It is a week to be thankful for many things - especially if you don’t have a “Dirty Job.”  No, not that type of dirty.  Dirty as in the Mike Rowe series on Discovery Channel.  MSN.com has a story today titled They’re Dirty Jobs, But They Gotta Get Done.

A sampling of the jobs and their average pay:

Butcher
Leaving work in blood-stained clothes would be a serious HR issue in many offices, but the practice is nothing unusual for a butcher, whose grisly work involves cutting and washing the innards of slaughtered animals to create sides of beef, steaks, sausage and ribs in slaughterhouses and meat-packing establishments. This job is not for the faint of heart. 

Average salary with benefits and bonuses: $25,961/year

Farrier
Farriers inspect horse hooves for defects, trim and shape them and remove worn or defective shoes.  Aside from the strain of shaping shoes with hammers and bending or squatting for long periods of time, farriers must also deal with unpleasant odors emanating from the horses and risk stepping in any number of “surprises” the horses leave behind.

Average salary with benefits and bonuses: $31,604/year

Proctologist
Proctologists diagnose and treat diseases and disorders related to the anus, rectum and colon, a labor of love that involves getting up close and personal in order to inspect these areas frequently and even performing hands-on work to repair or remove the affected body parts.

Average salary with benefits and bonuses: $388,734/year

Ok, I threw the last one in there for some counterbalance.  There’s more dirty jobs if  you follow the link to the article.

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I enjoy skewering the mainstream media for “talking down the economy” which is a practice they condemned back in 2000.  But all signs point to a slowdown in this red-hot economy which has led the Federal Reserve to target a soft landing.

I’m no economist, but I found this article by John Sumser quite interesting.  His take on the economy is one I have not heard (emphasis mine):

The veterans, burnt by the dot com bust and the post 911 recession will argue that business will contract and layoffs will ensue. That’s the prototypical recession profile. Everywhere you turn, this scenario is forecast or implied.

…

Or, there may be a different scenario.

The people who used loose credit to finance the expansion of their lifestyles may have been unintentional evangelists of a new form of inflation. One way of thinking about the folks who “got in trouble” is that they were wrestling with an unmeasured form of inflation. Because there was no way to engineer the raises required to keep up, the second best source of income was real estate equity. Rather than “large living over spenders”, perhaps these folks were just doing what they thought it took to stay even.

Although the press is beginning to demonize people who financed their lifestyles on second mortgages, the question is “what are they going to do without a funding mechanism?”

I think they’ll be asking for raises and when they don’t get them, they’ll be changing jobs.

Imagine this trend in conjunction with a mass departure of the Baby Boomer generation.  The implications on retention, hiring and wages would be beyond significant.

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CareerBuilder.com links to an Entrepreneur.com article that asked…

9 entrepreneurs take a look back at their startup days and reveal what they would have done differently if they knew then what they know now.

Great premise.  Here’s the response I enjoyed the most (emphasis mine):

“We would have spent more time and money on search engine optimization. Top placement in Google is key to any business in this day and age, and the cost of PPC gets higher every day. In addition, we would have placed more emphasis on employee commissions. We’ve learned over time that commissions and incentives drive employees to bring in more business.”

How true that is.  Compensation is a complex topic, but for sales it always comes down to commission.  We are strong believers in a mix of salary and commission with commission always being the largest piece of the pie.  If you pay only a salary with a small variable comp. plan (e.g. year-end bonus), you increase your chances of getting a stagnant salesforce.  If you pay only a commission, you tend to get lone wolves that look out for their own interests first.

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We’ve run into some “unique” problems in handling offers with sales candidate.  Strong salespeople all share one significant ability - qualifying.  This ability, when used in the negotiation process, leads to a desire for real clarity when it comes to an offer.

We lost a strong candidate last week due to a lack of informational clarity within our customer’s offer.  There are many variables to this specific situation, but one thing that came out was that the offer was too vague.  The critical piece of information that was poorly defined was the expectations for the position.  No quota, no targets and no defined levels.

This is a new sales position within an expanding company so it is difficult to pin down exact numbers.  Yet, the refusal of the President to articulate the expectations sent a red flag to the candidate.

Don’t underestimate the significance of a position’s sales expectations.  The strongest sales candidates plug that information into the commission plan to sort out what they will make within the plan.  Most salespeople have a target number they hope to earn and will work the plan backwards to sort out how many sales they have to close to earn that target money.

Our customer, despite our pleas, did not want to explain this critical information and it cost him a strong candidate.

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Ok, it is a cheeky title to this post, but I recently read this Inc.com article - Big Surprise: Most Workers Faking Sick Days (see, Inc.com started it).  In case you had any doubt:

…most workers who call in sick at the last minute aren’t really sick.

…

The real reasons for employee absenteeism range from family issues to personal needs and stress. Indeed, a majority of workers tend to call in “sick” on Mondays or Fridays, with similar patterns appearing around major holidays, the survey found.

So no surprises here but there is a very good point made towards the end of the article (emphasis mine):

Still, Wolf doesn’t blame people for taking the odd day off. She said most workers are forced to juggle increasing demands from the workplace, family, or other commitments, creating what she calls a “tug of war” for their time.

Wolf said employers stand to gain by building a better partnership with employees through work-life balance programs. According to the survey, the five most effective programs for reducing absenteeism were alternative work arrangements, telecommuting, a compressed work week, leave for school functions, and flu-shot programs.

There is a sea change occurring in these benefit areas, but we still see some hesitancy in the old guard when it comes to initiating these types of programs.

