Survey Outlines Distributor Staffing, Sales Compensation

As staffing challenges continue to plague businesses across all industries, everyone is keeping a close eye on the U.S. economy and labor market, scrutinizing any fluctuation from month to month. Although many economists claim both are healthy, labor cracks have started to grow, creating challenges for businesses.  

For example, the unemployment rate is rising. It reportedly went up in June (4.1 percent) and again in July (4.3 percent). As of press time, the unemployment rates are the highest since November 2021, even though the Associated Press reports employers have added over 206,000 jobs.  

According to The Workplace Advisors, unemployment rate increases reflect a continuing cooling trend in the labor market. Reports show a notable rise in the number of unemployed individuals by 352,000, reaching a total of 7.2 million. 

One might question, with so many unemployed, why are businesses struggling to find qualified candidates to fill open slots? One reason is that this group includes individuals with varying degrees and areas of expertise, and those that specialize in specific industries. Narrowing the available candidates to those who qualify for a distributor sales role could quickly reveal heightened competition as businesses vie for the limited pool of available talent.  

This competition shifts staffing power from the hiring company to the employee, which presents even more challenges for struggling businesses. In these situations, employers should expect growing requests for wage increases, better benefits, and incentives that will attract quality staff and keep them coming back to work day after day.  

According to The Workplace Advisors, wage growth remains "positive at 3.6 percent year-over-year" and employers should continue to anticipate pressure pertaining to salaries in the months to come. Strong compensation plans will also be essential to attracting and retaining top talent, but will definitely be a hit to business bottom lines.  

These national staffing and salary trends mirror results from the "2024 Sanitary Maintenance Sales Compensation Study." Distributors in the jan/san industry have made a few adjustments in recent years with a focused effort of attracting and retaining the most qualified talent.  

For example, strategies for attracting new, young sales representatives have shifted slightly. Just two years ago, base salaries averaged close to $48,000/year with the promise of higher commission on sales. Unfortunately, these less-experienced reps struggled to build a loyal customer base and revenue fell flat. Today, base salaries hover around the $53,000/year mark for young executives, but still include strong commission structures. Some distributors have even added new incentives to the mix as a way to get young reps in the door. 

Veteran salespeople have also seen financial increases over the last two years, but they come with less of a guarantee. While base salaries have held steady since 2022, seasoned sales reps are fattening their pocketbooks through commission and incentive increases. The move is less predictable for business budgeting, but a commission-plus-incentives comp plan leaves the door for possibilities wide open for an eager rep and can result in positive gains for business bottom lines. The alure of large commissions is appealing to eager candidates confident in their abilities. 

Shifts like these will be attractive in a competitive hiring landscape, but businesses are still careful to balance these offerings with realistic budgeting. In 2022, 53 percent of jan/san distributors were paying commission on the sale, versus on a paid invoice. This was a risky move as supply chain and delivery challenges resulted in an increase in lost sales. Today, only 40 percent of distributors are paying on the sale, while 60 percent reward commission to the sales representative after a paid invoice is processed.  

The shift, reportedly, was met with little pushback. Economists attribute this to an increase in business transparency between executives and their teams. Armed with some perspective, reps have a stronger understanding for the rationale to such a change. 

This increase in transparency has aided in improved engagement in the workforce, too. According to Gallup, employee engagement in the U.S. has not returned to pre-pandemic levels, but there have been improvements in 2024. Thirty-two percent of workers are reportedly fully engaged at work, while only 16 percent are actively disengaged.  

This level of engagement is promising for staff retention, but monetary incentives still push sales reps to perform. For more on how distributors are handling base salaries, commissions, and incentives, sign in to download the full study results.