07 Jan KPIs driving bonus structures
7 January 2019
With the role of business development (BD) shifting to become more sales-focused, bonus structures surrounding Key Performance Indicators (KPIs) are also becoming more prevalent. This aligns with the trend of firms hiring talent from outside the profession.
As more and more experts from IT, telecommunications, healthcare and financial services enter professional services, the expectation of measurable and realistic KPIs are introduced. This ‘at risk’ component to an overall salary package creates a strong incentive for candidates and offers employers greater confidence in output.
KPIs in action
In the case of a Client Relationship Manager (CRM), for example, revenue can be directly attributed to the activities, initiatives and wins brought in by this CRM, whether this is growing the account via cross-selling, winning a significant pursuit, or having more valuable and insightful conversations with key decision makers.
- Direct bottom line
- Pitch wins
- Number of client meetings
- Increased number of touchpoints
- Type of work won.
A sophisticated client management system, such as Salesforce or OnePlace, is vital to track this information.
Some firms offer up to 30% bonus, with law firms offering 10-15%. Be aware though that not all firms have a bonus structure in place and some professionals never see a bonus. Where bonus structures exist, it is important for candidates to understand the rules by which bonuses are paid, because each firm has a different bonus scheme. It is, however, easy to see why candidates are increasingly looking at bonus structures when reviewing job offers.
Drivers of change
- Increased intra-industry movement sees candidates from bonus-driven industries moving into professional services.
- Attractive bonus incentives offered by alternative legal service providers are garnering attention.
- Increased availability of sign-on bonuses is attracting candidates without upsetting salary banding levels, especially at manager level where competition is fierce.
- Personal KPIs are being aligned more closely to revenue generation as partner expectations increase and the role of BD becomes more strategic.
- Increased sophistication and collaboration across internal systems to track pertinent information (e.g. lead generation, referral, source, revenue and pitch statistics).
Intrigued by the bonus structure and want to know more? Contact Dalton Handley for a confidential discussion and expert advice.