Business development manager rate

[Smithk]

Hi. We are looking to get a BDM for our recruitment company and wanted to find out if the following rates are fair:
£45k base salary with commission based on:
- up to £50k business they get 3% commission
-From 50k they get 5% commission

does this seem fair? Thanks

 

[AstEver]

Do you mean a sales manager?

 

[Smithk]

Do you mean a sales manager?

Hi reason for going with a BDM was to have someone who can bring in new business/clients every month

 

[AllUpHere]

How much new business do you need? Without knowing that, it's impossibe to tell. There's no point recruiting someone on those terms if you only need a few hundred grands worth of extra business a year.

 

[Deleted member 335660]

Hi. We are looking to get a BDM for our recruitment company and wanted to find out if the following rates are fair:
£45k base salary with commission based on:
- up to £50k business they get 3% commission
-From 50k they get 5% commission

does this seem fair? Thanks

Firstly you need to be careful how you dress up this position.

A good BDM will think you want them to develop your business and will get frustrated if it’s just about increasing current sales. Also there are more skills required in real BDM so this pay may be appropriate.

If you just want a Sales Person then say so and this rate may be excessive.

Also I sold computer systems back in the 70-90 and we got salaries above the norm. I understand recruitment is a challenging market.

Either way some Google or LinkedIn research will indicate what the market rates are for recruitment industry sales and BDM people.)

In my 30 years of sales I expected to get 50% of my base salary as commission for getting my target. You will undoubtedly pay more for someone with a good track record in sales. So you might have a band of salaries based on record.

 

[fisicx]

Am I being a bit thick here? How much is each new client worth to you? Are they recruiting businesses or people looking for work.

Suppose a new client earns you £1000 and only stays for 6 months. Your BDM will need to find at least 45 new business every year to just break even.

Or you could just improve your current marketing and just be more efficient. Get more bang for your buck rather than splurge more bucks.

 

[Smithk]

Firstly you need to be careful how you dress up this position.

A good BDM will think you want them to develop your business and will get frustrated if it’s just about increasing current sales. Also there are more skills required in real BDM so this pay may be appropriate.

If you just want a Sales Person then say so and this rate may be excessive.

Also I sold computer systems back in the 70-90 and we got salaries above the norm. I understand recruitment is a challenging market.

Either way some Google or LinkedIn research will indicate what the market rates are for recruitment industry sales and BDM people.)

In my 30 years of sales I expected to get 50% of my base salary as commission for getting my target. You will undoubtedly pay more for someone with a good track record in sales. So you might have a band of salaries based on record.

Thank you for response. If it’s just about new business at this stage, would you say it’s better to get a BDM or sales person?

 

[Smithk]

Am I being a bit thick here? How much is each new client worth to you? Are they recruiting businesses or people looking for work.

Suppose a new client earns you £1000 and only stays for 6 months. Your BDM will need to find at least 45 new business every year to just break even.

Or you could just improve your current marketing and just be more efficient. Get more bang for your buck rather than splurge more bucks.

Since our model is mainly just for permanent IT positions that are paying from £50k a year. We are looking to charge them 15% of the annual salary. Of that 15% we would offer the BDM 1.5%. But from the other responses we are trying to see whether a BDM or sales person would be better for new business

 

[AllUpHere]

Thank you for response. If it’s just about new business at this stage, would you say it’s better to get a BDM or sales person?

Have you exhausted all the strategic marketing avenues? As @fisicx said, you should get much better results for money spent than you will with business development or sales.

 

[Smithk]

Have you exhausted all the strategic marketing avenues? As @fisicx said, you should get much better results for money spent than you will with business development or sales.

Interesting idea. I will start off with LinkedIn and cold calls and see where it gets us

 

[AllUpHere]

Interesting idea. I will start off with LinkedIn and cold calls and see where it gets us

Haha. When they don't work, try some marketing.

