Due to new buying dynamics sped up by the COVID-19 pandemic, nearly 40% of CSOs moved some field sellers to virtual roles and a third are still considering it. Leaders who fail to address new compensation issues resulting from this shift to digital will struggle to attract talent and manage costs.
Gartner research reveals that there is a diminishing return on seller travel. Buyer preferences, along with new technology, allow for effective virtual interactions even for complex B2B deals. While the pandemic didn’t cause this shift, it has accelerated the trend and prompted a more urgent response by sales leaders. Figure 1 highlights the growing popularity of transitioning field sellers to virtual roles.
Historically, sellers were bifurcated across inside and outside execution. Inside sellers didn’t travel and sold primarily through phone- and web-based interactions, often to rightsize selling costs against a lower value, customer tier. Outside sellers relied on in-person interactions to generate greater relationship value in the sale and were resourced accordingly. But now, CSOs, after a forced pilot of virtual selling, are leveraging new combinations of execution, including no-travel, low-travel field sales and high-travel field sales. This arrangement helps manage costs but blurs the line between inside and outside sales.
Seller compensation and fringe benefits are typically driven by market pricing assessments that attempt to establish competitive pay practices by role. Unfortunately, this approach relies on characteristics like job responsibilities and travel, which have become less relevant in a more virtual era, diminishing market pricing effectiveness, at least as a stand-alone practice for compensation analysis.
Sales organizations must evolve with the future of work and the future of sales. They must proactively and knowledgeably engage their internal stakeholders — across HR, finance and sales leadership — to ensure sales roles, compensation and expenses correlate to the postpandemic sales deployment strategy.
Three tactics that leaders must consider include:
Instead of solely relying on market pricing, leaders, working with HR, should validate compensation levels using internal equity to account for the nuances between no-travel, low-travel and high-travel roles.
To reduce title misalignment risks and adapt to evolving seller modalities, compensation practices must be set using sellers’ skills, knowledge and impact. This is particularly important as field-sellers shift to no-travel sales roles. Historically, inside or no-travel sellers earned significantly less than their field-based counterparts. As a result, some leaders consider pay reductions for field-sellers moving to virtual roles. Pay reductions are tricky and will often trigger employee turnover. In this environment, where 90% of HR leaders report being concerned about employee turnover, pay reductions should be avoided, especially if it’s only the level of travel that has changed.
Typically, field sellers are afforded travel benefits to ease burdens and reduce the overall expense of frequent travel. These benefits improve the sellers’ quality of life and contribute to the total rewards package. Frequent travelers often receive travel benefits like:
As sellers shift into low- or no-travel roles, travel benefits become less necessary. For virtual sellers, many travel benefits should be revoked or sunsetted. For sellers moving to low-travel roles, current benefits should be compared to alternatives — such as weighing company car expenses against daily rentals and ride-sharing services.
When it comes to pay fairness, perception is reality. While not specific to sellers, research shows that employees perform 14% better and are 7% more engaged when they have a higher perception of pay fairness.Therefore, whenever sellers have a shift in total rewards, leaders must operate and communicate with transparency. To mitigate risks, they must close the gap between seller expectations and the reality of the changes being implemented. This includes detailing:
Why specific benefits were originally offered
How those benefits no longer apply
When the changes will be made effective
For all impacted sellers, changes must be preceded by clear and empathetic communications. When there is a heightened worry about seller response and turnover, leaders should engage select sellers to participate in decision making and preview preliminary communications. This plan enables leaders to gather feedback and gauge the sellers’ response before changes are broadly announced.
Recommended by the Authors
Gartner Work Location Flexibility Webinar Poll (26 May 2021) (n = 40). Q: “What is your level of concern about employee turnover as certain economics begin to pick up? (Select one.)”
2020 Gartner Employee Pay Perception Survey, n = 5,000