A faster setup, less stress, and lesser liability. While this is only a preview of what an average cost of running a sales team can bring to your business, you might wonder if it is better than having an in-house sales team.
You can add great talent and resource to your business by outsourcing sales. To help you, it is very important to do both sides of the sales team so that you can gain from it and be able to determine whether this is just right for you or not. Having an in-house team has its benefits but also has a pretty hefty budget.
To optimize our study, we have broken this article into six steps which provide each detail regarding hiring a sales team. Additionally, we will also dissect costs in every step. So, ensure you don’t miss any part of this post.
That said, let’s quickly get into the details!
In-House Sales Team Expenses – In a Nutshell
Understanding the True Cost of Hiring and the operating of a sales team
Fact #1: Recruitment Cost
Companies and businesses report a rise in vacancy according to recent reports, which are well-conducted studies on the job market. There’s a potential 7.3% increase that has some negative impacts on pay.
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 recruiting cost be? Remember that the pay you offer new employees must qualify 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 turned out to be a competition for the employees, workers as well as employers. Today, if you want the best talent in your company, your offer needs to portray the market conditions.
Whereas this encompasses salary, you’ve got to consider gym members, holidays, food and travel expenses, etc. Recently, a study was conducted by Glassdoor, which states that the average base salary of an in-house sales representative is around $40,000.
Note: the above is a payment that covers only a sales rep, but senior sales manager can receive $55,861 per month. And each employee will have a base salary amounting to approximately $26,202 in commission.
Then, of course, there are the benefits and allowances, which amount to $1000 for each person. Thus, as we calculate this for each employee, we have a staggering amount of $204710 per annum for each employee. This includes annual salary, commission, and benefits.
Fact #3: Training Expenses
The average days of training for a new sales rep would be 2-4 weeks. For others, it would take up more days than that average days. However, if you train the employees in-house, then you’d have to pay extra fees on your existing staff.
On the other hand, if you are going to hire training and management of the sales team, that will also charge separately. Therefore, to be able to find out the total cost of training per employee will be around $3000 annually.
Fact #4: Operating Expenses
Every employee working in your company or business carries operating or overheating expenses. For example, they will require a laptop, desktop, software, mobiles, furniture, coffee, etc.
So, think of it like this: the more workers work in your office, the more expenses you have to bear in satisfying their needs. You may think that you already have some free space, a coffee machine, extra furniture, etc., which would decrease certain expenses.
But overheating costs do not end here, as you have to pay for your electricity bill, liabilities towards rent, and every other amenity used by your sales team.
The amount of operating expenses on an employee reveals around $5000-$6000 per employee per year.
Is Hiring an Outsourcing Sales Team a Viable Alternative For Your Business?
There are many reasons why a company would want to hire an outsourcing sales team, but it is essential to determine if an outsourcing sales team would indeed be able to deliver what you need, depending on your needs and preferences.
Running any business faces numerous challenges, but of all the tough challenges is managing the costs and expenses that will ensure the company raises enough revenue. So if you are looking for a cost-effective solution, you will not regret hiring an outsourcing sales team for your company.
We just mean that when we say outsourcing sales is the cost-effective option, we do not speak merely of the money you will save for the salaries of an in-house sales team. The outsourcing sales team has the best tools and systems. These are expensive systems.
Approaching them will also give you access to such tools, and outsourcing can also become that one-stop solution for all your sales and marketing needs.
While considering outsourcing sales is a step to creating a big business, it is vital to know when and why you would outsource a sales team. Therefore be sure that you are well-informed about the pros of outsourcing to put out the best in it.