David Cichelli Blog

Moderate Pay Raises Slated for Sales Personnel in 2015 after 2014 Blowout

Posted on January 20, 2015 under Blog

Sales departments plan to increase pay by 3 percent in 2015. However, sales departments have a long history of overspending their compensation budgets. Last year was no exception. It was a blowout, according to the recent results from our 2015 Sales Compensation Trends Survey.

Payouts exceeded the 3 percent estimate by 4 percent for a total increase of 7 percent in 2014. Projected wage inflation increases for sales personnel have remained modest since 2010. From 2011 through 2014, sales departments have projected their next year compensation payout costs to increase at a median 3 percent. Only in 2012 did the payouts match the projections. For 2011 and 2013, the payouts exceeded the estimate by 2 percent. For 2010, the payouts exceeded the estimate by 3 percent.

For 2015, we are again seeing sales departments estimate their compensation payouts to increase 3 percent. This is consistent with pay treatment for other corporate functions.

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Much like the rest of the economy, most sales departments are expecting moderate sales revenue growth in 2015. Survey participants project a 7.5 percent median increase in sales for 2015.

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The Survey results indicate that sales personnel hiring will be improving in 2015. Almost 65 percent of the reporting companies plan to increase headcount in 2015, the highest portion of reporting companies since 2010.

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What else we can we expect to see in 2015? As the economy improves further, the demand for qualified sellers should expand. Hiring will become more difficult. If voluntary turnover increases as sellers seek improved compensation, we may begin to see an uptick in compensation inflation. The 2014 blowout might be a precursor signaling further and more generous wage increases for sales personnel in 2015.