It can easily look as though recruiting your own sales team makes far more sense than outsourcing this function at face value. Why pay a premium to outsource sales when it can be done so much cheaper in-house? It’s an excellent question and one that yields a surprising answer.
The actual cost of hiring an inside sales representative is easily overlooked, as there are many factors that businesses can fail to take into consideration.
The average fixed salary of an IT BDM in Dubai is 25000 AED (1USD=3.67 AED), with the variable part coming to 17000 AED/month, as stated in the 2022 Salary guide of Dubai-based recruitment agency AlconMaddox (https://www.alconmaddox.com)
Other employer charges such as medical care and mandatory end-of-service benefits all add up. We can assume that these costs will add another 15% of the sales rep’s base salary to the employer’s outlay, which equals 3750 AED.
Management of the resource is another cost often overlooked. Let’s say the sales manager is looking after six resources in total. It’s fair to allocate 15% of the manager’s salary as an added cost to each salesperson. We can assume your sales manager is earning at least as much as the sales rep (42K AED as base + bonus) and add 15% of that to the total cost (+7140AED)
Technical expenses for a sales representative such as mobile phone, database systems, and software license fees are unavoidable yet often unconsidered costs. We can expect to add around 2000 AED per month for this expense.
We will assume that first sellers will be comfortable working from home, even though their productivity might be impacted. So will not consider cost seats, essential office equipment, and bills for this exercise.
The cost of initial recruitment is anywhere between 12% and 22% of the salary, according to recruitment experts Quarsh. 15% cost of recruitment would add another 6300 AED
The cost of replacement comes into play when your salesperson is either: promoted, poached, or moved on. On average, a salesperson stays in their job for around two years, according to Sales Readiness Group statistics. Another study found that it costs, on average, 16% of the yearly salary to replace an employee. So, if you’re paying 16% of the salesperson’s salary every two years to replace them, you can average that cost out to 8% of the salary per year or another 3360 AED.
The numbers add up to 64450 AED/month, which equals 17588 USD/month or 211K USD per year!
|
Monthly salary |
Bonus | Other benefits (15% of salary) | Managing the resource (15% of manager salary, one for 6 employees) | Technology phone, sales tools, etc. | The cost of initial recruitment | The cost of replacement. |
TOTAL MONTHLY COST |
|
AED25,000 |
AED17,000 | AED3,750 | AED 7,140 | AED2,000 | AED6,300 | AED3,360 |
AED64,550 |
If you’re struggling with inbound demand to keep the sellers busy and not sure how to systematically generate outbound leads, then take these total figures and think again. Is outsourcing lead generation really more expensive than setting up an in-house sales team?
