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What is a sales compensation analyst?

A Sales Compensation Analyst is responsible for executing and analyzing an organization’s sales incentive program.

Depending on the organization, a sales compensation analysts are also known as:

  • sales compensation analysts
  • sales compensation administrators
  • sales compensation associates
  • sales commission analysts
  • sales commission administrators
  • incentive associates
  • sales incentive analysts

Sales compensation analysts are rarely found in organizations smaller than 1,000 employees because this responsibility would be owned by a more general HR, Finance, or Sales Ops administrator.

As organizations scale and become more complex, the sales compensation program becomes increasingly more difficult to manage, and the need for a dedicated compensation specialist arises. Large organizations often employ a team of compensation analysts to administer their incentive plans.

What does a sales compensation analyst do?

Sales compensation analysts have a variety of administrative responsibilities that include supporting sales commission plan implementation, maintaining commission records and the Incentive Compensation Management (ICM) Software, validating monthly payments, data management, analysis and reporting. They also actively handle daily incoming inquiries and commission disputes from the sales team.

What is Sales Compensation Management?

Sales Compensation Analysts vs Compensation Professionals.

Sales compensation analysts design and administer the sales incentive program.

Compensation specialists or professionals ensure the company’s broader compensation strategies align with its business objectives, culture, and pay philosophy.

Compensation professionals calculate overall employee pay, maintain databases about how much people make in different roles to ensure equity, and produce job descriptions that reflect the skillset and pay ranges for new hires or promotions.

They will also benchmark compensation rates to keep on-target-earnings (OTE) competitive, coordinate performance reviews and manage separation packages.

3 Key Oblectives of a Sales Compensation Plan

Compensation professionals and sales compensation analysts’ career paths often become more similar, taking on a more strategic role in aligning overall performance and company goals with pay.

Is sales compensation a good field to work in?

Sales compensation is — at least on paper — a great field to work in. The job market for compensation specialists has recently grown as companies are pressured to comply with corporate governance regulations and increasing demand for accurate performance data.

Due to the nature of their work, compensation professionals who are exposed spend more time with senior management than other mid-level professionals, which can translate into more prestige and visibility.

The performance of the business is directly related to their work, and that’s a big benefit for a sales compensation analyst’s career prospects. It also means that sales compensation analysts are often paid more than HR or Administrative professionals but also have higher work burdens.

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What do sales compensation analysts make?

Salary.com says the average entry salary for a Sales Compensation Analyst in the US is $61,390 but ranges between $66,890 and $55,290.

Salary ranges can vary widely depending on education, certifications, responsibility level, additional skills, experience and tenure.

Senior sales compensation analysts and managers regularly make more than $100,000.

Very experienced sales compensation consultants and function directors can make significantly more, between $200-$500 an hour.

The Hard Truth About Sales Compensation Analyst Jobs

While all the above makes sales compensation analyst jobs seem appealing, the truth is that they can be very challenging and demanding roles.

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There are many data entry and basic administrative tasks, clunky and confusing software, and an endless stream of commission disputes and queries to manage, often from disgruntled salespeople.

Worst of all, despite the often silently Herculean effort that sales comp admins expend getting to payroll on time, they rarely — if ever — get thanked.

“A Nightmare:” The Payroll Treadmill

In a revealing interview for Hubspot and the Cornerstone Software Blog, a sales compensation analyst reveals what life is really like for a sales comp admin.

“Commissions that are not system-generated are a nightmare…I first had to pull the data from our sales transaction system and export it into a massive spreadsheet (about 6,000 lines per month). Then I had to sort through it, and create a spreadsheet for every employee who was commissioned.

The break-out alone was tedious — having to make sure sheets were formatted correctly, and ensuring all the sales data was complete. Plus, I had to manually enter write-offs and pull out non-commissionable sales under a certain gross margin.

10 Confessions of a Sales Compensation Analyst

And the Quality Assurance process? “A spot check.”

That process typically takes up most of the sales compensation team’s time, with the rest spent handling regular disputes, rectifying errors, and processing approvals. And when they’re finished, it’s time to start compiling data.

So much time is spent on relatively low-value task-work that there is little time for the sales compensation function to perform their higher-value, strategic work: the continuing improvement of sales incentive plans. We call it the payroll treadmill.

Divided Responsibility = Elusive Impact

Even Incentive Compensation Management (ICM) software doesn’t fully solve the problem.

A single business unit rarely owns sales compensation design and admin. While sales comp professionals are responsible for the daily management of sales comp processing, they are often secondary in incentive plan design.

Incentive plan design is often managed by a committee comprised of Sales, Finance, HR, Exec, and Ops leaders.

No other function in an organization has to deal with that much complexity and has such a large impact on revenue as Sales Compensation. #salescompensation #sales Click To Tweet

The role of sales compensation analysts is to produce the data to guide the planning (on top of their daily tasks) and explain to the planning committee how changes to the plan will impact the business.

Sales compensation planning is often a painful process spanning months, as the stakeholders accumulate what data they can and negotiate their priorities into the plan.

That delayed process means planning begins with two or three-quarters of the data at best and must be adjusted later in the year as a complete picture of performance forms. The lack of ownership and reliable data results in sub-optimal plan design, damaging business performance.

When the plan is finally sent over to Sales Compensation admins, it will frequently be sent back for revision because the design committee didn’t consider the limitations of their ICM software or the impact on the program logic during design.

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Even when implementing the plan is possible, doing so will involve either a significant overhaul or a complete rebuild of the logic guiding the automation, adding another burden to the sales compensation team’s load.

No other team in a company deals with that much complexity and has that big of an impact on revenue.

Elevating the Sale Compensation Analyst

Our founder, Nabeil Alazzam, took on the role of sales compensation analyst while working at ZS and experienced this for himself, which led to Forma.ai’s founding.

Frustrated with the existing sales comp automation software’s inflexibility and the broken promises of vendors, he proposed an entirely new approach to sales performance management.

Forma.ai’s Approach

The first stage is to unify all sales compensation processes into one highly-flexible system. All commission rules become pre-built templates leveraged collectively by all Forma.ai customers.

Traditional ICM doesn’t allow for easy scenario modeling, meaning sales comp teams resort to calculating a handful of outcomes in Excel.

Forma.ai was built as a simulation engine so unlimited models could be run to evaluate the impact and merged into the plan seamlessly.

That combination eliminates the manual, repetitive task work required to manage most sales compensation software, elevating the sales compensation team to a strategic, high-value role.

In the words of one of our customers, Dr. Robert Bieshaar at Autodesk,

“The value of the conversations the sales compensation team is having across the business is now several times higher.”

Dr. Robert Bieshaar, Director of Global Incentive Compensation

We own the repetitive work. Your team owns the most important part of sales compensation — providing business context, strategy, and approvals.

Book a demo here to learn how Forma.ai makes sales compensation more valuable to your business.

If you’re interested in learning more about working as an Incentive Compensation Associate, check out our careers page here.

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