This is an issue that comes up semi-regularly on assignments that I work on. The cost of hiring a very experienced and proven BD person can be significant. Not necessarily in terms of their basic salary, but in terms of their overall On Target Earnings (OTE), which can be double or more of basic salary.
The ‘problem’ that this sometimes gives hiring organisations is that the BD people (provided of course that they are performing) can be earning more than any other employee – regardless of seniority – and sometimes more than Board members.
Let’s take for example a BDM who is on a basic salary of £60K. They have an annual sales margin target to deliver of £1M in net new business and are paid commission at 10% of GM. So that’s £100K of commission and £60K base salary giving a total of £160K OTE.
At £160K this BDM may be earning more than any other employee in the business. Are they really worth that? I’d say that they are. £1m of margin generated at a cost of £160K is a return of over 600%.
If this is genuine new business that the organisation would not have had without the skill and expertise of the BDM then that represents a fantastic return for the business. It’s not about how much the BDM costs but moreover what return they are providing on that.
The other aspect to this is that in no small part their worth is determined by the scarcity of the skillset. Genuine hunters are a scarce resource, they know what they are worth in terms of what they can deliver for their employers and will command a remuneration package that is in line with this.