The Sales Rep Hiring Process Demystified

Sales Outsourcing Experts Share Hiring Insights

Although W-2 salaried sales representatives tend to be more reliable and more productive than their 1099 independent contractor counterparts, many companies still opt for the latter, because they are worried about the cost and sheer hassle of hiring on sales representatives as W-2 employees.

When it comes to relative costs, it's true that up-front costs for a 1099 sales force tend to be lower. However, unless your company has a serious cash-flow problem, a W-2 sales force is likely the better choice, since costs tend to even out over time, and the W-2 route typically produces better and more consistent sales results.

Which leaves the hiring process. Really, though, it doesn't have to be so scary, and once you've developed a good hiring process, all you need to do is ensure it's followed. Here are the steps you need to follow to hire on a new sales representative:

Pre-Hiring

These are the steps you need to take with regard to your W-2 representatives BEFORE you hire them. 

Offer Letter

This letter should be standard, so all you need to do is plug in the name of the new employee. It should include relevant information such as the salary, hours to be worked, pay periods (bi-weekly, monthly, etc.) start date, whether the position is exempt from federal overtime laws, and what sort of vacation time and other benefits are included. 

Other useful information to include in an offer letter are the person or position to whom the new employee reports, the work location(s), any company equipment (such as laptops, phone, etc.) to be issued, and what the policies are on its return, and a mention of your confidentiality agreement, if you have one. Typically, an offer letter will also state explicitly that the contract is "at-will," meaning that either your company or the employee can terminate the position at any time for any reason.

Confidentiality Agreement

This is a document that employees sign to agree that they will not divulge proprietary information about your company to outside sources, either during or after their employment with you. Depending on your business, you may also want to include a non-compete agreement, specifying that your employees not work for a different company in the same industry for an agreed-to length of time after terminating employment with your company. Such non-compete agreements are not enforceable in all states, but they still establish expectations, and do reduce the incidence of other companies "poaching" your best sales talent.

Tests and Background Checks

We highly recommend that any employees you hire undergo a drug screening. In addition, as well as calling references provided, it is best to utilize the services of a background check company, which can check whether the potential employee has, among other things, a criminal record or a DMV record. Some background checks also include a credit check. Be aware that by law, you are required to obtain consent from potential hirees before conducting a background check. 

At Hiring

These are the forms your new sales representatives should sit down and sign on their first day of work. 

I-9 form

This is a straightforward document that simply states the person is authorized to work in the United States. Along with filling it out, you need to verify the originals and take photocopies of the new hire's Driver's license and social security card, or other identity/employment authorization documents from the approved list on the form.

W-4 form

This is the form where the new hire self-reports how many exemptions to use when computing tax witholdings for the IRS.

Worker's Compensation Notice

By law you are required to inform your new hires about whether or not your company carries worker's compensation insurance.

Other Optional Forms

You may wish to have your new employees fill out forms to claim benefits for hiring workers from certain targeted groups; these are often location specific, so research what may be available to you in your area.

In addition to the legal forms, this is the time to have your new sales representatives sign any extra forms your company uses, such as an acknowledgement of receipt of policy handbook, consent for video or other surveillance, or specific agreements about wage deductions, performance expectations, commissions and chargebacks, etc.

After Hiring

Once your new sales representatives have filled out all their paperwork and officially become part of the team, there are just a few extra things left to do:

  • Issue company equipment, such as laptops, cell phones, etc.
  • Enter your new sales representatives into your company's payroll system, and provide him or her with a company email, if applicable. 
  • Educate your new sales representatives about insurance and other benefits available to them, and ensure that they sign up within the required window.
  • File a new hire report with your state.

A Possible Alternative

Does this still sound like too much work? If you want someone else to take care of all that paperwork, Netpique sales outsourcing can help. We'll provide you with a complete turn-key sales program, complete with W-2 sales representatives that are employees of sales outsourcing expert, Netpique. No paperwork and no hassle for you.