blog

Thinking About Sales Compensation? Listen to Science for 18 Minutes

by Mike Ma

For anyone redesigning a wholesaler compensation plan right now, I strongly suggest spending 18 minutes listening to this TED talk by my BFF, Dan Pink. The crux of this talk is powerful, "There is a mismatch between what science knows and what business does." If you make it through the video, please read on.

There are a couple of conclusions revelant to our undustry that can be drawn from this talk. Given that you are still reading, I am going to set aside the possibility that you don't believe in any of this social science and think that its garbage. With that assumption made, I'll go on to say that we are either admittedly behind the curve as an industry, or that we think wholesaling is not a "Candle Problem," but rather has a "simple set of rules, and a clear destination to go to." I think most sales managers would argue that their team is highly trained in consultative selling and in building empathic, deep relationships with advisors. Neither of these skills is like building widgets, so why are we paying for them as though they are?

I have engaged in many conversations regarding compenation in recent weeks, and have concluded that if we really want to move the dial, we need to change our focus. With the exception of bigger carrots and sharper sticks, what in our compensatoin plans is upping the level of employee engagement? How are we motivating our team to become masterful in the art of helping advisors through rough times? I think we should pay wholesalers enough and competitively. I would further argue that they should be paid handsomely for their work, sacrifice, and contributions. However, we are looking at the wrong dial on the dashboard to determine how we motivate our team. If we can't pay on Autonomy, Mastery, and Purpose (Pink's big three), we can at least move closer by paying for activities and net-like components that meet the wholesaler halfway between gross sales and the HR nirvana that Pink describes.

We don't have to get all the way there, but moving a little closer to what science knows would be wise for management now. Given where the labor market is today, when are we ever going to make a move to a better place for our industry if not now?