Survey says strong investments result in solid retention.
Last April, BFL&S sent out surveys to more than 200 distributors asking for information about how salespeople in the forms industry are compensated. While the results were somewhat varied, they revealed that most companies invest significant time and energy toward keeping sales staffs satisfied, an attribute that is especially important during an era when many workers perceive the grass, and the money, to be greener on the other side.
The Initial Investment
It's this new work philosophy that has employers carefully profiling potential new hires, while also presenting an attractive compensation package from the onset. But a risk still exists, and in some cases, investing in a newcomer can be a leap of faith.
For Doraville, Georgia-based F.I.A. Corporation, however, hiring is not based so much on faith as it is on proof.
"When it comes to hiring new salespeople, having a loyal customer base is more important to us than having knowledge of the print business," said Brad Dorsen, president and CEO. "Learning how the industry works is secondary and can be obtained over time."
F.I.A.'s new hires are subject to a six-month trial period, after which the salesperson is reviewed and either accepted into "the family" or asked to leave. If accepted, he or she is given the employee handbook to sign, thus agreeing to company conditions.
One change F.I.A. Corporation has implemented is a slight shift in the percent of gross profit a new hire receives—new sales reps work on a 60/40 percentage basis, while current reps receive 50 percent of the gross profit. They are, however, responsible for extra expenses such as lunch, dinners and travel incurred for new business. Those hired on the new plan receive additional support—such as car allowance—in addition to the 40 percent gross profit. "We will give them what they need as long as it fits within our capabilities," said Dorsen.
Elite Print Services, Muncie, Ind., has also altered its grounds for hiring. Traditionally, the company sought experienced salespeople during its hiring process. The new reps would then be molded into independent representatives. But this has changed.
"Today we are looking for a certain type of person who fits a particular model and doesn't have to have a lot of experience," said President Gary Watson. "Then we train them in the areas that we want to focus on."
Watson explained that chemistry between the potential new hire and the existing staff should be apparent, in addition to a strong work ethic.
"The success of our program is due diligence," he said. "I think I can recognize character and can sense if someone is honest, hardworking and driven."
The initial investment in salespeople takes on two separate processes for Robert Keeler, president of Dayton Legal Blank, Dayton, Ohio.
"When we hire new sales reps we usually seek out some help from county government customers in the area in which we are looking for someone," said Keeler. "For example, if we are hiring a commercial salesperson for the local vicinity, we will use an employment consultant and newspaper advertising." Keeler added that he is interested in the already-intact governmental experience he can gain in a new sales rep by going through county government customers in other regions.
Strengthening the Bond
BFL&S discovered that in some cases, training processes are used as a way to empower new employees and strengthen their bond with the company.
This is particularly true for F.I.A. employees. New salespeople are sent to at least three different manufacturers where they can witness the operation of such machinery as sheet-fed printers and envelope converters.
"A picture is worth a thousand words," said Dorsen. "Our salespeople will also attend open houses and seminars where they receive certificates." A manual detailing goals, and pertinent company information and policies is also given to new hires.
While formal training is not a major concern at Elite Print Services, mentoring is exercised and, this year, reps are being sent to print sales programs, in addition to seminars presented by DMIA.
Dayton Legal Blank opts for more real-life experience as a means to educate new hires.
"We put our new hires out there on the firing line after maybe spending a week in the office to see what we do," said Keeler. "They're out on their own and can prove themselves during a 90-day probationary period."
Rewarding to Retain
When it comes down to the bottom line, employers know that it's the complete compensation package and additional bonuses that keep employees satisfied. This is where retirement plans, stock options and added perks come into play. So much so, that F.I.A. has had to sweeten its pot.
"In the past, our salespeople were given a draw for compensation and then once past the draw they would go straight into commission," said Dorsen. "Back then we would start off at a couple thousand a month. But we've since had to raise that bar."
The amount of money F.I.A. spends on compensation depends upon the amount of sales generated. Sales salaries at the end of last year ranged from $35,000 up to $200,000, reported Dorsen.
The company offers a 401K package which F.I.A. matches dollar for dollar up to three percent of the pay. In addition, the company pays 100 percent of the salesperson's medical insurance and short- and long-term disability insurance. "We also give flexible working hours within reason based upon the traffic in Atlanta," said Dorsen adding that the sales staff also gets half of FICA.
Dishing out a whopping 48 percent of revenue on compensating sales representatives, Watson reports very little turnover at Elite Print Services. But it's not only the monetary investment that keeps employees loyal. "Our company offers such a broad service offering—including print management and e-forms," said Watson. "Not a lot of other companies can offer such a great deal of sales opportunities."
Describing his company as "not too high-pressure", Watson added that he has put together a new business contest for the second half of the year. The contest involves paying additional percentages for acquiring new business, focusing on new business activities, scheduling appointments and conducting presentations and follow-ups. "Our goal is to be able to convert three or four out of five companies as opposed to one or two," said Watson.
Receiving commission-only pay based on the percentage of profit, sales reps at Elite are also compensated with a 401K retirement plan and profit sharing.
Higher than average pay and little competition fosters excellent employee retention at Dayton Legal Blank. In addition, noted Keeler, the company offers a full line of products, unlike its closest competitors. Such expanded sales opportunities allow Keeler's sales reps to do pretty well for themselves—$750,000 to more than one million per year in gross sales.
Dayton Legal Blank's salespeople receive a base salary of $20,000 per year in addition to a 4 percent gross commission. A 401K plan is also offered—which the company contributes to when possible.
"We pay 100 percent of expenses which we don't monitor too closely," said Keeler. "And we provide Cincinnati Reds and Detroit Tigers baseball tickets."
By Sharon R. Cole
