Sales Scape

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Sales Scape

Bringing you the latest insights from the inside sales, customer care, and account management subject matter experts here at Salelytics.
Want to be kept up to date on the latest Sales Scape news?

Sales Scape

The True Cost Of A Sales Team

by Christian Schommer
March 20, 2024
A cost analysis of what really goes into standing up a top tier sales team.

When it comes to employing a sales team, the real costs lurk below the surface. Often times we think of the cost of employing a worker as just their wages, but there is so much more. Taxes, benefits, recruiting costs, training costs, equipment, IT, all of these hidden expenses play into the cost of a top tier sales team. Think of it like an iceberg, with the salary of the team as the tip, and the rest of the administrative costs as the base below the waves.

The Numbers
Our friends over at Market Source did a deep dive on the numbers (check out their whole article here!) but here’s a quick summary.

Let’s say a salesperson makes 100k in total wages (60k in salary and 40k in commission), on average the total cost for hiring, training, and any needed rehires is 78k. After that, the average employer would pay an additional 20k in benefits and taxes, 8k in IT/equipment costs, and 24k in direct overhead and administrative support. That puts the average cost of a 100k salesperson at roughly 230k. Over twice what traditional wisdom would tell you.

So how do you tell if it makes sense to outsource? You do a cost analysis.

Cost Analysis
Don’t just do salary + bonus or commission + a percentage allocation of overhead calculation, go into all the details.

First, calculate the cost of an individual salesperson. Think about wages, commission, salary, etc. Then the cost it took to acquire them (hiring costs, training, onboarding, etc.), any material costs (think equipment, and overhead), and the additional costs that come with being an employer (think payroll taxes, benefits, 401k plans). Then, multiply that number by the estimated number of salespeople your team needs. That’s a good financial baseline, but from here on things get tricky.

You can put a number on the costs of an individual sales team, but when it comes to those who lead them, those who determine their strategy and tactics, it becomes a bit hazy. So instead of putting a monetary value on it, break it down into the following questions:

Do you have the existing leadership and expertise needed to get the most out of your team?
Do you need to quickly build out a pipeline or increase your sales?
Do you have to set up new technology or a CRM?
Do you have the resources to assume the financial risk?

Once you figure out the answers to these questions, if they aren’t what they need to be think about what it would take to turn that no into a yes, or vice versa. From there you can assign your own value to how difficult it would be to acquire the needed people, processes, or resources needed to take your sales to the next level. Then, through a combination of the quantitative and qualitative evidence, decide if outsourcing would be the best move for your business.

If after going through this process you discover having an in-house team would be too expensive or that you lack the resources or manpower to drive your sales, outsourcing may be the right choice for you.

Is Outsourcing Right For You?
If after going through this blog you realize that your company would be best served by outsourcing part of or all of your sales efforts, we’d love to connect and see if we’d be a great fit! With over 3 decades of experience in industries like B2B, CPG, financial, and healthcare, we have the experience and personnel to take your sales to the next level. Click here to sign up for a time to learn more about how we can help, and if we’d be a good partner in your success!

Christian Schommer, Content Marketing Specialist
I fell in love with Marketing and Sales back when I was in middle school and haven't looked back since! As a Content Marketing Specialist here at Salelytics I've been able to create content for various digital mediums that highlight my passions while developing my creativity and professional skills.

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