How Do You Set Compensation for Early Sales Roles?
You set compensation for early sales roles by benchmarking against current regional market data and adjusting for the factors that move pay — experience, responsibility, local labor costs, and average deal size — while accepting that a premium is needed to win candidates already in the role. Pay rises as each of those factors rises.
For SDRs, compensation is typically structured as a base salary plus on-target earnings (OTE) that includes variable pay for hitting targets. Higher-growth companies and more experienced representatives command higher OTE. But these are reference points, not fixed numbers — each regional market varies, and the market for sales talent is competitive.
Two practical principles keep compensation realistic:
- Match the local market. Labor costs and competitive intensity differ sharply by region, so benchmark against the specific market you're hiring in, not a national average. Choosing a cost-effective region for recruiting is itself a lever on total cost.
- Pay a premium for passive candidates. The strongest candidates are often already employed in similar roles. Recruiting them away requires paying above their current package — supply and demand sets the price.
Compensation also can't be separated from the rest of the offer. Because pay is only one of several things candidates weigh, a competitive but not category-leading salary can still win when paired with strong career paths, good management, and a compelling work environment.
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