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4 steps for better salary planning in 2015

By December 29, 2014June 11th, 2024No Comments

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.

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Ballast Point Ventures

Ballast Point Ventures is a later-stage venture capital fund established to provide expansion capital for rapidly growing, privately owned companies in diverse industries, with a particular emphasis on companies located in Florida, the Southeast, and Texas. The BPV partners have more than 70 years of combined experience investing in and building high-growth companies in a number of industries, including healthcare, business services, communications, technology, financial services, and consumer goods. BPV has $200 million under management and seeks to make equity investments ranging from $3 million to $10 million.

Harbert Management Corporation

Harbert Management Corporation seeks to generate superior returns for their investors by identifying and investing in the most promising early growth stage companies in the Southeastern U.S. HMC seeks to capitalize on what it believes are compelling regional dynamics, such as a strong and fast-growing economy, significant research and development activities, and an established entrepreneurial community. The HMC team combines substantial investment, advisory, and operating experience with capital and networking contacts to support great entrepreneurial teams in successfully executing their growth plans. With offices in Birmingham, Alabama; Richmond, Virginia; and Gainesville, Florida, it’s well positioned to partner with entrepreneurs throughout the Southeast.

KBH Ventures

KBH Ventures was an early investor in Iconixx Software. KBH's investment philosophy plays a significant role in the firm's successful track record. KBH believes in running businesses to be cashflow positive and profitable every month. Startups and companies in a startup mode, such as one that has been purchased in distress, are expected to generate revenue within the first six months and reach profitability within the first 12 to 18 months. KBH also only invests in or acquires companies that are in the startup phase or have less than $20 million in revenues. KBH targets technology companies that offer business-to-business services.

S3 Ventures

S3 Ventures is an early expansion and growth stage venture firm with $200 million under management. It’s focused on information technology solutions that solve large business problems. S3 also invests in medical devices that improve the human condition. S3 invests in category-defining opportunities. It partners with the team and help focus methodically on what it takes to build a successful company. S3 today helps talented entrepreneurs take their technology and market knowledge and form valuable businesses in a repeatable fashion. Investment sizes start at several million or more for Series A, B, and C financing.