When researching or starting a job in the world of sales, you’ve probably run into the phrase “variable compensation.” You may have even seen a definition of what it means, but what does that really mean for you, the salesperson? If you’re looking to start a new job or career, knowing how much money you could make and if it will be enough to support you and/or your family is important.
That’s why we’re breaking down what variable compensation means, how it works, and what to look out for when perusing jobs to help you feel confident in making the decision to start a sales career or accept a new sales job.
So, what is variable compensation?
Variable compensation is additional pay that is tied into achieving performance objectives. This can mean that you have the opportunity to make money beyond your base salary! Better yet, the amount of variable comp is tied directly to how well you are doing, so if you are beating your goals by 2x that frequently translates directly to 2x the compensation. The better you get at your job, the more returns on that hard work you should see. This system means that you have a clear vision of what you need to do to succeed and can make a plan to reach those goals. It also means that you’ll notice when you’re doing well or meeting goals and get to celebrate with the reward of compensation. Especially when starting a new career, this can be a huge plus because these rewards and clear milestones can help you recognize how well you are actually doing and feel more confident in how far you’ve come and what you can do!
How does it work?
One of the most common forms of variable compensation is commission, where you receive a certain percentage or amount based on how many sales you make. In the world of tech sales, most people start out with a job as a Sales Development Representative (SDR) in which case such forms of compensation are usually based on how many meetings you book since closing deals often falls to Account Executives.
What should I look for when comparing different employers’ variable compensation plans?
While commissions and other forms of variable pay can seem really exciting because it allows you to make extra money simply by excelling at your job, bringing more people in, making more sales, etc. It’s important to pay attention to how much of your total pay is variable compensation.
If an employer offers you a job where most or all of your income is commissions based, you aren’t getting a lot of stability. You don’t have a reliable and steady income provided that you can count on to cover your basic needs each month, which can be really stressful and cause problems down the road.
If you’re just starting out in the world of sales, you might not excel right away. It may take you a little bit to find your groove and you shouldn’t have to stress about having enough food to put on the table or to keep a roof over your head while you’re adjusting to a new job or career.
That’s why Satellite is extremely selective about what employers we bring into our network of hiring partners. We not only look for companies that are willing to help foster and continue to train and support new tech sales professionals, we also look for employers where the majority of the compensation they offer is a base salary (no commissions only employers here!).
This way Satellite graduates not only have the right environment to continue learning and growing they also have their financial needs met. With the right team around you and a steady flow of income you can rely on, it is so much easier to focus your energy on the work you’re doing and start earning more commissions on top of your base pay. With employers like this, you’re truly set up to not just survive, but thrive and make all your career goals a reality.
Want to connect with employers like this? Join the free Satellite Tech Sales Bootcamp and get your foot in the door at any of our incredible hiring partners after graduation. You’ll even get personalized support through every step of the interviewing process to help ensure you lock down the sales role of your dreams.
