Food Shippers, Distributors & Manufacturers Compensation

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Sales Rep Pay

With our expertise in the transportation and logistics space, we have been called on to help with driver pay for several food shippers and distributor companies, along with warehouse worker pay transitions for several others.  We have worked with more than a handful of food and beverage distribution companies as well to revise their driver pay plans, and others to help with changes to their sales compensation plans.  The sales compensation philosophy in this world is changing, with a couple of the major players shifting to salary pay for their IFS (independent food service) sales reps. 

This is a major market shift as traditionally most companies paid these reps on a 100% commission plan based on weekly order value. This has the natural effect of creating a “phantom salary” from regular customers with repeat orders (yes, yes…, every week they could be underbid by a competitor and every week they could lose the order) but the reality is that most reps are making at least $60k to $80k a year (often much more) and it doesn’t fluctuate that much from year to year.  Food service companies are seeing a lack of sufficient new customer acquisition because of this. Meaning they are looking for ways to incentivize their reps to gain more business from new customers while increasing volume with existing customers.  We have helped many major players work through this sticky situation, and we can help you too.

Warehouse Worker Pay

Warehouse worker pay is another beast entirely. A common approach used is step rates or tiers, whereby workers are given hourly rate increases at set intervals. This helps reduce the exceptionally high turnover rates among this workforce. However, Amazon is disrupting this approach (as it is disrupting everything else) by coming into markets and offering the highest hourly rates).  This makes it hard for companies with a traditional step rate plan (which may start below $15/hour but ends far above it) to get the people in the door in the first place – even when they demonstrate a much higher rate after a year or two on the job. 

EXPLOSIVE GROWTH

This industry is dealing with explosive growth, with mergers and acquisitions creating the need for reconciliation of disparate plans. Former competitor DCs in the same town are now the same company and can no longer attract employees from each other. We have helped reconcile and simplify step rates for companies with over 150 DCs across the United States using 2 vastly different business models and 3 different step rate schemes. It took two years, but management was elated with the results.

Food Manufacturers

We have worked with several upstream food manufacturers to revise their sales compensation plans, from spice and soy ingredient producers to one of the major poultry providers. We understand the direct sales roles as well as channel sales roles that can exist in these worlds, and the need for different sale compensation plans when the buyer is a major provider such as a hospital or university. 

INTERNATIONAL MARKETS & FORECASTING

We have experience dealing with bi-product or overproduction sales to international markets. Lead times for production, when talking about growing living animals, gives “forecast accuracy” a whole new level of meaning. This is especially true as a compensation metric since you can’t just “make another chicken” in a few days.

EXPRESS PROJECT 

When your needs span several roles, but you have only a few people, our Express Project is your best bet. We’ll spend time with you and your senior leaders understanding your business and working alongside you to develop the plans as quickly as possible. We’ve successfully executed hundreds engagements for small to medium-sized organizations just like yours (typically 5 to 50 employees). 

An Express Incentive Project includes: 
• Strategy and structure assessment  
• Compensation design for up to 5 roles 
• Includes salary bands and incentives 
• Market benchmarking of pay levels for those roles 
• Plan documentation 
• Pro-forma economic modeling (minimal historical testing) 
• Roll-out guidance 
• Development of an incentive calculator via Excel
• Additional automation possible
• 3 months of post-project support 
• Project turnaround is approximately 4-6 weeks

1P1P PROJECT: ONE PERSON, ONE PLAN 

A 1P1P Project is great for start-ups and small companies! It is our smallest project size, but this makes it ideal for those who need a single plan immediately.  

The 1P1P Project includes: 
• All plan design details 
• Basic market pricing 
• Economic testing 
• Incentive plan documentation 
• Outlining of goals and expectations 
• Assessment of business goals and… 
• Assessment of impact of this role on those goals 
• Role clarification 
• Development of an incentive calculator via Excel
• Additional automation possible
• 3 months of post-project support 
• Project turnaround is approximately 2-3 weeks 

FULL-SERVICE COMPENSATION PROJECT 

When you need to clarify your business objectives, streamline your organization structure, improve employee accountabilities, AND want to develop plans for several interconnected roles, a Full-Service Compensation Project does it all! This project features multiple virtual meetings with our developers and your design team and is often selected by medium-sized to larger companies, as well as small companies undergoing major transformations. 

A Full Service Compensation Project includes: 
• Business goal clarification 
• Incentive compensation plan design for all roles in scope
• Salary bands suitable for job postings 
• Development of career levels for highly populated roles 
• Employee change management 
• Extensive pro-forma and historical economic modeling 
• Goal-setting sharpening 
• Market benchmarking of pay levels for all roles in scope 
• Roll-out support and guidance 
• Organization redesign and role change/definition 
• 12 months post-project support  
• Detailed and automated Excel calculator
• Additional automation possible
• Possible introduction to one of our EIM vendor partners 
• With integration assistance into their platform 
• Turnaround time is at least 90 days 
• May vary depending on size and magnitude of change