In the world of sales, there are often no right answers. What would you do in this tough sales situation? Make the call below, and see instantly how your judgment compares. Final results will appear in LBM Journal. Be sure to check back next month for a fresh Tough Call.

Tough Call - The Pay/Benefits Challenge

 It seems everyone on your team wants a different combination of pay and benefits.

Just as the housing downturn has— at the very least—created challenges for many companies, it has also created opportunities for others. As it happened, you had some money socked away for retirement—which happened to be exactly as much as you needed to buy an independent yard that fell victim to the recession. You closed on the purchase in February of this year. In the months since, you’ve found great people to build a team around, and you’ve all been working diligently to leverage the positives of the former yard—while making necessary changes to the lineup of product and service offerings.

Six months into your new venture, and while you’re not setting any revenue records, your sales are trending the right direction, and the experienced sales team is doing a solid job rebuilding old relationships and creating new ones. Naturally, there have been challenges. Some expected, others out of the blue. You knew from experience that pay and benefits were potentially sticky issues. As a first-time owner, you’re finding out just how sticky. Here’s the situation:

Since your market was especially hardhit by the housing downturn, between yards going out of business and others laying people off to trim expenses, you had a healthy pool of talent to choose from. As a result, many of the people you ended up hiring worked for different companies. And, as you’ve just discovered, this is causing some serious friction among your team. Some examples include:

 • Joe was the top salesman at the appropriately named OOB Lumber. As the number one producer, he was paid a combination of a healthy salary plus commission based on gross sales, and a full slate of benefits (including 100% company paid, low-deductible health insurance for him, his wife and their three kids). He told a buildercustomer that he feels you’re underpaying him—even making him pay part of his insurance premium and the entire premiums for his family!

• Phil earned a straight salary at his former yard, and though he told you that he’d welcome the opportunity to grow his income via sales commissions he’s grumbling to other staffers about how much less he’s earning now. The rumor is that he’s actively shopping his resume.

• Alan, a go-getter who’s doing great things from his inside sales position but, like the other inside sales people, his pay is based primarily on salary— with limited commissions. He’s made no secret of the fact that he wants the same commission earning opportunity as the outside reps. Beth, the other inside salesperson, is fine with the pay structure. Instead of the opportunity to earn more, she’d like the company to step up the quality of the health and dental insurance offerings.

When this discontent first came to your attention, you were surprised and disappointed. After all, you’d worked hard to devise pay/benefits packages that you viewed as fair, with what you considered a healthy balance of risk (commission) and safety (salary). You’d really like to keep your team in place, and you’re willing to be flexible if it’ll make for a happy team, but the level of flexibility required to make everyone happy is unlikely. What would you do?

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