Skip to main content Skip to footer

"I had a brilliant experience with this agency, very quick and attentive. I applied for a job via CV library and within a couple of hours I had a call from Simon Bonner who guided me through everything I needed to know. Simon got me an interview and it was a very quick turn around. Amazing service and no fuss. Thanks Simon!"

Gemma Fairbother, Candidate

Commission Schemes - Questions and Answers

In March 2020, I was invited to a Q&A on commission schemes by a journalist from PrintWeek

Here is a transcription of the salient points from the Q&A

How should salespeople be rewarded? Should they receive a higher basic and lower commission or vice versa?

Without being glib, that depends. For instance, in software, once the product has been developed, every transaction is new income and typically contains high-profit levels. In software sales, the 'cost of sale' is usually low, and therefore, many pay both high basic salaries AND high commissions. In many B2C environments, the base salary is lower, but the commission percentages are high. In industries such as engineering, or medical devices, where niche expertise is required to sell the product, you tend to find that Basic salaries are higher, but the potential to earn is no more than circa 20% of the base salary.

What is the right level of basic and commission percentage - how should this be calculated? Why should employers not use a scheme that advances commission to sales staff?

This is a huge generalisation as it differs from industry to industry, but a commonly used 'rule of thumb' is that a salesperson should generate five times their total cost in gross margin. However, in some sectors, software again, for instance, it could be many multiples of this and in, for example, the professional services industry, it may be as low as two times. However, if you think of a £35K Basic salary field account manager with a car and £50K OTE, their real cost with employer's NI, expenses, etc. is more likely to be £70K; therefore, they should generate £350K of GP.

Why (how) can a sales commission scheme make or break a firm?

I have known companies where commission was paid on all sales, regardless of profitability. To elaborate, I once knew a firm that was paying a flat % on all sales income as commission, and there wasn't a process to control discounting. Consequently, the firm was winning unprofitable business AND paying commission on top, so a double loss to the firm.

Good commission schemes should i) Motivate each sales team member to push for more significant sales numbers, ii) be easy to calculate for both the firm and the salesperson and iii) should work in conjunction with the company's broader values and vision.

You have said that there are four common types of commission scheme. What are they and how do they differ?

  1. A commission scheme based on a percentage of Sales Income – easy to calculate but fraught with potential hazards unless the pricing is fixed or the salesperson is not authorised to discount.
  2. % of GP – probably the most common scheme in the UK. However, unless there is a standard margin on every project won, it can be difficult for the salesperson to calculate and therefore not particularly motivating. However, a simple spreadsheet, and some CRMs, can calculate the commission for the firm and their sales colleagues.
  3. Commission paid on GP or Sales Income but also upon meeting other factors such as customer satisfaction surveys, key performance indicators, or changing behaviours in agreement with their line manager.
  4. % of GP above a threshold – the salesperson has to generate their real cost in a particular month/quarter for the commission scheme to apply. Therefore, if they do not cover their cost, they don't earn any commission that month or quarter.

However, there are many more commission schemes, such as a percentage based on individual performance and the remainder based upon meeting team targets or overall company profitability. These schemes seem great in theory but are entirely unfair for the top salespeople. For example, is it fair that the top salesperson bringing in 30% of the firm's income earns the same to their colleague that generates just 5%? Consequently, in this culture, firms often lose their top performers.

How can firms use a scheme to encourage the right behaviours?

Firms can implement a simple mechanism whereby KPIs have to be met for the commission to apply. Most salespeople, naturally, aren't great at detail or process and see 'paperwork' as a necessary 'evil'. However, many firms have introduced CRM systems and then calculated commission based on the CRM system. Consequently, the salesperson immediately starts to input the required data – a tremendous win-win to simplify commission calculations and get the data on the system!

How should a salesperson be rewarded for helping the company achieve a sale when they themselves didn't actually make it - they, for example, passed an enquiry on to someone who did make the sale?

Many companies offer split-commission, where some is paid to whoever uncovered the lead and the remainder to the person that closed the deal. Some firms have introducers, nurturers and closers that each look after a different part of the sales process and they then secure business as a 'team'. Personally, I don't think that it provides the best experience for a customer, but many firms have successfully deployed their best-skilled person to an individual segment of the sales process.

Working collaboratively to achieve account penetration is something that should be actively encouraged by all sales leadership teams. I'm also a big believer in 'what comes around goes around', so if the Northern Account Manager uncovers a lead for one of the Southern depots, it should be passed on without reward. They would do this in the knowledge that their corporate culture ensures they'll get a 'lead back' in the future.  

