Low unemployment and a looming labor shortage means employers have to work harder to attract and retain top talent. Across gender and education levels, salary and benefits are the most important factors when job seekers are choosing an employer, according to research conducted by Randstad North America. 

It is becoming a candidate-driven market again, and job seekers have more tools to determine if they are getting paid what they’re worth.

A recent survey by Gallup asked the question: “What do workers want most out of their job and their company?” The answer can help companies develop better retention strategies. It can also give insights into why employees may join the organization.

Gallup asked employees how important certain attributes are when considering whether to take a job with a different organization. Although the reasons for changing employers are often multi-faceted and typically include the ability to do what they do best and greater work-life balance, a significant increase in compensation is one of the most important reasons.

A Significant Increase in Compensation

Roughly four out of 10 employees (41 percent) say a significant increase in pay is “very important” to them when considering a new job. Specifically, more male employees than female employees say this factor is “very important”. Not surprisingly, more millennials and Gen Xers, than baby boomers, rate this factor “very important” in a job search.
Income matters to people, and organizations cannot overlook its importance. Organizations should ensure that managers have conversations with candidates explaining in great depth the company’s compensation strategy and how compensation programs work.Retaining Current Employees
At the same time organizations must focus on retaining current staff, particularly top performers and high-potentials. Most companies address this in several ways:

  • Developing a Compensation Strategy – Organizations develop a compensation strategy to better understand how pay supports the overall strategy and culture of the company.  A compensation strategy will describe targeted levels of competitiveness for salary, incentives and benefits; the organization’s approach to pay for performance; and how pay programs will be communicated.
  • Compensation Market Competitiveness – Companies regularly assess the competitiveness of their compensation programs by comparing themselves to market. Consideration is given to who they compete with and who they hire from and lose employees to.
  • Salary Plan – As my colleague Rich Sperling and I have stated in our presentations to senior management and human resource groups, merit increases to top performers and high-potential employees ought to be at least twice the amount given, on average, to fully-competent employees. For example, with an overall salary increase budget of 3 percent, 20 percent of employees can receive an average of 5 percent, while the remaining 80 percent receives an average of 2.5 percent.
  • Incentive Compensation Programs – Companies are slowing moving to increasing the number of variable pay plans for two important reasons: 1) to reward employees for achieving corporate-driven objectives, and 2) to reduce fixed costs.
Now is a good time to review your organization’s compensation strategy and determine if its goals are being met. If yes, great and continue on track. If not, re-evaluate your compensation strategy to determine if it remains appropriated and review pay programs to ensure they are in accord with your strategy.

Contact Us
Please contact me at nlappley@lapppley.com or (847) 864-8979 to discuss any questions you may have from this eNewsletter. Feel free to forward this email to anyone else who may be interested.

“Don’t sell me products. Instead, lead me to 
solutions that incorporate your products.”
(Vice President of a strategic account)

In this issue of the Salesforce Alert newsletter, my colleague, Tim Weizer, shares a case study regarding a strategic change that helped achieve effective salesforce results.

The senior sales executive of a middle-market financial services company was puzzled. Key accounts of the firm had often said they were satisfied with the company. Yet the company failed to achieve one of its major objectives: getting deeper penetration of those accounts with a new marketing strategy emphasizing new products.

Individual interviews were conducted with selected key accounts at the vice president level. The answer to the puzzle was expressed clearly by one strategic account. “I want your salesperson to know me, my business, and how your products can provide solutions to my problems,” he said. Strategic accounts now demand this value proposition from their major suppliers.

Here are the five steps the company employed to address the situation.

Step 1. Know where you stand before you embark on addressing this situation. The company had interviews conducted with customers and executives at both the vice president and operational levels to get a clear and factual understanding of:

  • The account’s business as the account sees it.
  • Their business goals.
  • Their problems.
  • How the company is viewed as either a problem solver or a product pusher.
  • How the account’s life would be different if the company no longer existed.

Step 2. Get commitment from the company’s executives that major change in the company is acceptable within the company’s risk-averse culture. Armed with the above strategic account input, the sales executive developed an initial estimate of what additional sales and profitability could be expected from addressing this value proposition. He then got management’s agreement to be open to change the process of how it sells to strategic accounts.

It was clear that without this upfront commitment, no significant change would occur. Without commitment, he knew it would be futile to proceed with any further analysis and financial estimates.

Step 3. Rethink the entire strategic account selling process. This step meant doing a thorough analysis of:

  • The steps involved in the traditional selling process.
  • The time spent with the account’s VP and different operational executives.
  • How well the sales skills/abilities/competencies matched up with the account’s needs.
  • How well the sales organization was managed and rewarded for both existing and new products’ results.

An online salesforce effectiveness survey was included in this step to get the field’s input on a number of topics key to their work with strategic accounts.

The company then developed two options: (1) start a new sales group focused on the strategic accounts’ VP level and add a technical specialist to address questions on the spot, or (2) upgrade the existing senior sales representatives with current new product, technical, and solution selling training. A second and more detailed estimate of additional sales and profitability of each option was prepared.

Step 4. Present each option and a recommendation to the senior management group. Include an implementation plan for the recommended option. The sales executive recommended the formation of a new sales position focused on the VP level along with the formation of the technical specialist position.

In addition, small, cross-functional teams were developed to fully address the value proposition expressed by the strategic account, namely “don’t push product…lead me and my people to an answer.”

HR working with the VP Sales developed a team-based compensation plan for this new structure. Particular attention was given to ensure that the new plan did not create unproductive conflict or misaligned objectives between jobs.

Step 5. Get Started. Begin showing the strategic accounts that you are addressing their value proposition. The sales executive began with a pilot of the new sales position, the technical specialist, and a small cross-functional team. The sales executive also conducted two solid months of training for the team that would be supporting and visiting the strategic accounts.

Results have been better than expected. New products sales to the strategic accounts in the pilot group are up and the teams are working well as a unit.

Contact Us
If you would like to discuss this case study or address any questions, please contact Tim at tim@salescne.com or simply reply back to this email to reach Neil.