Negotiating for a higher salary in a biz development job

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills

Negotiating for a higher salary in a biz development job

Postby Paddington79 » Tue Jul 16, 2013 10:23 am

Hello All!
Mr. Paddington79 is thisclose to being offered a new job. He's been itching to move forward after being in a stall for a while.

He works in business development. He's looking for a bigger challenge that suits his credentials -- which this job is -- and frankly, he wants higher base pay given his level of experience.
Here's the thing. Right now he makes a *total* of $XX. A large part of the total comes from commissions; he's built a pipeline as he has been in his current "Stall" for a while.

Taking a new job, he would lose his pipeline -- meaning that he could conceivably be taking a new job and making less money, something we just cannot afford right now. So he wants to negotiate up a higher base.

Do you have any tips for advancing, salary-wise, in a business development position? Should he be negotiating his base based on his total now? As I say, we're about to buy a house and can't really afford him to take a pay cut -- and he's paid his dues, at this point in his career shouldn't be moving backward. Ideally he would like to make at this new job his *total* salary as new base, then get commission.
Is there a savvy way to negotiate this? It's tricky as it's not a straight salary situation. Thanks!
Paddington79
 
Posts: 45
Joined: Sun Jun 23, 2013 1:51 pm

Re: Negotiating for a higher salary in a biz development job

Postby Meg77 » Tue Jul 16, 2013 11:41 am

Most jobs that have a sales component (at least on the higher end) will come with a signing bonus to make up for any commission/bonus that would be lost during the transition. Of course he should get a boost in base salary to move as well - many people in sales would never move unless it came with a double digit boost in base pay since you are giving up a known employer sales environment, an existing pipeline, and possibly a client base to move to an unknown environment and start over from scratch.

Of course that "rule" doesn't apply if you are making a shift to a new industry or *need* the job because you are unemployed or your company is shutting down. Keep in mind too that a sales person who is anxious to leave their current position and/or who doesn't demonstrate that they think they are worth more that they are making now may even be seen as less competent or bad at their current job (in which case the new employer may be inclined to pay you even less or not even hire you). It also depends on how much the new company wants him and how likely it is that he'll be producing right off the bat or able to bring clients over. More experienced people will be given larger bonuses to move since they'll likely make up for that money spent quickly. And companies that need new people quickly due to an expansion or if part of their team quit suddenly will be apt to pay more to get new people in the door. If it's a very desired position though with lots of eager applicants he may not have as much leverage. Just something to keep in mind when coming up with numbers to ask for.

You'll be a lot better off asking for a modest increase in base pay and a heftier signing bonus rather than a huge salary increase. Management is usually more comfortable with a bonus since it's a one time expense that sometimes comes out of the HR cost center rather than an ongoing addition to the sales team's bottom line (which could negatively impact the new manager's own budget goals targets, which likely would affect his or her bonus).
"An investment in knowledge pays the best interest." - Benjamin Franklin
User avatar
Meg77
 
Posts: 655
Joined: Fri May 22, 2009 2:09 pm

Re: Negotiating for a higher salary in a biz development job

Postby upsydaisy » Tue Jul 16, 2013 2:28 pm

I agree with the previous answer on the thread. As someone who hired (and fired) tens, if not hundreds of sales and BD people over the years I was always suspicious of people who were negotiating for a large increase in base. They would have stories similar to yours (pipeline, need to maintain income, etc) but my suspicion was always that they were a mediocre BD person who knew it and happened to be doing quite well (perhaps through a run of luck) and were trying to parlay that into a longer lasting increase in base.

On the other hand, when someone has paid their dues and is good, I always thought it was very reasonable that they expected to see their base go up a little each time they moved role or company.

Finally, as the previous post says we never had an issue with sign-on bonuses as they were one-offs from a p&l perspective.

So, overall, I'd ask for an increase in base but not a crazy one and then ask for a sign on bonus using precisely the arguments you've used here - we are buying a house and so need consistency in income right now and have a pipeline at the old place to deliver that but, in the long term, want to work here at the new place. If they are still reticent the final thing I would suggest is that they phase the sign on bonus so that you get it over three or six months (this is what his pipeline commissions would've done after all). Would be tough to argue with that if they really value him.
upsydaisy
 
Posts: 48
Joined: Mon Jun 04, 2012 1:06 am

Re: Negotiating for a higher salary in a biz development job

Postby Paddington79 » Tue Jul 16, 2013 2:40 pm

Thank you!
How much of a percentage in base increase do you think is reasonable?
Paddington79
 
Posts: 45
Joined: Sun Jun 23, 2013 1:51 pm

Re: Negotiating for a higher salary in a biz development job

Postby Chan_va » Tue Jul 16, 2013 2:44 pm

Here is what I have done as a hiring manager in the past. If I were recruiting a sales person I wanted, I would "guarantee" a certain commission level for year 1. Similar to a sign on bonus, but you don't earn commissions on new sales till you cover the "guarantee". Other negotiating points are "quota". Most sales plans rachet up your commission once you hit quota, so the lower the number, the better (for the sales person).

I have never negotiated much on a higher base. My position has always been that you are in a sales role - if you want a steady income, sales is not for you. Supply and Demand in the end - if your husband has the track record to prove his performance, he will have more negotiating power.
User avatar
Chan_va
 
Posts: 401
Joined: Wed Dec 05, 2012 8:15 pm

Re: Negotiating for a higher salary in a biz development job

Postby Meg77 » Tue Jul 16, 2013 4:22 pm

There is no way to know what is an appropriate raise to ask for without knowing the industry he's in, age, salary history, sales production figures, etc. Even with that info it's difficult to make a recommendation without knowing the applicant personally and the new employer's general practices. I'd recommend he talk to people that work at or used to work for the company he's moving to in order to get a sense of what is usual or appropriate if he has no idea. If he's really so "stuck" as you say though he may have trouble asking for too much since he seems anxious to get out of the role he's in currently. Everything in life's a trade off...
"An investment in knowledge pays the best interest." - Benjamin Franklin
User avatar
Meg77
 
Posts: 655
Joined: Fri May 22, 2009 2:09 pm

Re: Negotiating for a higher salary in a biz development job

Postby upsydaisy » Wed Jul 17, 2013 2:44 pm

Meg77 wrote:There is no way to know what is an appropriate raise to ask for without knowing the industry he's in, age, salary history, sales production figures, etc. Even with that info it's difficult to make a recommendation without knowing the applicant personally and the new employer's general practices. I'd recommend he talk to people that work at or used to work for the company he's moving to in order to get a sense of what is usual or appropriate if he has no idea. If he's really so "stuck" as you say though he may have trouble asking for too much since he seems anxious to get out of the role he's in currently. Everything in life's a trade off...


+1

And, really, in sales/BD, it should be about the base ... if he believes in the new company (and its product), that's where he's going to make the real money: by selling it and doing well off the commissions. When I hired people in these sorts of roles, anyone who focused too much on their base set off immediate alarm bells.
upsydaisy
 
Posts: 48
Joined: Mon Jun 04, 2012 1:06 am


Return to Personal Finance (Not Investing)

Who is online

Users browsing this forum: EyeDee, letsgobobby and 48 guests