Many companies offer split-commission in this situation, but one party in the arrangement always feels that they 'did more work to earn their share' and just causes ill-feeling in the sales team. I have seen feuds between good people go on for years over split-commission, together with physical fisticuffs on one occasion. Split-commission should only apply when it is carefully mapped out and contractually formalised so that all parties understand the 'rules of engagement'.

How should commission be paid - an element paid quickly (monthly) or more slowly over a quarter or at year-end?

Most salespeople want to 'feel' successful, so I encourage firms to pay monthly or quarterly so that they receive the 'big cheque' when they have the 'stellar month'. Commission paid annually can often have an adverse effect, mainly where commission is 'capped'. I have known many salespeople that have hit their sales target by, say, month seven in a financial year and then 'downed tools' as they couldn't earn any more commission. They then float around for a few months until the end of the financial year to pick up their commission before moving on. The second biggest' golden rule' of creating commission schemes is 'don't cap them'.

How should a scheme be implemented? And should it change with a salesperson's experience?

Schemes should be altered by including long-standing top-performers in the dialogue. However, the golden rule is that every commission scheme must have a caveat along the lines of the 'directors have the right to vary the amount or terms of the commission scheme or withdraw it, providing you with x weeks' notice'. This means it can be tweaked without consultation if a new scheme isn't working. Also, in times like the current COVID-19 era, it means that firms can protect their cash assets by postponing commission payments until the business returns to something resembling normality.

How should commission for 'bad' sales be clawed back without causing ill-will?

In theory, many firms pay a month in arrears, so it's clawed back before it is paid out. Others hold it against future commissions. The key, like most things in life, is communication. Salespeople don't like surprises, particularly when it impacts their income.

Some companies pay 70% of the commission payment every month and the remaining 30% as a quarterly target, which considers things like debtors, bad debt, or 'bad sales'. This 30% could also be based on meeting broader business goals such as company profitability team targets or meeting the key performance indicators required for consistency. 

To reward consistent performance, a 'clever' scheme would be one that pays 70% for meeting individual monthly targets, but the additional 30% would only be paid for exceeding the quarterly target.

What is the importance of having a transparent and flexible commission scheme?

Commission schemes should be as simple as possible so that they meet their main objective for the salesperson to keep pushing and striving for higher sales. Regardless of past performance, longevity, etc., everyone in a 'like for like' role within a sales team should be on the same commission scheme.

Personally, I think that all sales data should be visible so that it generates healthy competition amongst members of the sales team. It also helps discourage things such as 'holding back business' to the following month or 'top drawing' leads so that they're not in the sales forecasts for next month, etc.

Do you have (anonymous) examples of bad schemes made good or good schemes ruined by management?

I would disregard any commission scheme that is so complex and convoluted that a salesperson cannot calculate their earned commission in under a minute. Also, it's preferable if they can make that calculation without using a company commission spreadsheet. 

I was once on a commission scheme where you scored a 'goal' for every £1K of sales. Then every £250 discount was a 'goal against' and every week was a game. You were then in a league against colleagues, and the percentage you earned changed upon where you were in the league at the end of each month. It was a brilliant scheme in theory and a very early attempt at 'sales gamification'. I can imagine the directors at the time in their boardroom feeling ever so chuffed with their scheme that protected margin, reduced discounting and formed healthy competition. But it just didn't work. It didn't motivate the sales team, so it failed to meet a commission scheme's primary criteria. Consequently, sales activity dwindled, and after three months, it was scrapped.

Date published: 26th February 2024

Icon for Recruit sales staff in the UK

Recruit sales staff
Just fill in your details below to get started

Rob Scott - Aaron Wallis

by Rob Scott

Managing Director

Rob Scott, Aaron Wallis Sales Recruitment, Author Photo

About the author

Rob Scott

Rob is the Managing Director of Aaron Wallis Sales Recruitment, a national recruitment agency specialising in sourcing sales and marketing staff for businesses across a broad range of commercial sectors. Before setting up Aaron Wallis, Rob spent ten years at a specialist Sales and Marketing recruitment division of a £0.5BN recruitment group, leaving in 2007 as Marketing & Sales Director to establish Aaron Wallis.
 
