In 2015, market forces will likely change the hiring needs for companies, making salary planning a big priority for firms hoping to sustain their business growth by adding more workers. The number of people unemployed in the U.S. in 2013 decreased 1.5 million from the previous year to reach 20.9 million, according to a Dec. 13 report by the U.S. Bureau of Labor Statistics. With the job market improving and more companies planning for expansion, firms should prepare for 2015 by looking over their compensation budgets. Here are four steps to help with salary planning for sales workers: 1. Establish business objectives for 2015 Before a company can start calculating how much room is in the budget for salaries and incentives, they should establish their business goals for 2015. Whether that’s moving into a new market or launching an improved version of a popular product, companies will have to write down their business objectives and communicate these aims to their hiring managers. Companies’ goals will influence hiring decisions and how they will approach new recruits to build up their pools of talent to achieve their sales targets. 2. Follow expansion in the market For example, the revenue of the medical device market around the world is projected to reach $361 billion by the end of 2014, according to the Global Market for Medical Devices report by Kalorama Information. This value is expected to reach $427 billion in 2018 after growing an average of 3 percent each year between 2014 and 2018. The rate of growth in the market for a company’s products and services could determine the hiring trends and requirements for employers in the same industry. The needs of the consumers in the market will also help direct companies to know who to hire and how many workers are required for that particular demographic, age group, household or industry. 3. Calculate employment growth To effectively plan for growth, companies need to also factor in the cost of adding employees to the payroll by forecasting their employment needs for the future, both for sales representatives and managers. The BLS predicted there will be an average 8 percent increase for employment of sales managers between 2012 and 2022. Certain sales staff will see even higher hiring levels. Between the same period as sales managers, employment for sales representatives for wholesale and manufacturing will grow faster, with an average of 9 percent growth. Companies should assess how much room is in their budgets to recruit new workers as well as pay current employees higher incentives. 4. Pay according to workers’ job market value As companies determine how many people they will hire, they also need to decide how much they will pay these new workers. The projected salary increase for salaried workers not in management in 2015 in the U.S. will remain unchanged from 2014, with a mean of 3 percent, according to a report by pay consulting firm Hay Group and rewards professional association WorldatWork. All employees – from hourly employees to executives – are expected to see a mean of 3.1 percent rise in pay in 2015. While companies decide the pay rate for employees based on workers’ job market value, employers should keep in mind that they may need to increase the salaries of top performers even higher than the average to retain their talent and keep their firms competitive in the market. As companies move forward with salary planning for 2015, they should consider upgrading their sales compensation software. Through these compensation solutions, employers have an easier time tracking employee performance and are better equipped to pay workers according to the value employees bring to the company to increase productivity and job satisfaction. If you’re looking for a solution, learn more about salary planning software from Iconixx.
