August 14, 2022 | Sales Tips

How to Make Competitive Medical Sales Compensation Packages

It’s hard to find qualified and motivated talent these days.

When new talent is found for any given role, it can be incredibly difficult to keep that talent. This is a phenomenon that is affecting virtually every industry in the wake of the COVID-19 pandemic.

As reported by CNBC, “there were 10.4 million job openings in August [2021] whereas the number of people leaving their jobs (the so-called ‘quits rate’) rose to 4.3 million, the highest level seen on records dating back to Dec. 2000.” The medical sales industry is not immune to this problem.

Finding and keeping top-performing medical sales talent is a must for ensuring consistent performance and results from the sales team. This, in turn, can help fuel steady growth for the company as a whole.

One key tool for attracting and retaining top talent is the compensation package offered by the company.

What Is a Compensation Package?

Different organizations may define the term “compensation package” in slightly different ways, but the gist of it is that a compensation package is a collection of benefits offered to employees as remuneration for the services they render.

The Components of a Compensation Package

Because of how varied compensation packages can be from one organization to the next, it can be a little hard to generalize about them.

That being said, there are a few things that are commonly used when creating a competitive compensation package. These benefits can be divided into two broad categories — direct and indirect employee compensation.

What Is Direct Employee Compensation?

Direct compensation is the portion of a benefits package that provides rewards with a specific cash value. The primary example of this would be the employee’s salary or hourly wage, but it can also include things like:

  • Retirement fund contributions (like 401k matching)
  • Paid time off
  • Performance-based bonus pay
  • Stock options
  • Health insurance
  • Life insurance
  • Travel reimbursement

Basically, if it puts money in an employee’s pocket, it can be classified as direct compensation.

What Is Indirect Employee Compensation?

Indirect compensation is the term for benefits provided to employees that don’t have a direct monetary value.

Some organizations may refer to these as employee “perks” or “benefits” rather than calling them indirect compensation.

Some examples of indirect compensation for medical sales staff include:

  • Free meals
  • Flexible work environment
  • Career development programs
  • Mentoring and education programs
  • Wellness support (gym memberships, health advice, etc.)
  • Company vehicle access

While these benefits may have a monetary value attached, they typically can’t be converted into money for the employee to use.

How to Make a Compensation Package Competitive

Creating a competitive compensation package for your medical/pharmaceutical sales team can be a bit more challenging than you might assume.

Simply packing on as many benefits as possible might help to attract new talent, but that strategy could be cost-prohibitive and hard to justify with investors, CEOs, and other key stakeholders in the organization.

So, it’s important to know how to negotiate compensation packages with employees that are competitive compared to your competitors—yet remain cost-effective for your organization.

Here are a few tips for creating a competitive compensation package without busting your HR budget:

1. Research the Compensation Packages Offered by Your Competitors

First and foremost, it’s important to know what the other players in your market are doing in regards to sales team compensation.

If there is some minimum standard set of benefits that all of your competitors are offering, then you need to be able to exceed that minimum standard in some way.

Think of it from the sales rep’s point of view: if there are two companies offering identical pay and benefits, how do you choose between the two?

Having a positive differentiating factor can make an enormous difference in the prospective new hire’s choice.

2. Don’t Forget about Indirect Compensation

When assembling a benefits package, it can help to leverage so-called indirect benefits as a key differentiator from your competition. The great thing about indirect compensation is that it is often extremely affordable compared to adding more money to a new hire’s salary.

Some indirect benefits can even help to improve employee motivation and performance. The trick is finding the right kinds of indirect compensation to help keep sales reps actively engaged with work.

Offering flexible working hours—basically allowing sales reps to set their own working hours so long as they meet key process and performance goals—can be a major morale booster and selling point for attracting talent.

This may work particularly well if you need part-time sales reps instead of full-time ones.

Even something like your corporate culture could count as an indirect benefit (people are naturally going to be more inclined to work for a company on the “best places to work” list than they would for one entrenched in the “worst places to work” list).

3. Consider Personalizing Compensation Packages to the Sales Rep’s Interests

There are countless articles on the impact of employee motivation on productivity. However, not all employees are motivated by the same things.

Simply paying some employees more money may have diminishing returns past a certain point. So, finding alternative ways to reward and motivate employees can be vital.

For example, if an employee is an avid nature conservation activist, consider setting up a matched donation to the 501(c)(3) organization of the employee’s choice.

This may help the employee feel like continuing to work for your company is helping them make a difference in a cause they really care about. Plus, making charitable donations is good for corporate PR in any case!

Or, maybe an employee has a family and is worried about potential medical costs for their children. Adding a comprehensive family health plan to that employee’s benefits package could be a powerful motivator to keep them working to retain those benefits.

4. Keep Reviewing Your Benefits Packages as Time Goes On

When you’ve finally created your ideal employee compensation package and the new sales reps start trickling in, it might be tempting to call it a day and leave your compensation as-is. This would not be ideal.

The medical and pharmaceutical sales industry is always changing. Just as you might adjust your compensation packages to outpace your competitors, you should assume that your corporate rivals will do the same.

So, it’s important to periodically review your compensation packages to identify key opportunities to improve them or bring them up to par with your competitors.

Medical sales recruitment and employee retention isn’t a sprint—it’s a marathon. This is why it’s important to keep working on compensation packages and other strategies for attracting and retaining talent.

Save Time and Effort with a CSO

Remember, you don’t have to manage your medical sales recruitment on your own! A contract sales organization (CSO) can help you streamline your recruitment by providing part- or full-time medical sales reps who think, act, and work like members of your own internal team.

Discover how you can save time, avoid recruitment headaches, and scale your medical or pharmaceutical sales team more easily than ever with Axxelus!

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