How Much Does It Cost To Hire An Inside Sales Representative?

Time to hire again? Last inside sales guy didn't work out? Before you tell HR to go find you another inside sales rep, let's take a look at the costs you'll actually incur. 

Assuming that you're looking for an inside sales rep who will follow-up on all inbound leads, and place outbound phone calls every day in order to generate leads for your business, let's say the sales rep you hire will make $40,000/year + commission.

Hiring Costs 

• Posting the job = $50-$500 

• Reviewing and screening applications - 10 hours of labor = $200  

• Phone interviews + scheduling interviews - 10 hours of labor = $200 

• Conducting interviews - 10 hours of labor = $200 

• Job offer, paperwork, orientation - 6 hours of labor (3 for HR, 3 for new hire) = $120 

Training Costs 

• One week of training (no production) = $800 

• One week of lost production from trainer = $800+ 

Overhead 

• Healthcare = $7,500 

• Other benefits = $3,500 

• Equipment costs = $500-$1000 

Conservative total without commission: $53,870

That's just math; don't forget about the management aspects that are harder to quantify: 

• Time invested in management/support = ??? 

• Energy spent = ??? 

• Opportunity cost = ??? 

All these time and resources get invested into a sales rep that may or may not work out. 

What if they don't work out? 

How long do you continue to invest before you sever the relationship? 6 months? A year?  

After that, what happens? You're back to the beginning, starting over with the HR costs and spending energy looking for yet another sales rep. 

What if they exceed all of your expectations? 

Hiring a phone-based inside sales rep may work out really well. If you find that diamond in the rough, they'll set you up for some good sales opportunities. But eventually they'll get wise and either want to get bigger at-bats with higher pay-out potential, or they'll start seeking new opportunities. So you end up promoting them to a customer-facing sales role, or you lose them to someone who will. 

Now what? You're once again back at the beginning, starting over, trying to staff that phone-based role once again. 

Before you make the decision to hire an inside sales rep, consider the benefits of co-sourcing your sales process.