- Account for total compensation. Pay transparency laws require a base salary range to be disclosed on job postings, which doesn’t provide the full scope for sales jobs.
- Evaluate what you should make public. Organizations must decide if voluntarily disclosing a total target compensation range is needed to put the salary range in context for high-leverage sales roles.
- Audit the sales job architecture. It is critical for organizations to take a deeper look at their sales role job families, job level architecture and target pay ranges to ensure they are appropriate and equitable.
- Prepare for questions. Sales managers should be prepared to field questions from salespeople about why their pay may be lower than the top of the outlined range.
As organizations make changes to meet new pay transparency laws, they must consider the nuances of their sales organization, as the requirements of the law may lead to misperceptions about the competitiveness of companies’ sales compensation.
Organizations are required to disclose pay ranges in the job posting in several states and cities across the United States, including California and New York City. For example, 85% of U.S. sales teams with strategic account managers for new sales have at least one salesperson living in a jurisdiction with a pay transparency law in place.
First, determine if your total target compensation pay range is critical context when you are sharing the required salesperson salary range. Most of the pay transparency laws only explicitly require including base pay or salary in the job posting or upon request. But salary alone may not tell an applicant the competitiveness of the role.
Risk to a Sales Organization
An organization might be significantly underselling the earning potential of its salespeople and lowering their attractiveness to top talent if they only meet the minimum pay transparency requirements. Many organizations pay salespeople above the median on total target pay but below median on salary. If those organizations only disclose the salary band, then they will likely be attracting lower tier sales talent than the total pay package would typically attract.
Organizations could be tempted to implement a Band-Aid solution by disclosing the minimum information required for each role to comply with laws. However, the better approach is to review the competitiveness of your salary and total target compensation package.
If your total target compensation package for sales roles is more competitive than salary, then include both for those roles even when you have decided to post the minimum information (salary range) for other roles.
Evaluate Total Target Compensation Ranges
The next step for an organization is to think about the salary and total target compensation ranges themselves. Are ranges well established and ready to be shared both internally and externally? Almost all companies surveyed by Aon said they at least have salary ranges in place.
HR leaders have mentioned that their sales organization salary bands have become out of date or inconsistent across business units. Our clients have talked about how these inconsistencies are becoming major headaches and prompting turnover if sales managers speak out of turn when responding to salespeople’s questions about pay ranges in job postings these past few months.
A quick fix for this problem is spot checking the market competitiveness of the salary and total target compensation for sales roles relative to your peer group. A better approach, however, is starting with an updated job architecture to make sure you have sales jobs and salespeople in the right roles in the first place, since that serves as the foundation of pay equity.
Additionally, you could conduct an accelerated leveling initiative, which many total rewards teams are dropping everything to complete.
Ultimately, organizations should use this opportunity to address any underlying issues with their sales organization job architecture, leveling and pay range benchmarking.
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