I don’t even know where to begin, but it’s crucial to speak up for anyone considering a career here, especially in sales.
Recently, the company’s senior leadership decided—right before the holidays, no less—to impose a stop limit on the commissionable gross margin for project-based business. Can you imagine how the sales team felt getting that bombshell just as they were about to enjoy the holidays? It’s infuriating, especially after they’ve been out spending their hard-earned money on Christmas gifts for their families.
Let me break this down. The company has two primary service lines, focusing on per diem staffing:
1. **Traditional Per Diem Staffing Model** – This caters to smaller staffing needs (1-2 FTEs). While these deals don’t get much attention, if you land 3-5 of them, you can start to see decent commissions.
2. **Project-Based Staffing Model** – This involves larger staffing needs (10-20+ FTEs) that require dedicated resources. These exclusive arrangements effectively block out competition. Just landing 2-3 of these projects can make your entire year, depending on their size and volume.
These project-based deals are where the real commissions lie, given the extensive services we provide. Salespeople were always encouraged to pursue these projects because the earnings potential was substantial.
What’s mind-boggling is that the company has grown three times the market share over the past three years and is on track to do so again. Nearly half of the company’s revenue comes from these lucrative projects. So why, in the world, would they limit the earning potential of their sales team, the very individuals who have driven this success? It’s absolutely ridiculous.
And let’s not forget the timing. The company just went through a recapitalization, bringing in new private equity partners for a deal worth nine figures. While the high-level executives made millions, they decided to slash the earnings potential of their sales team instead.
Let’s be clear: this decision to limit commissions on project-based deals is nothing more than a shallow move to boost EBITDA. For a company that prides itself on its impressive EBITDA, it’s shocking that they felt the need to take money away from their sales team.
Part of me can’t help but think this was driven by jealousy among some high-level leaders, upset that salespeople were earning more than their annual salaries and bonuses, despite many of them having equity in the company.
This decision has not only infuriated the sales team but has also crushed morale. The excitement that once surrounded selling these multi-million dollar projects, which often took 45+ days to close, is gone. Now, salespeople are making only 1/3 to even 1/5 of what they used to earn on these projects.
The CEO, who took over running the sales team just over a year ago, was part of this decision. My guess is he thinks there’s still a way for his salespeople to achieve the same earnings potential. Unfortunately, he seems to forget that his sales team can do math and realizes the long-term consequences of these cuts.
I don’t usually post on platforms like this, but this decision has been eating at me since it was announced over a month ago. If this continues, it won’t be long before other areas of the business face similar cuts.