Sales departments plan to increase pay by 3 percent in 2015. However, sales departments have a long history of overspending their compensation budgets. Last year was no exception. It was a blowout, according to the recent results from the Alexander Group’s “2015 Sales Compensation Trends Survey.”
Payouts exceeded the 3 percent estimate by 4 percent for a total increase of 7 percent in 2014. Projected wage inflation increases for sales personnel have remained modest since 2010. From 2011 through 2014, sales departments have projected their next year compensation payout costs to increase at a median 3 percent. Only in 2012 did the payouts match the projections. For 2011 and 2013, the payouts exceeded the estimate by 2 percent. For 2010, the payouts exceeded the estimate by 3 percent.
“For 2015, we are again seeing sales departments estimate their compensation payouts to increase 3 percent. This is consistent with pay treatment for other corporate functions,” said David Cichelli, survey editor and senior vice president of the Alexander Group. “Most sales departments are expecting moderate sales revenue growth of 7.5 percent in 2015,” Cichelli added.
The Survey results indicate that sales personnel hiring will improve in 2015. Almost 65 percent of the reporting companies plan to increase headcount in 2015, the highest portion of reporting companies since 2010.
What else we can we expect to see in 2015? As the economy improves further, the demand for qualified sellers should expand. Hiring will become more difficult. If voluntary turnover increases as sellers seek improved compensation, Cichelli said, there may begin to be an uptick in compensation inflation. The 2014 blowout might be a precursor signaling further and more generous wage increases for sales personnel in 2015.
Read more about the latest sales compensation trends, quotas, practices, costs and recognition events in the Executive Summary. Visit www.salescompsolutions.com to obtain a copy.
