A quicker setup, reduced stress, and lesser liability. While this is just a sneak peek of what an average cost of operating sales team can bring to your business, you might wonder if it is better than having an in-house sales team.
Outsourcing sales is an excellent way to add talent and resources to your business. And to help you determine whether it is the right fit for you, it is essential to study both aspects of a sales team. While having an in-house team has its perks, it also comes with a hefty budget.
To optimize our study, we have divided this article into six steps which discuss each aspect of hiring a sales team. In addition, we will also break down costs in every step. So ensure you do not miss out on any part of this post.
Being said, let us quickly get into the details!
In-House Sales Team Expenses - In a Nutshell
Here is a reported cost breakdown for a team of 3
In-House Sales Team Parameters
Expenses (per employee)
Recruitment cost
$30,000
Annual payroll, commissions, benefits
$200,710
Training expenses
$3000
Operating expenses
$4000-$6000
Total Costs Estimate
$288,000
Understanding the True Cost of Hiring and operating a sales team
Fact #1: Recruitment Cost
According to recent reports and studies conducted on the job market, there is a significant increase in vacancies in companies and businesses. There is also a potential raise of 7.3% in the pay, which has some ill effects on the market.
So when you study the statistics of the market reflecting increased salary and competition for having the best talent on board, it is evident that you will need a recruitment company. Only a recruitment company can ensure you get the right people for the job campaign with the skill set, experience, and talent of several people.
Now the question is how much will the recruitment cost be? Remember that the pay you offer new employees must qualify the market standards. After that, the average estimate of recruiting will be about $7000-$8000 for each new employee.
This makes the average cost of recruiting per annum about $30,000, even when you have excellent negotiating skills.
Fact #2: Annual Payroll, Commissions, And Benefits
The world has become competitive for employees, workers, and employers. Today, if you wish to have the best talent in your company, your offer needs to reflect the market conditions.
While this includes salary, you must consider gym members, holidays, food and travel expenses, etc. In a recent study conducted by Glassdoor, the average base salary of an in-house sales representative is about $40,000.
Note that is pay is only for a sales rep, and the payment for a senior sales manager can go up to $55,861 a month. In addition, there will be a base salary of about $26,202 for each employee’s commission.
Lastly, we must not forget the benefits and allowances, which cost $1000 for each person. So when we calculate for each employee, we stand at a whopping amount of $204710 per annum for each employee. This includes the annual salary, commission, and benefits.
Fact #3: Training Expenses
The average training days for a newly hired sales rep is about 2 to 4 weeks. However, depending on the individual, it can exceed this time frame. So if you decide to train the employees in-house, you must pay additional fees to your existing staff.
On the other hand, if you choose to outsource training and management of the sales team, that will also have separate charges. So to determine the total cost of training per employee will be around $3000 annually.
Fact #4: Operating Expenses
Each employee working in your company or business carries operating or overheating expenses. For example, employees will need a laptop, desktop, software, mobiles, furniture, coffee, etc.
So think of it this way the more employees work in your office, the more expenses you have to bear to provide them with the necessities. You might think you already have some extra space, a coffee machine, additional furniture, etc., which can reduce certain expenses.
However, overheating costs do not limit here, as you will have to pay the electricity bill, rent liabilities, and every other amenity used by your sales team.
A study conducted on the operating expenses of employees shows about $5000-$6000 per employee every year.
Is Hiring an Outsourcing Sales Team a Viable Option For Your Company?
There are several reasons why a company might choose to hire an outsourcing sales team. However, depending on your needs and preferences, you must check whether an outsourcing sales team can offer what you need.
Running a business has several obstacles; however, the biggest of all is managing the costs and expenses of the company to ensure it raises sufficient revenue. So if you are looking for a cost-effective solution, you will not regret hiring an outsourcing sales team for your company.
When we say outsourcing sales is a cost-effective option, we just do not mean the money you will save on the salaries of an in-house sales team. An outsourcing sales team has access to the latest technology and systems, which are expensive.
Approaching them will also grant you access to such tools, and outsourcing can become a one-stop solution for all your sales and marketing needs.
While considering outsourcing sales is an important step to create a substantial business, it is equally vital to know why and when to outsource a sales team. So ensure that you are well infomed about outsourcing to maximize its benefits.