 

[Fagin2021]

I dislike the job description ‘Business Development Manager’ – it’s too imprecise and difficult to measure. If you Google ‘what is a BDM ?’ you get a raft of different definitions and job descriptions like ‘developing a network of client contacts’ or ‘seeking out new market segments’. You need to be really clear about what you expect from a BDM before you employ someone to fill that role.

Sales is different. You can say precisely what you expect (targets) and precisely whether or not your expectations have been met (performance against target).

In the sales role I’ve always wondered why companies offer a basic salary plus commission on the first sale. Depending on the sector you can often double a salesperson’s salary as a cost to the company (NI, car or allowance, pension, medical, recruitment fees, training, support services, other benefits) so (for example), taking on an employee with a basic salary of £40K may cost the company £80K. Then, (depending on your margins), you might need to double that £80K in revenue for the salesperson just to break even. So, before the salesperson has brought in £160K in revenue, he or she is just a cost. It takes time to build up a sales pipeline and it could be 3 to 6 months or more before that person even brings in one sale – yet he/she gets commission on the very first sale? It doesn’t make sense.

My preference would be to pay no commission until that £160K minimum is reached and then a higher sliding scale rate of commission on subsequent sales. In short, reward performance and over-performance.

As @fisicx and @AllUpHere have pointed out, you can get an awful lot of marketing for the cost of a BDM/Salesperson.

 

[NickGrogan]

Since our model is mainly just for permanent IT positions that are paying from £50k a year. We are looking to charge them 15% of the annual salary. Of that 15% we would offer the BDM 1.5%. But from the other responses we are trying to see whether a BDM or sales person would be better for new business

Why are you charging low rates for difficult to fill positions?

You want to pay the BDM 1.5% of the 15%? £50k salary - £7,500 - BDM gets £112.50?

Who is actually filling the role, and what do they get?

 

[Paul Carmen]

As @Fagin2021 says, this may not be a great fit for a BDM role. unless you have carried out research and identified this as the best answer to your marketing plan; e.g. it's really about business development?

A quick look at your website, assuming its for the business you list in your details, suggests you need a marketing plan to generate leads, that you then sign up. That could involve hiring someone to drive leads and sales, but it may not. Is contacting people on LinkedIn or cold calls going to be cost effective and convert well, or just annoy potential customers?

This should be part of a considered research driven plan to drive leads via your website and maybe a sales team. Do you know enough about your target audience and competitors to do this; can you answer:

• is this primarily a B2C offering, or do you need B2B ties with other companies/organisations?
• where your potential customers search?
• do you know what they actually search for?
• why would they choose you?
• how are they likely to contact you, website, phone, email etc, or do you need to contact them?
• if its online, do you know how to construct landing pages that convert?
• to make sure you know what marketing is working, and if any sales people (BDM) are delivering, do you know how to track form, phone and email leads properly?

This type of analysis should help you work out who to target, how to do it and whether its marketing campaigns, a sales team, or a BDM you're looking for.

 

[AllUpHere]

You certainly don't want to employ someone in a business development role to start contacting people on LinkedIn. The main reason business development has no respect these days is due to the people on LinkedIn with Business development in their job title.

Has anyone ever been contacted by anyone on LinkedIn claiming to be in business development who wasn't a complete knob head?

 

[Paul Kelly ICHYB]

But from the other responses we are trying to see whether a BDM or sales person would be better for new business

In my experience, they are ultimately the same thing, but, where businesses have used a BDM, they have also had a sales person to manage the account after the BDM brings them in!

 

[IanSuth]

Since our model is mainly just for permanent IT positions that are paying from £50k a year. We are looking to charge them 15% of the annual salary. Of that 15% we would offer the BDM 1.5%. But from the other responses we are trying to see whether a BDM or sales person would be better for new business

The issue in perm IT recruitment (did it for over 25 years) is not finding clients it is finding serviceable clients

As in anyone can get a job instruction off a company paying under the odds salary wise and so you just end up another agency in a long list chasing the impossible.

