Market Overview

Pay Problem for Sales Teams: Korn Ferry Survey Shows Compensation is the Biggest Turnover Issue, Yet Nearly One-Quarter of Companies Not Offering Increases

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A new Korn
Ferry
 (NYSE:KFY) survey of leaders of sales teams across several
industries shows that even though the leaders cite base pay as the top
reason for turnover, nearly a quarter (22 percent) say they do not plan
to increase total compensation for their team members in 2018.

Editor's Note: Survey Results at End of Release

According to the survey, "recruiting and retaining top talent" is one of
the top three priorities for the sales leaders, along with "effectively
going to market through channels, coverage and territory alignment" and
"segmenting customers to align customer need/value with sales roles."

"Clearly pay is a top issue for sales team members, and organizations
that don't regularly review their compensation models against their
competitive set and adjust accordingly will lose top talent," said Korn
Ferry Senior Client Partner Joe DiMisa.

Turnover (voluntary and involuntary) of sales team members does appear
to be an issue, with 30 percent saying they will lose roughly 10-20
percent of their staff, 15 percent saying they will lose between 20 and
30 percent of their staff, and 10 percent saying they will lose more
than 30 percent of their staff due to turnover.

Nearly three quarters of respondents (74 percent) say revenue growth is
their top financial priority, ahead of market share and volume growth
(14 percent); margin improvement (9 percent) and expense reduction (3
percent).

"Experienced sales professionals are the key to increasing revenue
because they are better able to relate to their customers' needs," said
DiMisa. "Creating competitive pay packages, offering development
opportunities, and living out organizational values will help keep those
professionals on the payrolls of their current employer."

About the Survey

The 2018 Sales Strategy Survey was completed by sales team leaders at
128 companies across five industries (consumer, financial, industrial,
life sciences/healthcare, technology) in March 2018.

 

Survey Results (note: due to rounding numbers may not equal 100)

 
How much do you plan to increase total compensation in 2018?
Not at all 22 percent
0.1-1.9 percent 11 percent
2-4.9 percent 46 percent
5-9.9 percent 16 percent
10 percent or more 5 percent
 
 
If you are seeing an increase in pay this year, how much comes
from variable targets instead of base pay?
None 37 percent
25 percent or less 26 percent
Between 26 and 49 percent 10 percent
50 percent 7 percent
More than 50 percent 7 percent
Greater than 75 percent 13 percent
 
 
For your sales teams, what is the average turnover rate
(voluntary and involuntary)
Annually?
Less than 10 percent 45 percent
10-19.9 percent 30 percent
20-29.9 percent 15 percent
30 percent or more 10 percent
 
What is the top reason for turnover of your sales teams? (1 is
top reason)
1. Higher base pay
2. Greater career development
3. Increased incentive pay
4. More attainable quotas
5. Stronger company affiliation
6. More stock options/grants
7. Improved benefits
8. Better work content
9. More flexible schedule
 
What is your organization's top financial priority for 2018?
Revenue growth 74 percent
Market share and volume growth 14 percent
Margin improvement 9 percent
Expense reduction 3 percent
 
What are the top five priorities for your sales teams? (1 is most
important)
1. More effectively going to market through channels, coverage, and
territory alignment
2. Segmenting customers to align customer need / value with sales
roles
3. Recruiting and retaining top talent
4. Better understanding / serving global and key accounts
5. Growing and supporting channel partners
 

About Korn Ferry

Korn Ferry is a global organizational consulting firm. We help clients
synchronize strategy and talent to drive superior performance. We work
with organizations to design their structures, roles, and
responsibilities. We help them hire the right people to bring their
strategy to life. And we advise them on how to reward, develop, and
motivate their people.

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