With over 24 years of experience in sales recruitment, Rob is a History graduate with an MBA (Merit) and a PgCert in Management Practice.  In 2007, 2009 and 2013 Rob conducted the most extensive surveys of sales professionals in the UK and is a trusted authority in the sales industry. From guiding employers through the recruitment process to helping candidates find their dream job, Rob's advice has been quoted in leading publications such as Business Insider and The Independent, as well as OnRec, which host The Online Recruitment Awards every year.

Please call us to discuss your vacancy

Milton Keynes

Birmingham

Bristol

Our employers say...

Giles Phillips is a rare find in the minefield of sales recruitment; an honest and thoughtful recruiter who considers the needs of both the client AND the candidate to create perfect role matches. I look forward to working with him again in the future.

Marketing Director, City of London Police

We appointed Aaron Wallis in February and the successful candidate, out of the six which Aaron Wallis introduced, was able to join Alphametrics before the end of April. The whole process took less than three months. I would recommend Aaron Wallis' services to others without hesitation.

Chief Financial Officer, Alphametrics

George is a rare find in the world of recruitment - communicative without being pushy or over-bearing. He listens and understands what the customer needs as gets to know the business to ensure he provides fully competent candidates who fit.

HR Manager, Big Dug

I have used Aaron Wallis to fill a number of our Sales Development Manager roles and I have found them to provide a very professional service. I will use their services again in future recruitment campaigns.

HR Business Partner, Greene King

George is a joy to work with, and I'd recommend him to anyone seeking that unicorn hire - he found me mine, and I'm delighted!

Director, Education Support

I can't fault Sam or AW! Sam was a pleasure to work with and provided great support from the start. Sam always provided me with timely updates when required and provided outstanding candidates!

Director, Waste Managed Ltd

Sophie did a great job at understanding our business and our needs, she is extremely professional and we hugely benefitted from her experience and expertise.

HR Manager, The Data Privacy Group Ltd

Rob’s knowledge of the recruitment industry and his thoughts and how to make it better for his clients have always been eye opening. I would recommend Rob to anybody who is looking for a professional, knowledgeable and flexible recruitment specialist.

CEO, Friday Ad Online Services

Thanks for all your help during the recruitment process. I have been extremely impressed with Aaron Wallis especially when compared to other agencies we have dealt with. I really felt you grasped the type of person we required and found strong candidates.

UK Sales Manager, Nexcom

I really liked the YouTube presentations which made the service seem both simple and accessible. The company came to see me, and my management team, at short notice to present their service and I liked the support and advice that I received about maximising the results from the applicant.

Managing Director, Leisuresec plc

I found Aaron Wallis to be very professional and efficient, taking time to understand the role and the type of candidate we were looking for. The candidates they put forward met our criteria and were of a high standard. The service they provided was exemplary and I would have no hesitation in recommending them, and will certainly consider using them again in the future.

HR Assistant, Fischer Connectors Ltd

I could not suggest anything I would like you to do better. The service you provided materially exceeded my expectations. I would especially like to commend Simon Bonner; he is easily the best recruitment consultant I have ever dealt with. I particularly valued his advice and guidance throughout the recruitment process. 

UK Sales Manager, BTS Holdings Limited 

Giles is highly professional and was a pleasure to work with. He achieves excellent results through his personable skills and tenacity. I have no hesitation in recommending Giles to anyone who considers employing his services.

Commercial Director, G4S Government & Outsourcing Solutions

Rob is a true recruitment professional that goes the extra mile that I have never experienced from any other recruitment agency before. If you need sales people call Rob or someone in his team, as they really are experts in sales recruitment.

Sales Director, Inside Business

In an industry where people over promise and under deliver, Rob and his teams have consistently provided a high-quality service. It is great to deal with someone that has an excellent understanding of UK industry, and a passion for sales.

Sales Manager, TR Fasteners

George came recommended by a colleague and has been a pleasure to work with. He was great at updating us on his progress and ensured a great experience for both client and candidate.

HR Manager, Annapurna Recruitment Ltd

We were impressed not only by the quality of candidates you found for us but also the level of information, preparation and qualification you put into the process. You continually kept us informed of each person’s feelings about the process, which is very important but often overlooked. I am looking forward to working with your company again in the future.

Commercial Director, Incentive Facilities Management

I just wanted to thank you for your help with our recruitment process which went very smoothly and has – we hope – found us just the person for the job!

Managing Director, Citrefine International Ltd

Understood the type of person we were looking for and good follow ups - not too frequent.

Managing Director, bigHead Bonding Fasteners Ltd

As always we were extremely impressed with Rob's understanding of the role and our specific needs.

