Would you forgo a steady paycheck for a job you really loved? If you're working on commission, that might not be far from reality.
In FINS' informal online survey, Sign or Decline, 36% of 741 respondents said they'd accept their dream job if they were to be paid solely on commission.
Commission-based pay structures are relatively common, said Brent Longnecker, chief executive of Longnecker and Associates, a Houston, Texas-based compensation consultancy. Positions that require any kind of selling, from straightforward sales positions to executive recruiters and Wall Street's traders, typically have a low base salary; the real draw is the commission-based payout.
A commission-only position without any base salary, however, raises concerns, Longnecker said. Even experienced sellers confident they'd close enough business to earn plenty of money should beware.
Commission only may force salespeople to be more aggressive than they might be about selling a product. "Even when they don't believe the product is good for the customer, they can feel they are being forced to sell it by the company" Longnecker said.
"Ask yourself first, 'How well do I like selling? How well do I handle rejection? How much pressure is going to be on me to close a sale?'," Longnecker said. "If you have reservations after asking yourself these questions, it may be that you're not destined to succeed at it. It could be wise to take time to find something that fits you a little better."
If a company is only paying on commission, that could be a sign it's not financially viable, he said. Instant red flags? Those ads you can spot all over the Internet about people who started working from home and are now making thousands of dollars working for two hours each day.
Nonetheless, given the current state of the job market, an employer paying solely by commission may be worth looking at. "With the type of economy we have today, there are a lot of employers offering what they can, which might only be commission," said Longnecker. It's important to see what kind of investment – if any – the company is willing to make in you to ensure you're prepared to do the job well.
Bottom line, the situation isn't for everyone. When your income is based on how successful you are in selling a product or service, you need to be prepared for the challenges you'll face.
What Would You Do?
Answer the question and see how you match up with the rest of the FINS community.
You've just been offered your dream job, but... you are paid solely on commission.
Write to Kelly Eggers
Sign or Decline is a series of questions on FINS.com that ask what you would do for your dream job. Since its launch late last year, over 100,000 answers have been received and compiled in our database. Participate in Sign or Decline here.