The 5 W's of Automated Sales Compensation

Mar 16, 2020
3 min read
You can’t be strategic if you’re managing even ONE of your critical sales planning compensation, or analysis processes manually. But how do you combat this? Step 1: AUTOMATION.

Are you the employee who’s constantly finding themselves in the trenches of compensation administration? Let us ask you one question: do you think that the majority of your problems stem from your reliance on manual processes? If you’re still managing your day-to-day operations in spreadsheets or homegrown systems, you’re probably already dealing with frustration, late nights, and inevitable errors.

Do you sit at your desk on any given day and ask yourself at least one of the following questions?

  • Every payment cycle is a nightmare—how can I make it more simple?
  • How do other companies reduce errors?
  • Are there any tools or technology that could make my job easier? 
  • What personal/professional benefits would be possible if my job were simplified? 
  • Is my value being diminished in my current situation? 
  • How do I explain this problem to leadership?

If any of these questions resonate with you, you’re not alone. We’re here to tell you—yes there is an easier way—automation. Luckily, we’re also here to address and debunk some of the myths about automation and show you that there’s light at the end of your compensation administration tunnel.

WHY is automated sales compensation such a big deal?  

Sales incentives are essential to maintaining a productive and motivated workforce, but as many organizations are starting to realize, these types of manual commission tasks continue to demand a significant amount of time and labor from their compensation administration teams.

To streamline compensation management processes, many companies are now implementing automated solutions to help ease the burden and help get their employees’ time and energy focused back onto strategic company-wide initiatives. So let’s breakdown the incentive landscape as it stands today, according to the 2019 Sales Compensation Administration Best Practices Survey: Here are a few statistics that exemplify the state of business for companies that have not yet automated:

  • 75% of companies manage compensation manually through spreadsheets or complicated on-premise processes 
  • More than 80% of spreadsheets contain errors (YIKES!)
  • Organizations spend up to 5 hours per month analyzing data from spreadsheets

WHOSE jobs are really at risk?

Here’s the reality: Automation works WITH you, not AGAINST you, so really, no jobs are at risk.

According to a recent paper from the Information Technology and Innovation Foundation:

 “Levels of occupational churn in the United States are now at historic lows.” Translation: the amount of churn since 2000—an era that saw the mainstreaming of the internet and the advent of AI—has resulted in stability for much of the American workforce. In other words, rather than a period of enormous technological disruption, the past two decades have seen an increase in stability for much of the American workforce. In fact, median job tenure today is actually similar to what it was in the 1950s—an era we think of as the peak of job stability.”

The biggest takeaway from automation is this: the streamlining of processes changes jobs from being heavily tactical to more strategic, but it doesn’t replace valuable human beings.

WHERE is automation most critical?

Any sized company can be affected by miscalculations, but when these types of inefficiencies hit enterprise-sized organizations, these manual errors can have devastating consequences. 

When your organization decides to implement a solution built specifically for compensation management, you open yourself up to the benefits of automation which allows your company to achieve the following:  

  • Eliminate errors and risks brought about by spreadsheets
  • Assist in sales planning
  • optimize compensation plans
  • Faster & more efficient operating systems

Overall, an automated solution can help you simplify your complex compensation issues and help minimize the risk your company could currently be facing due to relying on manual, out-dated, and error-prone systems.

WHEN Automated Sales Compensation Makes a Real Impact 

While many companies use spreadsheets to calculate and track employee pay, these systems were not designed for sales organizations that pay their teams on variable compensation. Automated systems not only help take some of the mundane tasks away from your workload, but they also help your incentive teams improve data integrity, reduce manual, avoidable errors, and increase plan and process efficiencies. 

Here are a few Xactly research statistics that can help you picture what automation could look like for your organization. Using automated sales compensation, enterprises can:

  • Eliminate more than 90% of commission payout errors
  • See 50% fewer unreturned compensation plans
  • Allocate 60% less time spent on incentive compensation
  • Spend 80% less time creating and routing plan docs
  • Achieve a 2-3x gain in efficiency over counterparts using spreadsheets/ manual processes

WHAT is your next step? 

The average company spends at least 10% of revenue on incentive compensation. This means that payout accuracy and efficiency are CRUCIAL for any enterprise looking to grow, move quickly, and drive sales results. So how can organizations streamline compensation processes? The answer is simple—automation. 

See how you can get started today—download the “2019 Sales Compensation Best Practices Survey.” 

  • Incentive Compensation
Emily Jahn
Content Marketing Manager

Emily Jahn is a Content Marketing Manager at Xactly. She earned a degree in advertising from The University of Colorado - Boulder and has experience in copywriting, social media, and digital marketing.