Managing Director, Speck & Burke

Really good service. Just the right amount of contact and easy to deal with.

HR Manager, Zircon Software Ltd

Very professional service and will certainly be in contact for future recruitment.

Director, Blakedown Sport & Play Ltd

Generally good standard of candidates. Especially liked the personality profile. Overall good value for money and will certainly use you again.

Managing Director, Medicash

Thank you for your dedicated help during the recruitment process - we came to you after unsuccessfully searching elsewhere, and hired, not one, but two! Quick response times, and a really personal approach, without being pushy.

Managing Director, Accora Ltd

Since joining DSGi, Rob has been a supplier of permanent staff and has performed to an extremely high standard, successfully filling 98% of roles he has worked on. If anyone is looking for a good sales and marketing based consultancy with an informal yet professional approach, I would recommend Rob.

Senior Recruitment Consultant, DSG International

Aaron Wallis has continuously provided us with suitable candidates that have been proactively sourced. Having used countless recruitment companies, Aaron Wallis are the only company that I can count on to deliver.

Managing Director, JARK Healthcare Recruitment

I have always found Rob to be very knowledgeable about our industry sector, and it is refreshing to see after all of these years that Rob continues to quickly and accurately understand my requirements.

HR and General Manager, THK

Our candidates say...

I have to say coming across and having dealings with Aaron Wallis proved to be very successful. Being highly experienced did not seem to count for much during my job search bit a conversation with Robert Scott gave me a real confidence boost and enabled to get a position at the age of 63. Great service!!!

D. Burgess, Candidate

George above and beyond to make sure I had everything I need to secure my new role. Outstanding Professional.

A. Kirkland, Candidate

Aaron Wallis Sales Recruitment are a very friendly and professional recruitment organisation who listen to your needs, work with you and act on your behalf which sets them apart from many of their competitors who in my experience are willing to throw anything at you. We discussed my history, my preferences and my wishes - one opportunity was introduced. It was perfect. I start at the end of June.

R. Buckley, Candidate

Professional and responsive from start to finish. I would highly recommend. Special thanks to Sophie J for her help and support throughout.

N. Leney, Candidate

A great recruitment company to work with. Excellent experience with Aaron Wallis through the entire recruitment process. The team was really professional and extremely helpful. Darren was a pleasure to work with. He was friendly, supportive and gave me great advice. Thank you very much!

A. Bauchet, Candidate

Aaron Wallis is an outstanding recruitment agency specialising in high calibre sales positions. I was working directly with Darren Dewrance who went above and beyond my expectations in sourcing me my perfect role. I was kept in regular communication with Darren and he worked extremely hard to secure my dream job. Highly recommended and Thanks Darren for all your expertise and hard work.

R. Sealy, Candidate

The service provided by Aaron Wallis has been just great. I was constantly informed about what was going on with the process interview and the agent has always been supportive and kind to me.

L. Colagrossi, Candidate

Sam was by far the most professional and helpful of any individual I've ever dealt with through a recruitment agency. He was supportive and thorough throughout the process. He definitely goes the extra mile for you. A pleasure to deal with. I would highly recommend him. An asset to Aaron Wallis

M. Wyer, Candidate

Excellent experience. Knowledgeable staff and really went the extra mile. Found my ideal position and I couldn't be happier. Special shout out to Sam and George: who made the process smooth and easy for me. Highly recommend.

K. Pearce, Candidate

Very polite and friendly and was very helpful finding me my next new role.

K. Craggs, Candidate

George Humphries was a complete professional at every point, from our first phone conversation to his “good luck tomorrow” text on Sunday before I started in my new role.

E. Fry, Candidate

Less than two weeks after joining Aaron Wallis I was offered my new job. I got a £10,000 rise in my basic salary, car allowance, a laptop and many other perks, which will help to further my career. I definitely would not have found my dream job without the help of Aaron Wallis.

C. Hoy, Candidate

Sophie contacted me about a role explained the details clearly and made sure I was ready for the interview. She kept in touch every step of the way till I started the job. Thank you Sophie for a great experience.

S. Powell, Candidate

Aaron Wallis (and in particular Rob Scott) have been fantastic throughout the recruitment process, and even a few months down the line, still continues to care. Rob clearly cares about each individual and has a wealth of knowledge and expertise, which shows in the work he does. Each candidate is not just a number, and the support received from Aaron Wallis has helped me get a career which I truly enjoy.

