It’s a bird. It’s a plane. No, it’s a silver lining in a jobs report. News of increased high technology hiring in Michigan, the Boston area and in Silicon Valley is welcomed by tech workers wanting to jump to a new job. But hot hiring trends sparking innovative ways to lure workers may not be great news for tech companies hoping to keep the best employees. Still, smart companies will keep the most productive workers.
You can too, if you train your commission plan to fight for the best and brightest. There are two basic ways your compensation plan can help you retain staff.
One, transparency and insight, builds loyalty by helping team members understand that they control their own destiny and are an important part of achieving the company’s broader goals. The second method includes building up rewards or delaying payouts to create excitement about upcoming returns. Transparency helps build employee trust.
In fact, a 2010 survey found that a lack of transparency drove 46 percent of employed job seekers to begin looking for new work at the end of the recession. Here’s how your plan can make your business more transparent:
- Offer Competitive Commissions: A simple salary survey can help ensure your rates are competitive for you region and your industry. Competitive commission rates will help you attract and retain top sales reps.
- Communicate the Benefits of Your Plan: A clear compensation plan that lays outs what is required to receive rewards and accurate payouts. No one wants to stay somewhere if they can’t trust the system and feel they aren’t being rewarded fairly.
- Take Advantage of Automated Insights: An easy-to-use system to monitor progress puts success, and potential payouts, in the hands of the reps that stand to be compensated. A recent survey by CSO Insights found companies using automated compensation systems—with benefits that include real-time tracking—had lower turnover.
- Set Realistic Goals: All goals should be derived from good post-sales information. This helps reps feel that rewards are attainable.
- Align Incentives with Corporate Goals: A compensation plan that is well aligned with the corporate goals, when paired with a communication campaign and real-time information about success, helps sales staff better understand their critical role in the company. Reps who feel like team members are more loyal.
- Leverage Your Top Players: Leveraging the piece of your plan that rewards your top players—increasing commission rates for increasing percentages above quota—so that they are rewarded at three times the rate of bottom performers. This clarifies and amplifies the rewards for success. Don’t be afraid to let reps that aren’t performing leave.
Another way to keep your top talent happy is to draw out incentives by growing compensation over time, often called ‘golden handcuffs.’ High performers will want to stick around to earn their just rewards. Examples include:
- Long-term incentives like strategically timed annual bonuses and retention bonuses. To a lesser extent in this troubled market, stock option grants and restricted stock or shares can have the same impact.
- Splitting sales recognition to include both deal booking and product delivery, for example, could keep staff around at least until the most recent big order is filled.
- A heavily leveraged, uncapped compensation system, which could for example base future commission rates on this month or quarter’s numbers, doesn’t only help even out performance. It also raises the tantalizing promise of increasing paychecks in the next quarter and the next. Who would want to leave when the rewards are always improving?
Your compensation plan can help you meet your corporate goals not only by moving your staff to move high profit deals, but also by helping you keep those that do.