal state that 2022 looks set to present.
The result: candidates have been lapped up, and in 2021 we face an acute sales talent shortage.
Following the inescapable rules of supply and demand, the now limited pool of talented and available salespeople have been able to ask for higher pay than may have been possible a year ago.
The question that business owners need to ask themselves is simple: is a talented salesperson worth such a significant investment?
Understanding the value that sales talent brings
Why should I pay a salesperson more now than I would’ve 12 months ago?
It’s a fair question. The most obvious answer: refusing to pay the market rate will mean you miss out on top talent, and perhaps all talent.
But you don’t want to overpay, so how much is top sales talent reasonably worth?
This Gallup study offers up some answers. When companies select the top 20% most talented candidates for a role, it states, they frequently realise:
- A 10% decrease in employee turnover
- A 25% decrease in unscheduled absences
- A 10% increase in productivity
- A 20% increase in sales
- And perhaps most notably, a 30% increase in profitability
All of these stats are compelling, but that last point is huge. If you pay 10%, even 20% more to secure top salespeople, you can realise an enormous increase in profits company wide.
Fair pay for fair work
Their value put to one side, the modern salesperson arguably deserves a better pay packet than that of their predecessors. In years gone by salespeople could knock off at five and enjoy clear delineation between the personal and professional. The same isn’t true for the modern salesperson.
The smartphone has been equal parts blessing and curse – it allows us to do so much so easily, but this in turn brings an expectation of 24/7 availability, particularly in the high touch, results-driven world of sales. To disconnect is to potentially miss an opportunity, a situation that top salespeople won’t risk.
Not only does the modern salesperson work more than those of the past – despite their base salary still operating on the same premise of a 40 hour working week – today’s top salespeople will in turn do more work than even their hardworking modern counterparts.
Compensation is only fair, and as we saw above, it’s also in a business’s best interest.
The greater the investment, the greater the return
There’s no doubt that the sales talent shortage is resulting in a hiring cost increase. But the most successful businesses will know to look at this situation not as an inconvenience, but as an opportunity.
With fewer top salespeople on the market, if you spend that little bit more to secure the best, you’ll enjoy an even greater advantage over your competitors, who will be forced to fight for lesser talent.
The data is clear: the more you’re willing to invest in your salespeople, the more you’ll get out of them. And if you’re ready to secure the best, we’re ready to help.
At bta Sales we specialise in sourcing the finest sales talent available, even in the most challenging of markets. Get in touch today to find your next star salesperson!