Recruitment and Retention in Sales Are Challenging for Media Companies: Explore How Compensation Impacts Hiring Strategies

So, what are your options to help build your workforce for today and tomorrow?

What the Data Tells Us About Hiring and Retention

To determine where you need to make adjustments in compensation, you'll want to look at the current workforce trends. First, the job market is very tight. Each month in 2023 has seen job creation growth and low unemployment. Salespeople are in high demand, according to data from LinkedIn.

Because sales is a universal role that any business needs, qualified applicants are sought after by many. From veterans to new workers entering the market, candidates have choices, which means your positions must be attractive regarding compensation, culture, opportunity and more.

Even after hiring a candidate, your organization must continue to be appealing because sales turnover is much higher than for other roles. It's always been a high-turnover career, averaging 35% annually. Thus, over a third of your team will require replacement each year.

Filling roles due to turnover is expensive. It can cost one-half to two times the employee's salary. So, when you hire someone, you want it to be for the long term with such a substantial investment.

For HR professionals, these facts put additional pressure on competitiveness, but what does that mean?

What Does It Mean to Be "Competitive" in the Market?

The answer to this question has several layers. The foundation is providing competitive pay. Most media companies still have a structure of salary plus commission. With commission in the picture, sellers will earn varying amounts, so you'll need to start with the base pay.

What to Consider for Offering a Competitive Salary

In determining what you can offer, you'll need to consider:

• Current rates for salespeople across the organization
• The cost of living in your city
• Salary benchmarks based on role, experience and location
• Your local economy
• What you can afford

The second part of the equation is the commission model.

Competitive and Incentivizing Commission Options

There are many different commission models to consider. Each has pros and cons, and there's no standard. We know from industry data that 51% of media companies pay on the net amount of digital sales. Another 33% use commission on gross, with the remaining 16% using a mix of net and gross or another option.

Since a number of publicly traded broadcast companies have recently reported year-over-year declines in core advertising revenue, now's the time to take a closer look at the financial upside of offering digital media to your customers. Yes, there's an expense associated with digital growth. Nonetheless, the fact that digital advertising has a higher cost of goods than linear and O&O (owned and operated) also makes it imperative that you find the right mix of incentives and accountability to grow your digital revenue streams.

Your role is to collaborate with sales leadership to narrow in on the best commission approach and apply that consistently. It's also an area you'll refresh at least annually. Here are some of the most common models and what to discuss regarding pros and cons.

• Commission on net sales: This model accounts for retail costs, so margins are healthy, but lower rates may leave some sellers unsatisfied.
• Commission on gross sales: This model promotes solution selling vs. margin selling, but your margins might be less.
• Commission per tactic (gross or net): Margins are consistent in this model and can prompt salespeople to recommend more tactics, but they may only suggest tactics that pay them the most. It can also be hard to track and manage.
• Ad hoc models: This is when you mix up how you pay commission, which could include different rates for renewals, new business or introductory periods. It can ensure salespeople give equal weight to new and existing business, but it's hard to scale.
• Tiered commissions: In this option, commission depends upon a salesperson hitting a specific number of orders or winning new customers. It's a good motivator and focuses on hitting numbers, but payouts fluctuate, which could impact cash flow.

Beyond Compensation: What Else Can Make Your Station an Attractive Place to Work?

We all work for a paycheck, but there's much more to someone taking a job and staying there beyond the money. According to a Gallup survey, income and benefits topped what employees want. Thus, the benefits you offer are just as important as the salary. People expect a "good" job to have things like health insurance, paid time off and a 401(k), at a minimum.

Next was better work-life balance and personal well-being, meaning employees want flexibility and autonomy. Other desires of the current working world include:

• Meaningful work: They want to do what they do best; in this case, that's building relationships and helping local businesses thrive. Salespeople often spend too much time on manual processes and admin work, which they likely detest.
• Stability and job security: People don't want to worry constantly about their job. As an HR professional, you can help with this by being transparent and communicative.
• Diverse and inclusive workplaces: Many in the survey agreed that this was important to them.

These last desires have a lot to do with culture. If you have a healthy one that values feedback and honesty, you're less likely to see high turnover. Most people don't quit a job solely due to compensation; much of the time, it has more to do with culture and leadership. You have a lot of sway in this arena, so asking what people want and need is something you should do often to ensure your organization isn't defined as toxic.

Be a Champion for Employees with Transparency and Continued Reassessment

You are a champion for your employees and potential ones. Taking steps to ensure compensation is competitive and transparent is a good way to demonstrate this. Play the role of counselor to your sales leadership about what they must prioritize in recruitment and retention. They'll appreciate your knowledge and expertise, so you can build a strong workforce and hiring pipeline.

For more great tips on digital sales compensation and commission, check out our new page, The Ultimate Guide to Digital Sales Compensation for Media Companies. Learn more about compensation models and try out our commission calculator.

This article was written by: Jeff Ulrich, Director of Sales Enablement Services, Marketron

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The opinions expressed here are the author's views and do not necessarily represent the views of MediaVillage.org/MyersBizNet.