I am thinking of hiring, but different idea on the pay scale.

[orion_joel]

Hi All, i have been thinking about a way to be able to hire staff without having to pay out huge amounts in wages before i even know if they are going to make me any more.

So i had some ideas that i thought may work but would like you idea's on if it would show good potential to someone or if i am dreaming.

Because i am in the IT industry the primary area that i would be hiring in is Technical service and Sales. Often times one or other misses out because companies want them to stay in their own area, however i think that this could be done different.

I am thinking of hiring on something like a $300/wk retainer, Offering 45% on Service revenue earned, plus 15% on Gross Profit for all other sales, for someone employed as a service technician and performing the service work. If they are employed as a Sales Rep they would get the same 15% on all sales including service. Although not to say if the sales rep was capable of doing service they could and make the same 45%.

So as an example the a technician i employed who achieved budget each week would expect to earn $79560 per year based on $15600 base salary, $44460 technical services revenue (meeting target of 20hours per week), Sales commission of $19500 (meeting $2500/wk Profit Target).

I wont go into more now as i am know this is already quite a long post, but i am interested in your opinions or ideas?

[KristineS]

The first thing I would say is that Sales Reps and Technicians often have very different skill sets. I'm not saying there aren't people who could do both, but I imagine they would be a bit more rare than someone who could do one thing or the other.

As to the pay scale, a lot of salespeople are accustomed to working on commission, and they could probably accept the concept you're proposing pretty easily. I'm not sure that a technician would accept it with the same ease. I imagine technicians would get straight pay.

It's certainly worth a try.

[orion_joel]

The primary reason that i went along this thought pattern at the moment is that i am seeing more and more that technical staff have some idea about sales, but maybe are not the best sales people and will tend to not sell because they have no motivation. However when they are providing technical services to customers they are often the only person a customer may deal with so it could be a benefit for them to get a cut if they upsell a customer.

Additionally another thing i have found is that technical staff will sometimes be tempted to do jobs on the side, to make extra money. The theory i had here is if there earnings are a minimum guarantee, but with a flexible way to earn income dependent on how much they do. The bet thing for them is that if they actually charge out 40 hours per week through the company they would make a lot more money then if they were getting a straight salary.

It is just an idea at the moment, but i thought it is a way that for the right people could be good motivation to try a different spin on things.

[BillR]

About ten years ago we did this sort of thing with our first employee (who eventually became an owner). This was IT consulting.

We paid him $10/hr + 50% of his billable rate. That ended up being about $47.50/an hour. When he wasn't billable he made just $10/hr.

He made over $100K the first year.

[orion_joel]

That is exactly what i am think of bill, however i wanted to add the extra incentive if he was to sell other product's to clients as part of what he normally did. Because really that was my biggest thing when i was working as a technician for other people, is that i was getting a flat rate per week, they were making huge money charging me out and then when i was onsite working with client's and would ask about thing's and some times often buy from what i told them, i got nothing extra.