M. White, Candidate 

Fantastic customer service, communication was brilliant, happy polite people to talk to, made everything a lot easier and smoother. Thank you for all your help getting me back in the work force, Keep up the good work :-)

K. Everitt, Candidate

Managed to get me placed within a week! Really friendly and easy to deal with. Always available for a call and my biggest challenge was I was in work at the time I was looking for my next opportunity (which is stressful) but Sam made that easy.

P. Fitzsimons, Candidate

I would highly recommend thank you to Darren for helping me secure my new job role! Excellent service all round!

G. Thompson, Candidate

Good swift process with Aaron Wallis, informative regarding the role and the process was moved at a good pace with healthy interaction. Would recommend them to anyone pursuing a change.

S. Bartlett, Candidate

Sophie helped me secure a new role I have been searching for. She took her time to explain clear and concisely all I needed to succeed at the interview stage. Thanks again Sophie!

O. Oladejo, Candidate

Wanted to say a huge thank you to Simon Bonner who has just helped me secure my new role. He was one of the most professional recruiters I have ever worked with he was supportive really quick at replying and really put me at ease.

J. Marcinkiewicz, Candidate

I had a very good experience with Aaron Wallis. The company itself is offering great content for all things related to the hiring process. I definitely recommend.

J. Ostermeier, Candidate

Very good advice and support was given during the course of the interviewing process. Potential job seekers would be well advised to use this company whilst looking for their new career.

R. Speakman, Candidate

Wanted to say a huge thank you to Simon Bonner who has just helped me secure my new role. He was one of the most professional recruiters I have ever worked with.

J. Marcinkiewicz, Candidate

Simon was knowledgeable on his clients history, background and what their requirements were and he worked around time zones, holidays and a pandemic to get the right result.

J. Tooze, Candidate

I had a great experience. Helped me every step of the way to get my new job. Sophie was very polite, kind and helpful!

J. Parnham, Candidate

The staff at Aaron Wallis were fantastic. Throughout the process, they maintained excellent communication and I always knew where I stood.

M. Owusu, Candidate

Darren at Aaron Wallis was really encouraging and helpful. He was very responsive and regularly made phone calls to explain the job opportunities available, and guided me through the application process.

A. Brown, Candidate

Fantastic service, helped me find my ideal job quickly and smoothly. Would highly recommend them.

C. Caine, Candidate

When talking with Simon you felt relaxed cared to help you find a position that suited your needs

D. Pinder, Candidate

The most professional recruitment agency I've ever worked with. Robert Scott was extremely proactive and send me a detailed briefing before each interview, ensuring I was well prepared.

D. Bermant, Candidate

Friendly, proactive, communicative. Overall a really positive experience.

R. Houston, Candidate

George is a fantastic recruitment agent and provides a great service. It was a pleasure I thoroughly recommend George to anyone.

C. Beaugie, Candidate

Perfect from start to finish. Simon deserves a shout out. Best recruiter there is. If you need a job, this guy will get you one. He's like the super man of recruiters. Top man, can't recommend him enough.

M. Crisp, Candidate

Rob was really helpful when I was putting together a presentation for the second stage interview. Overall their communication was great and kept me updated of any progress

J. McGrattan, Candidate

Sophie has been fantastic and always so attentive, highly recommend.

T. Ashbourne, Candidate

For anyone looking for work, I can't recommend Aaron Wallis highly enough.

C. Rockliffe, Candidate

The Recruitment agent I used, Simon, was extremely helpful and really went the extra mile to ensure all of my questions were answered, and that I felt as comfortable and prepared as possible. Very professional company and would definitely recommend to others. Thank you Aaron Wallis!

A. Callaby, Candidate

Excellent service, very professional and friendly, would and have, recommended Aaron Wallis.

E. Heley, Candidate

The detail put into the preparation for interviews and the detail of the job description was first class. Rob and Simon in particular are amongst the best I've ever dealt with.

K. Peacock, Candidate

I can honestly say that the time and expertise you gave me was way beyond any other recruitment consultant I dealt with. You are a rarity in your industry.

S. Akers, Candidate

I had the absolute pleasure of working with George Humphries on finding a placement best suitable for me.

A. Van Der Mescht, Candidate

I would highly recommend Aaron Wallis Recruitment, Darren was extremely helpful and provided me with plenty of advice and support throughout the whole process.

D. Bretherton, Candidate

I have to say using Aaron Wallis Recruitment has been nothing but an absolute pleasure. I've used many agencies over the years as the client and the candidate and its not always been a pleasurable experience!

L. Knowles, Candidate