4.4.1 Percentage component of sales manager compensation

The manager profession is one of the most common. Without exaggeration, we can say that no company can or cannot exist without managers. You can work as a manager both in lower positions and in senior positions. One of the main advantages of this profession is the absence of the so-called “ceiling”.

A professional manager has the opportunity to constantly improve his skills, develop professionally and count on salary growth. Many people wonder how much a manager earns. There is no definite answer, since much depends on the field of activity and professional qualities of the employee himself. Let’s try to figure out how much managers earn on average, depending on their field of activity and position.

Manager's responsibilities

First, let’s define who managers are, in what areas they can work, what is included in their responsibilities, and what influences the final salary. The profession itself implies the presence of management functions, a penchant for logical thinking, making forecasts, and working with people. In most cases, the employee is responsible for managing and distributing current tasks among other employees.

However, not all managers are managers. For example, the position of sales manager does not imply managerial functions. The job responsibilities of such an employee include working with clients: both with existing ones and searching for new ones.

A tourism manager is a consultant who works for a travel company. Responsibilities include selecting and arranging tours for clients, consulting on the country, hotels, existing excursion programs, and so on.

A hotel manager is a hotel or hostel employee who is responsible for accommodating guests.

A car sales manager is an employee who advises clients of car dealerships. He helps you choose a car, prepares documents, accepts payments, advises on various loan products, and so on.

HR Manager - recruits new employees for existing vacancies. Posts vacancies on various websites and in recruitment agencies, conducts interviews and surveys of applicants.

A bank manager is a bank employee who advises clients on various banking products. Can process deposits, accept documents for processing loans, issue credit cards, make bank transfers and payments.

Content manager is a new specialty that very often involves remote work. The employee’s responsibilities include working with content for websites or public pages on social networks. Experienced content managers can collaborate directly with copywriters and freelancers on various exchanges, place orders for the creation of texts, check and accept the work done.

A financial manager is an employee of the accounting or financial department of an organization.

A project manager is an employee who is responsible for one or more projects in an organization, distributes tasks, and monitors their implementation.

How much do managers in Russia earn?

All young professionals go through approximately the same path. On average, beginning specialists can expect a salary of 10-20 thousand rubles per month. With increasing experience and skills, over time you can begin to receive a salary of more than 40,000 rubles per month. Experienced sales managers can earn from 100,000 rubles per month or more.

The above salary amounts apply to ordinary employees. If we talk about Top Managers of various companies, they receive salaries of a completely different order. Top managers are usually classified as management personnel. They are directly involved in managing other people, setting and distributing current tasks, monitoring their implementation, and are responsible for the efficiency of the entire organization as a whole.

Therefore, the salaries of Top Managers differ sharply from the salaries of ordinary employees. In large Russian companies, in addition to regular salaries, managers also receive annual bonuses, the size of which directly depends on the effectiveness of their work. A top manager of a large company can receive more than 1 million rubles.

4.4.1 Percentage component of sales manager compensation

There are several models for paying commissions to managers. Managers can receive a commission as a percentage of turnover or profit. It is also possible to organize bonuses for exceeding the sales plan and bonuses to the department for a certain level of sales.

Percentage of turnover

In this compensation system, the manager receives a certain percentage of the turnover from each sale.

When selling services for 100,000 rubles, the manager receives 10% of the turnover, that is, 10,000 rubles.

For example, when selling a website for 500,000 rubles, the manager receives 4% of the turnover, that is, 20,000 rubles.

When selling 50,000 sq. meters of warehouse services for 15,000,000 rubles, the manager receives 0.2% of turnover, that is, 30,000 rubles.

The advantage is that the manager can easily calculate the size of his commission.

The downside is that the manager can conclude deals with high turnover, but without profit for the company. For example, by providing huge discounts. Remember, what you encourage grows. If a manager receives a percentage of turnover, his goal is the maximum transaction amount, not the company’s profit.

Profit percentage

A percentage of profit is a more correct and thoughtful commission option than a percentage of turnover. In the example of selling a website for 500,000 rubles, let’s say that 300,000 goes to the employees, and 200,000 rubles goes to the company that collected them and organized their work. Let's set a profit percentage of 10%. Thus, having sold a site for 500,000 rubles, the manager receives 10% of the 200,000 rubles of profit, that is, 20,000 rubles. If a manager carefully determines the client’s needs and offers additional site functionality that the client needs, he can sell the site for 700,000 rubles. So, he will receive a commission of 40,000 rubles. The company also remains a winner.

On the other hand, if the manager offers a discount and sells the site for 350,000 rubles, then he will earn only 5,000 rubles in commission (10% of the 50,000 rubles of profit for the company). Under a system with a percentage of turnover, with the same total transaction amount, he would have earned 14,000 rubles (4% of the transaction amount of 350,000).

The advantage of this compensation system is that managers are aimed at bringing profit to the company. An insignificant disadvantage is that it is somewhat more difficult for the manager to calculate the size of his commission from each transaction. We recommend using a compensation system where the commission is based on a percentage of profits.

Continuation…

How much do sales managers earn?

The vacancy “sales manager” is one of the most common on job search sites. In most cases, you can get a job as a sales manager without any special education or work experience. However, the main part of the salary is accrued depending on the results of work.