What behaviour are you trying to reward - getting a new client you don't know, getting onto PSL's, broadening your reach inside existing clients, broadening your geographic/sector spread or becoming a top player in a niche ? Who will decide the charge rates, you, the BDM, the consultants doing the servicing

Decide this first then build a commission structure that rewards the behaviours/results you want, then recruit using that structure openly.

Having seen the utter disaster caused by a new Sales Director parachuted in with no prior relevant experience (came from mass healthcare recruitment and was used to huge multi yr PSL deals not contingent perm IT ) you really need to do this first otherwise i can predict what will happen

High basic bdm will show evidence of x new clients they found and state the consultants/resourcers aren't trying hard enough to fill those roles preferring accounts they already have, the consultants will tell you that the BDM is bringing in poor quality leads and their time is better spent of the clients they know they can service as they are more efficient with companies/positions they know well. You will be left refereeing and may lose existing staff.

 

[IanSuth]

Am I being a bit thick here? How much is each new client worth to you? Are they recruiting businesses or people looking for work.

Suppose a new client earns you £1000 and only stays for 6 months. Your BDM will need to find at least 45 new business every year to just break even.

Or you could just improve your current marketing and just be more efficient. Get more bang for your buck rather than splurge more bucks.

What happens in recruitment broadly is

The agency tries to find companies who will give them an instruction to find certain staff, for that there is a fee based on starting salary ( usually 15-25% but could be a fixed fee), the majority of the time it is on a contingent basis with no fee unless someone starts in the role (and there is a refund period).

When the agency has the job instruction (and fees agreed) they will trawl through their register of known candidates who have registerred with the agency for work and also advertise via various means both to attract candidates for the role in question (selling the job to prospective applicants) and for their database (it is illegal to advertise non existent jobs). They will also go through online databases which are attached to most of the jobsites to try and find suitable applicants. They then contact the applicant and try and sell the job to them before sending their CV to the end user company (this usually needs modifying/adjusting as applicants are not CV writing experts), they then try and sell that candidates skills to the client to persuade them to interview and then offer the applicant, they then have to handle all the negotiation also dealing with counter offers (from existing employer or other agencies/employers). Unless they find the best applicant and that person is interested and the client don't change/remove the job there is no invoicing just costs

Some agencies split the role up with different sales people selling the agency to client (BDM), trawling for applicants (resourcing) and dealing with the interviews/offers (consultants) and some look for what they call a 260 consultant which means they do it all (which i always found better as a single person having oversight leads to better results for the client)

Every invoice is the result of having sold at least twice - once to the client and once to the candidate. So if you split the role you have to decide how to create an equitable split of commission to reward who created the profit

 

[fisicx]

That’s just BAU. Not really a lot of business development going on. And judging by the junk I get, they seem to email anyone with even a vague connection to the role no matter how unsuitable. Today I was offered a Spanish speaking role, not a skill I have mentioned anywhere.

 

[IanSuth]

That’s just BAU. Not really a lot of business development going on. And judging by the junk I get, they seem to email anyone with even a vague connection to the role no matter how unsuitable. Today I was offered a Spanish speaking role, not a skill I have mentioned anywhere.

That is agencies using lowly paid resourcers and targeting them that they must find x candidates to put in front of the consultant. A pointless target as i would rather have had 3 good people than 2 good and 8 poor to consider. Hence why where i was everyone wrote their own ads, did their own resourcing and did their own talking to clients (they then got their own commission) - we did of course help each other out, if a new job came in we knew would have gone a few agencies and for which there would be few decent people we would all jump on a database each to find the 1 or 2 good people out there before competition, but after that initial splurge it was up to the consultant dealing to handle it all - we had team bonuses as well to foster that willingness to muck in together

 

[Red Wood]

Semantics of the role title aside, the offer would be inline with a suitable person with experience in said industry as BDM or SM.

For us (a small employer) sales roles are key, although I do agree with points above about marketing etc. Somone with a 'black book' could almost tell us what their salary would be, but that would be benchmarked against the figures they projected they would bring in.

You can always knock them on the head for underperformance.

Kudos for you being in recruitment though. Brutal industry.