The High Price of Replacing Commission Administrators

by | Aug 3, 2022

Gears work spin together, representing the complexity of using commission spreadsheets

Welcoming a new employee to the company offers any team the chance for a fresh start. When that new employee comes on board to manage commissions, they’ve got a lot of catching up to do. They’ll need support in learning all the rates and commission nuances involved in your plan. Without it, a company may find itself looking for another commission administrator sooner rather than later.

Hiring and replacing commission administrators costs money. It takes time and resources to identify the right candidate then bring them into the company, train them, and retain them. This task becomes a job of its own. If a company finds itself recruiting over and over again, it may need to look for an alternative.

Core Commissions Managed Services subscription offers that alternative. Sure, it too costs money but at the end of the day, it saves money over constant hiring and rehiring. Let’s just take a look at how much is spent on replacing a single employee. We’ve broken down each step and how much it’ll run.

1. Recruitment Costs

When a company sets out to replace an employee, the first step is to employ a recruiter. That might be an internal resource already on hand but that individual typically earns a salary. On average, that recruiter makes about $73,000. The average time it takes to fill a position is 42 days. That’s a little more than a month’s salary going into that single hire. An external recruiter typically earns a percentage of the role’s first-year salary. Overall, this may run between $6,000 and $10,000.

Managed Services offers an alternative to the cycle of recruiting, hiring, and onboarding new commission administrators.

Aside from a recruiter, the company needs to place advertisements to get the job listing in front of potential candidates. On some job boards, this costs around $500 per month. If you post on more than one job board, the cost could double.

Other tasks go along with the recruitment process, including defining the role and writing the job description. The budget needs to be determined so that requires meetings and discussions. These tasks cost time that a busy business often doesn’t have.

2. Hiring Costs

Once candidates are recruited, they need to go through the interview process. That means managers and other employees dedicate a part of their day, week, or month to speaking with a collection of individuals. On average, teams interview six to ten people for a single role, each of them going through one to three rounds of interviews. If each interview is one hour, that’s up to thirty hours spent on a single hire.

If you break it down, a hiring manager that makes the average manager salary of $60,000 in thirty hours of interviews costs $865.40. That doesn’t factor in other employees involved in interviews.

Candidates that enter the final round of hiring often go through background checks and other screening processes. The price of background checks ranges from just $10 to $500.

3. Onboarding Costs

The hiring process is over and that new candidate starts. Now they need training. The average spent on training for a single employee is $1,252. Training for someone managing commissions may require additional bells and whistles not included in your typical instruction.

Aside from training, companies equip new employees with the hardware and software they need to do their job. That includes a computer, business applications (or additional seats on existing systems), and other equipment, like phones. It could come out to about $1,800.

4. Retention Costs

Obviously, an employee won’t stick around without a competitive salary. The average salary for a commission administrator falls around $60,000. Benefits and bonuses factor into that cost as well. But money isn’t the only thing that keeps someone calculating commissions every month.

Additional benefits should be offered. Many companies stock snacks and drinks in a kitchen, and offer comfortable amenities, like fancy desk chairs or nice offices. Employee events and activities keep morale high even during high-stress times.

Ongoing educational opportunities and opportunities for advancement are both motivating elements as well. Making an employee feel valued even outside of their regular responsibilities helps keep them pumped to return to work on Monday.

If you just look at what was spent to hire this one person, it comes out to as much as $15,452. Instead, work with our Managed Services team and save yourself that spend. We replace your commission administrator completely or at least keep them secure in their job.

Contact us to find out what Managed Services can do for your organization. Set up a demo and we’ll walk you through all the benefits and features that make commission management easier.

Related Posts

Sometimes it Takes a Sixth Sense to Calculate Commissions

As Halloween approaches it is all too easy to reflect on terrifying topics: scary movies, public speaking, heights, messing up a handshake, ...

What is On-Target Earnings (OTE), and How Does it Apply to Commissions?

Some commission plans refer to a term called OTE, also known as on-target earnings, or on-track earnings. Different versions of commission plans ...

Why Bother Integrating Commission Software with Payroll

Commission management often happens separately from payroll. It requires a different set of numbers and stats to calculate the correct earnings ...
Share This