Sales managers, as a rule, receive a very small fixed salary and bonuses from sales. Bonuses can reach 40% of sales volume, but not everyone can organize a large volume. Therefore, organizations are constantly recruiting new employees, as staff turnover remains at a high level. At the end of the probationary period, not all employees remain employed.

A new salesperson's career often begins with cold calling. Many cannot withstand constant refusals and leave disappointed, never achieving great heights in their careers and salaries.

Experienced sales people who are truly experts in their field can earn from 100,000 rubles per month or more. It all depends on the personal qualities of the employee himself, on what services or goods he has to sell, whether he works in the retail or wholesale market, and so on.

What does a top manager's salary consist of?

The total annual income consists of salary, bonus, remuneration for participation in the work of the governing body, commissions. At Gazprom, most of the total amount is made up of salaries (1.2 billion rubles per year in 2016), at Rosneft, Sberbank and Russian Railways - bonuses (2 billion, 2.9 billion and 1.6 billion, respectively) .

In 2020, Rosneft disclosed the mechanism for calculating salaries and bonuses to management by publishing the “Standard on payments and compensation to top managers.” According to this document, the annual salary of the chairman of the board of Rosneft was up to 240 million rubles. as of 2020 (in 2018, Igor Sechin received almost 30% more). The rest of the company's top managers receive 10-50% of the manager's salary.

"Rosneft"

What does the salary depend on?

How much a manager earns depends on many different factors. However, as mentioned above, in most cases, the salary paid out consists of two parts: the basic salary and bonuses (or a percentage of sales).

Unlike other specialties, sales managers have a fixed salary that is very small. On average, it can range from 10,000 to 30,000 rubles per month. Most of the salary comes from sales bonuses. Their size directly depends on the employee’s performance and the sales volume that he was able to organize over the past month. In this way, the employer encourages employees to work harder and work more efficiently, because the size of the final salary depends on the result of work.

In the end, how much a sales manager earns per month will depend on factors such as:

• type of product or service,
• seasonality,
• the quality of the products or services offered,
• price, industry affiliation,
• wholesale or retail.

All these factors together have a significant impact on sales volume and, accordingly, on the final salary. In reality, even those employees who work in the same positions in the same company can receive completely different salaries. How much a manager receives per month largely depends on the qualities of the employee himself: his experience and skills, dedication and activity.

How much can you earn?

Answering this question is not as simple as it might seem at first glance. There are several reasons for this, namely:

• There are no official statistics that would reflect absolutely correct numbers. There is data for the city or region as a whole, but it will be averaged. That is, they took 1 manager with a salary of 10 thousand, added a manager with a salary of 50 thousand and received an average salary of 30 thousand rubles.
• A manager’s salary depends on many factors: place of work, city of residence, terms of the employment contract, fulfillment or non-fulfillment of the sales plan, personal activity, length of service, job status, etc.

If we talk about earnings in general, then it will consist of several components: the basic salary, bonuses for completing assigned tasks (plans), a percentage for direct sales volume or your department as a whole. And here everything depends on the internal policy of the company where you work.

As a rule, the smallest part of your salary will fall on the fixed part, i.e. salary, and the largest - for bonuses and all kinds of bonuses. This is an excellent motivation for a manager, because such a policy encourages people to work more efficiently. You will get exactly as much as you put in the effort.

Unfortunately, this rule does not work in all areas. There are some businesses whose products or services are in seasonal demand. And here, even if you motivate the staff as much as possible, you won’t be able to jump over your head, and at the end of the month you will only receive a “bare” salary.

Average salary of a sales manager

The average salary of an employee depends on the city of residence and the company’s field of activity. In general, in the market, salaries in large cities are 30-70% higher than in the regions. How much do sales managers earn in various cities of Russia, according to the portal hh.ru.

Differences in the income of top managers by industry

Senior managers can hold different positions. Salaries, of course, also vary:

1. Organization of product sales, logistics. According to Trud.com, the director of marketing, purchasing or logistics receives an average of 100 thousand rubles. A casting director and an anti-crisis manager can expect the same salary.
2. Advertising. The advertising director receives about 90 thousand rubles, and the leading manager - 55 thousand rubles.
3. Financial sector and trade. A top bank manager can count on a salary of 50 thousand rubles, a sales manager on average receives 45 thousand rubles.

The international consulting company Korn Ferry found that most Russian companies do not have a clear payroll scheme. In France and Great Britain, employees in the same positions can receive income with a gap of 0.4 times; in Germany and Finland, salaries differ by 0.2 times. In Russia, the difference is influenced by length of service, knowledge of a foreign language, the size of the company and other factors.

How much do tourism managers earn?

With the remuneration of tourism managers, a similar trend has developed. Salaries in Moscow, St. Petersburg and other large cities significantly exceed salaries in the regions. The average salary is 20-30 thousand rubles per month, but the seasonal factor plays a huge role here. In the high season, the salary can reach 50,000-70,000 rubles per month or more, and in the low season it can be as low as 10,000 rubles.

It is quite difficult to say unambiguously in which area it is best to work as a manager. A lot depends on the personal qualities and preferences of each employee. Some will find themselves in sales, while others are more comfortable getting a job in a bank. According to statistics, the largest number of people work in the field of wholesale and retail trade. If you have certain personal qualities and work experience, you can count on a salary much above average.