The only way I’m aware of to make sure sales is a variable expense is to use external sales agents, distributors, or channel partners. If a business hires dedicated direct sales people, they will only be retained if they earn their market value, or close to it. So while the variable portion of sales compensation will rise and fall with sales to some extent, there is a limit to how much it can practically vary. In the long run of course, the sales team can be increased or decreased in size to match business needs, just as any other functional area can hire or terminate employees based on the needs of the business.
Donya Rose, CSCP, is Managing Principal of The Cygnal Group. She is a recognized expert in sales compensation plan design, regularly speaking at conferences and writing published articles. She serves clients from F500 to growth-stage businesses, and advises WorldatWork on sales compensation hot topics and best practices.