The Right Way to Pay Staffing Salespeople

Let’s start with the big picture.

If you want salespeople to sell, you need to give them a compensation plan that rewards selling. It sounds obvious, but too many staffing companies make commission plans complicated, difficult to understand and, sometimes, difficult to get paid.

A good commission plan should accomplish three things: motivate the salesperson to bring in new business, reward profitable business, and encourage the salesperson to maintain the relationship after the sale.

And there is one more rule that should never be overlooked: pay commissions timely when they are earned, and communicate the plan clearly upfront. If a salesperson has to call accounting to figure out why they were paid $1,847 instead of $2,000, you have a problem.

The formula should be simple enough that the salesperson can calculate the commission themselves.

Here are three examples:

1. Percentage of Gross Profit Gross profit × commission percentage = commission Example: $10,000 gross profit × 10% = $1,000 commission. Define gross profit upfront.

2. Percentage of Revenue Revenue × commission percentage = commission Example: $100,000 revenue × 2% = $2,000 commission

3. New Account Bonus + Ongoing Commission$1,000 new account bonus + 5% of gross profit for the first 12 months.

Of the three, I believe the best approach for staffing sales is a percentage of gross profit.

Why? Because revenue by itself doesn't pay the bills. Gross profit does. Paying on gross profit aligns the salesperson with the company. It encourages them to sell the right business, at the right margins, rather than simply chasing revenue.

I also believe there should be a tail on the commission. The salesperson should continue to receive a smaller percentage of the gross profit from the accounts they originate for a defined period of time.

That doesn't mean they service the account. Operations and recruiting should do that. But the salesperson should stay connected, make the occasional call, have lunch with the customer and know what is happening.

The sale may open the door. The relationship keeps it open.

A great compensation plan makes that relationship worth maintaining.