13 Mar What is new in the world of Freight Broker Compensation?
On April 8, 2018, I will lead the pre-conference seminar at the TIA conference on Organization Structure and Compensation Models for the sixth year, so some of you out there must be wondering…what could she possibly talk about that is NEW? While I won’t give away ALL of the details, there are definitely some new trends emerging in 2018 that are in contrast to what I have seen in years prior.
Topic 1: More of the “big brokers” (> 500 employees) are looking for ways to keep compensation costs in line with the market and create a balance between what the high-end sales reps are earning and what the various support and leadership roles are making. There is considerably more attention being given to what strategies are needed to attract and retain the plethora of people that support those high-end salespeople – whether they be account managers, carrier sales, customer support, order entry, track and trace, carrier development or any combination thereof. Companies are coming to the realization that it really does “take a village” and that a healthy organization has a bit more balance between the compensation approaches for the various roles. It’s not that sales reps shouldn’t make A LOT of money –they should – if they are doing what you want them to do (which more often than not, they aren’t), but it should be balanced. They should be rewarded highly for hunting, and for landing new shippers, and really growing existing business…not just riding the capacity crunch margin wave to the top of the US tax structure.
Topic 2: What do we do in a nearly full employment economy? Nearly everyone who wants a job has one, so where is the new talent going to come from and how can we keep it from just being a money game. In addition to talking about this during the pre-conference session, I will lead a panel on Wednesday afternoon with some of the most capable leaders in the industry (Matt Ziegler from ZMac and Amy Noyes from J.H. Rose) who will also share their ideas on how to shift from having a “compensation strategy” to a “total rewards strategy” that will look at factors beyond compensation which can make one employer more attractive than another. Things like paid time off, benefits, work-life balance, career advancement, and training will all be looked at as cost-effective alternatives to just throwing money at people (which of course, you can’t undo easily once you’ve done it, and there may come a time when you wish you could).
Topic 3: The psychology of compensation. I talk about this a lot, so it’s really nothing new, but it’s come into clearer focus for me this past year. Different people really do need different reward mechanisms. Some really do value and respond to annual base salary increases. Telling them they can’t have that, and instead they just need to sell more, feels like being told they can never eat ice cream again and if they are hungry they should just have another hamburger. Yes, hamburgers can be great, but sometimes we all need a little ice cream too! Likewise, titles, career progression, and additional responsibility can be the nourishment which is craved by other members of your staff. Don’t deprive them of it…figure out how to provide a buffet of compensation options so each person can find something that suits their tastes.
I may think of more topics between now and April 8, but these three right here will provide lots of great fodder for discussion. One of the best things about this session is the sharing and “war stories” that each of the attendees bring. I see so much relief in their eyes when they realize they are not alone in their struggles. If you’ve not signed up yet, consider it…and if you did the session a few years ago, it may be time to come back for a refresher. There are always new things happening in the dynamic world of Freight Broker Compensation.
See you in Palm Springs!