5 Effective Sales Compensation Trends for Modern Businesses

In a dynamic and competitive market space, it is not easy to sell a product. 

You can argue that a good product is always salable. But the truth is to reach a wider audience you need the skills of an efficient sales rep. 

This means you need a system where your salesforce maintains high sales motivation, performance, and engagement. 

And what better tool than sales incentive compensation to achieve all these goals in one go?

In this blog, we will share with you five effective sales compensation trends that you need to be aware of in 2024 to ensure the relevance and success of your business. 

So, what are these 5 effective sales compensation trends for modern businesses? 

1. Personalized Individual and Team Incentives 
2. Data-Driven Compensation Strategies
3. Incorporating Non-Monetary Rewards
4. Long-Term Incentive Plans for Employee Retention 
5. Automating Sales Compensation for Rapid Business Changes

Now let's deal with each of these sales' compensation trends in detail. 

Personalized Individual and Team Incentives 

Incentives bring desired behavior to your employees. However, there are a variety of employees in your organization. 

People work onsite or remotely; people work independently or in a team and people handle different roles and responsibilities. 

Now a one-stitch-for-all incentive policy does not effectively work in such a diverse workforce. You need to tweak your incentive rewards accordingly to achieve the desired results and goals.

Apparently, 47% of employees want to get a personalized incentive. 

While your remote employee might look forward to a home-office stipend to set up the perfect ergonomics for a work-from-home, your onsite employee would prefer a premium parking slot or an additional day off. 

Similarly, performance bonuses will help drive individual performance while team coordination can be ensured through group development opportunities or team outings. 

Depending on the varying roles and responsibilities, a senior employee will look forward to long-term incentives like stocks. At the same time, a new joiner will be much more interested in a performance bonus or professional development opportunity. 

All these examples show the importance of tailored incentives in driving employees toward achieving their set targets and goals. 

Data-Driven Compensation Strategies

What can mess up your sales compensation plans?

1. Making decisions based on your intuition. 
2. Not considering the employee performance history.
3. Not keeping track of the market trends and conditions. 

Basically, being ignorant about data-driven compensation strategy can have serious consequences on your compensation management. 

The potential consequences range from making poor decisions, unintentional pay disparity,  increased employee turnover, and legal risks related to violation of labor laws. 

If you look around, almost 70% of high-performing companies leverage data analytics for their compensation strategies.  

A data-backed compensation management will ensure fairness to employees. When people feel they are paid right, it will significantly impact their engagement, loyalty, and retention. In turn, it boosts their motivation, performance, and productivity. 

Incorporating Non-Monetary Rewards

All employees crave recognition for the work they accomplish. But not all look for monetary rewards.

A Deloitte study shows that 54% of employees prefer a verbal “Thank You” for their day-to-day accomplishments.

Non-monetary rewards like recognitions, career growth opportunities, flexible work hours, and work-life balance have a huge impact on employees.

At times, these intangible rewards are what motivate your employees to stay and be loyal and motivated to the organization.

The simple reason is that it touches the emotional side of your employees.  

For example: verbal recognition can bring a deeper satisfaction than monetary commission. While offering a professional growth opportunity to employees creates a greater sense of purpose and contribution to the organization.  

The option for flexible work hours and work-life balance makes employees feel the company’s commitment to their personal well-being while supporting their professional growth.

It simply means that the impact non-monetary rewards have on your employees is far more impactful than any monetary bonus or commission.

Long-Term Incentive Plans for Employee Retention 

Incentives are infamous for one key reason- that they tend to encourage employees to focus on short-term goals.  

How can one resolve such a challenge? Well by offering incentives that focus on long-term goals and growth.  

Long-term incentives are part of the executive compensation package that encourages them to associate with the company for an extended period and work for its growth and success. 

The upper management is invested in long-term incentives in the form of stocks, and long-term cash units that have a longer maturity period. 

These incentives create a sense of belonging that encourages top executives to stay for a longer period of time. 

Automating Sales Compensation for Rapid Business Changes

Automation of sales compensation is a need of the hour. Taking a step further, it can also be said that you will be obsolete if you don't have an incentive automation solution in your operations. 

With Kennect you can automate your entire sales incentives process. We help you save time and ensure accuracy. Turn your sales compensation operation efficient with no more spreadsheets or errors. 

With our state-of-the-art features, we enhance your efficiency with: 

• Robust integrations with swift go-live capability, minimal IT dependency, and secure SSO access. 
• AI-powered nudges to empower your sales team to exceed their targets. 
• Unified Query Lifecycle Management to manage queries seamlessly on a single platform, with complete audit trails for accountability. 
• ELT and Calculation Engine that handle millions of calculations in minutes. 

For more information about Kennect and our product, Book A Demo Now!

Final Thoughts

Sales compensation trends are fast changing. 

Things are so fast-paced in the current scenario that what was hype yesterday might have become obsolete today. 

So how do we maneuver through these current trends in compensation and benefits?

Take a pause and think. 

Think:

❓If these emerging trends in compensation management suit my operations? 

❓Can I afford it with my current compensation budget? 

❓How can it enhance my sales compensation plans?

If you can find satisfactory answers to these questions then it's a green light. 

Some modern trends are ever-lasting as well. Invest in an automation solution like Kennect and you know it's an asset for years to come. 

Make the best use of sales automation and compensation analytics with Kennect. Secure A Demo with us NOW.