Category
Recruitment musings

Career choices & long-term comp transparency

I recently read a good article by Jana Rich of Rich Talent Group about the drive for equal pay for women. In that article, Jana predicts that within 5 years we will have complete comp transparency. Jana suggests a couple of solutions to help us get there but one overarching theme is that women need to be more open to discussing compensation especially amongst their peers. The idea being that, if women talk to each other and have fuller information on what everyone else is making, then they will be better able to know what to ask for and, over time, will be able to narrow the pay gap between men and women. I agree. That got me thinking though about how this socialization of comp and transparency around that area should be applied to something wider – career choices.

I am a big proponent of giving my candidates an idea of where the opportunities that I give to them may take them in the broader fabric of their career – How the opportunity in front of them adds to their “story” along functional, industry and vertical lines – i.e. how they will be perceived by the next hiring manager for the job after the new one in front of them – and what that means for their promotional prospects to bigger roles and larger comp.  I primarily focus on sales roles.

Last week, I spoke to a young SDR (sales development rep who does appointment setting – not closing of business) who was at such a crossroads. The default option was for him to head into a hunting-oriented inside sales role. He was good at hunting for business but was actually more interested in account management. I tried to explain to him the implications of that move so early from a comp perspective. I gave him a full picture of comp structure at each stage for two sample and oft-repeated sales career paths as follows.

HUNTING PATH:

SDR >>>> Inside sales (commercial) >>>> outside sales (commercial) >>>> Outside sales (enterprise) >>>> Manager (enterprise) >>>> VP (enterprise) >>>> CRO

FARMING PATH:

SDR – account manager (commercial) >>>> account manager (enterprise) – Manager of Account managers (enterprise) >>>> VP Account Management >>>>VP Client services

I explained the typical comp structures of Base-plus-100% for hunters (eg 100k base and 100k commission for a total 200k OTE) and Base plus 30-40% for farmers (eg 100k base plus 30k commission) and how, making that move to account management so early, and at a low baseline of earning, would seriously hamper his ability to earn money long term regardless of how many moves he made in the future. I told him that a better choice (just thinking along comp lines) would be to at least hunt for a while and earn more before considering such a move. No one else had given him that context. In the end, his heart was set on account management and he followed that passion, but at least he made that choice with full information. Everyone should have that opportunity to have such full information. So why the big secret?

In sales, the same career crossroads decisions are faced by….

a) SDRs deciding whether to move to SDR management OR to inside sales

b) Inside Sales / Mid-market sellers deciding whether to become a manager of other mid-market reps OR Move to outside sales as an individual contributor

….and most of the time they are doing it in blissful ignorance of the long-term compensation implications of their decision.

I firmly believe that Recruiters, managers, and mentors, should be transparent about laying out the comp implications of such moves. The crossroad choices above are obviously all within the function of sales but what about before that functional decision is even made?

Perhaps, even more importantly, we should be telling high schoolers and college grads about the comp implications (and the 3rd level and 4th level education costs!!!) of broader career paths. What will it mean for you comp-wise if you are creative and pursue a design career? Should you do marketing or sales? Should you become a teacher? Do you strive to work in an agency or with a technology platform? Yes, students should follow their passion, but they should do so knowing full implications of what they are setting themselves up for comp-wise and, ROI-wise viz-a-viz the cost of their education. Going in Eyes wide open is a good thing.