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We just lost a strong candidate at one of our customers this week because the company’s offer did not contain a well-defined benefits package.  That always hurts.  Now this morning I read the CareerJournal.com article titled Firms Increasingly Offer ‘Voluntary’ Benefits.  I haven’t heard of this trend, but it is most intriguing.

A growing number of businesses, large and small, are offering employees so-called voluntary benefits ranging from pet insurance to homeowners insurance to help with house closings and estate planning.

The signature character of these voluntary benefits is that employees pay for them, but at a discounted rate obtained by the employer.

Medical insurance will always be the top benefit for employees, but this offering is an excellent idea for creating a different package.  These items will stand out in a candidate’s mind even though they are employee paid benefits.

If I am already paying for some of these items and get get a better deal through my employer, I view that as a tangible, valuable asset.

Employees often don’t appreciate free benefits, Mr. Thompson said, especially if they are benefits they don’t use. However, workers “value having a whole shopping cart of benefits that they can select from,” he said.

I can foresee many small-sized companies taking advantage of this trend too.  In case you are looking for some ideas:

Some of the most popular benefits include supplemental life insurance, group homeowners insurance and auto insurance, and critical-illness insurance, which pays a lump sum when someone is diagnosed with a serious illness.

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We have been running into this topic of late with offers in different industries and it is a real stumbling block for some companies.  I have worked as a salesperson for both product sales and service sales with different commission plans.  The crux of the issue falls on margin.

We typically recommend commission plans based on margins instead of revenue.  Businesses grow by making money.  Yes, a simple statement, but one that can be undercut by a discount-oriented salesperson.

If you provide a percentage of revenue to a salesperson as their commission plan, they are not incented to maintain the price.  It is far more expedient for the salesperson to discount the price (at a small penalty to their wallet) to close the deal faster and move on.  The problem develops when the salesperson starts earning a commission check for a deal in which the company lost money.  That format is what we call upside-down.

Margin is a better incentive in that it does encourage the salesperson to maintain price rigidity in negotiations.  Granted, they can still discount, but it should have a more direct impact on their wallet.

Let’s flesh it out more - product sales tend - tend - to have more predictable costs.  That means gross margin commissions are more predictable.

Service sales, on the other hand, tend to have greater cost variance.  Much of the variance is dependent upon operation’s success.  I encountered this issue first hand when I was selling cabling infrastructures for computer networks.  My commission was based on the final gross margin.  If the installation crew made mistakes, I lost money.  If they took too many breaks, I lost money.  It was a bad situation that was exasperated by the fact that I had no control over the operations side of the business.

We prefer commission plans based on estimated gross margin.  The key is to secure agreement from the operations people no the proposal.  If they sign off on the proposal, it is they their responsibility to complete the job within the proposed framework.  If they fail to deliver, the salesperson is not personally penalized for operational inefficiencies.

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We’re working through some commission plans with our customers and one of the plans has a function to where the salesperson has to clear a certain quarterly revenue level before the commission plan kicks in.  This approach is somewhat common and has its merits.  Personally, I am not a fan of it for one reason.

Sandbagging.

I’m not talking about preparing for a flood (though there was plenty of that activity up here this summer).  I’m talking about getting a deal to the point where it can close today, but the salesperson holds it until the beginning of next quarter, month, week - whatever constitutes the commission time frame.

I know salespeople sandbag deals because I have done it plenty of times in my sales career.  And it only stands to reason - if I can frontload my commission plan at the beginning of the period, I have a better chance of exceeding my quota and accelerating my commission rate.

Keep that move in mind and you develop your sales commission plans. 

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I think many Gen X’ers like myself grew up in the era of $10 copays and the assumption that health benefits were required of employers. Now that I am older and dealing with grey hairs, I have learned the truth about that topic. One thing we try to stress with candidates is the fact that health benefits are 1.) a perk since they are not required and 2.) a significant piece of the compensation pie.

This quick blurb is from the Career News newsletter (sorry, no link):

WASHINGTON, DC –The percentage of U.S. residents covered by employment-based health insurance declined again last year, the U.S. Census Bureau reported Tuesday.

In 2006, 59.7% of the U.S. population received health insurance coverage through an employment-based plan. That is down from 60.2% in 2005 and is the sixth consecutive year of decreases in employment-based coverage. In 2000, 64.2% of the U.S. population had health insurance through an employer, the report shows.
While the Census Bureau revised its previous years’ health insurance estimates - showing that more U.S. residents have health insurance coverage than previously reported - the trend remains the same. According to the report, the percentage of people without health insurance increased to 15.8% in 2006 from 15.3% in 2005.

As a small business owner, I can attest to the incredible rising costs associated with health insurance. If you offer a strong (or “rich”) benefits package, make sure you spell out those details when making an offer to a sales candidate. What was once assumed is now being measured by candidates so use your benefits package to your advantage.

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I just came across an ad this morning for a sales director that started this way:

As a Business Development Director with Idea Information Security, you will enjoy a healthy base salary…

The ad is quite long and covers more topics than needed, but the opening line is a bit of a concern. Hiring salespeople who are money-driven is a wise approach (though there are mitigating factors in that approach). The issue with the opening line is that it sounds like a reward for winning the interview process.

This point is subtle, but we have run into it in the past. We prefer to list base salary amounts in the ad, but we usually list it towards the end. The more important information is to describe the position, the traits that lead to success and the expectations of the manager. The fit you are looking for first is ability.

Compensation, obviously a part of the equation, should not be the card you lead with in the first sentence of the ad.

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