Self Employed Sales Person?

[Displaycentreuk]

I have done a great deal of browsing around this forum and other relevant places on the Internet but cannot find a clear answer to my question.

I want to employ a sales person on a low basic (say £8000 pa) but with a generous commission structure. But, having taken legal advice, understand that this would be in direct contravention of the Minimum Wage Act. The issue is that the contract of employment needs to guarantee that the sales person would be paid the National Minimum Wage if he fails to earn any commission. In fact I would need to guarantee that he would be paid £6.08 x 37.5 hours = £228/week; approx £12,000 pa.

So I have been advised that the alternative would be for the sales person to be self employed and thus the Minimum Wage Act would not apply. We would then agree a contract for services based upon a monthly retainer and a commission on sales made. But looking at the various guidance on the Internet it would seem that we would fall foul of HMRC because the sales person would only have a single client and work-out of my business premises so that he could use our IT etc. I see no problems as regards the other HMRC tests for employement because the sales person could work when/if they wished and could use soemone else as far as I am concerned - all I want is sales!

I have been talking to someone this week who is keen to work in one of these ways but I just don't know whether it can be done. I don't want to give him a £12,000 basic because I am not convinced that he will be able (even though he is high motivated and extremely positive) to bring-in the necessary sales. But I am quite willing to invest the effort into giving him a chance as long as the onus remain on him to deliver.

Any help would be really appreciated.

Thanks

Chris

 

[Floyd Pink]

If you're not convinced that he will pull in enough business to cover paying him £12,000, then I wouldn't consider him for the £8,000 role either.

 

[arcon5]

Why would you consider employing somebody you have no confidence in from the start? A good sales man should be able to sell his own abilities at the very least!!

As far as self employment is concerned, according to HMRC being self employed isn't an option. If he is seen as an employee and not a contractor you could be seen to be evading your employers NI contributions amongst many other responsibilities. I'm not convinced flexible working alone would be sufficient to class him as self employed.

 

[3 MORE YEARS]

What would his earnings be if he hit his target? Is the target realistic?

Ask yourself this question, if you were a good sales person would you work for this money?

 

[captaincloser]

Salespeople are often talked about as if they are a number not a person and thats fine...

There are so many well paid jobs available to good salespeople(and I mean good) that the only people that would be attracted to this 8 or 12k opportunity will be no hopers and the highly inexperienced.

If you want a red hot commission only salesperson you will need to make them an offer that means they can be the highest paid memeber of the company even above the owner-and this re. Thats what turns people on and every good salesperson will be able to deal with HMRC restrctions and ballyhoo about how many clients have you got etc.
Also I have the feeling nobody will have done this role before ? Nobody has blazed the trail that you want this person to emulate ? Same old same old...
Endless help availabe on here about contracts and legalities...not much on selling though. This forum is more geared to dismissing sales

 

[Displaycentreuk]

Thanks for the responses and I completely understand the comments.

The background to my question is that I employed a sales manager 3 weeks ago on a good basic and uncapped commission structure. He has an impressive record of achievement on his CV, realised the potential in our business straight away and I was convinced by his attitude and enthusiasm.

His target for the first 3 weeks was just to get the young, inexperienced sales team organised and introduce some discipline to make sure that things are done properly. Meanwhile he would gain product knowledge and understand our systems/processes. He agreed that this would be extremely straightforward given his previous experience.

But having worked with him for 3 weeks it is clear to me that he is neither an organiser, leader or comfortable with IT. In fact the 2 lads in the sales team have been organising him and sorting-out his basic mistakes! But what is clear is his determination to 'hunt-out' suitable customers and his ability to build rapport (face to face and on the phone).

When I sat with him at the end of the week he admitted that his management skills were lacking but said that he is convinced that he can bring-in the sales that we are looking for and that our targets are quite modest. The way in which he spoke convinced me that he is passionate about our business and excited about its potential. He finished by saying that ' I am so convinced in this business and my ability to sell that I want you to change my employement to commission only'.

I like the guy and want to give him a second chance but, of course, have doubts because, in light of his CV, the first 3 weeks should have been easy for him to shine. This is why I am attracted to a mechanism that now puts the onus on him to shine rather than leaving it on me to get my moneys worth out of him.

 

[MBE1]

So why not offer a £12kPA basic plus commission, with a three to six month trial?

If you think he is good as a salesperson he would be well worth the money.

 

[patientlady]

Good salespeople really don't like paperwork, always left for Friday afternoons Good sales managers motivate and lead. As said above if he wants to go on commission only then why not. When he is earning, you will be earning too