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My Top Sales Performers Are Getting Poached! What Can I Do?

Dear Stephen, 

I’m a VP of Sales for a medium-sized contract furniture manufacturer. We have showrooms in New York, Chicago, San Francisco, LA, Dallas, Atlanta, and a handful of other cities. We have a fairly tenured sales team, and we’re considered a good place to work. We’ve always tended to hold onto our top sales performers because our compensation program is very incentive driven. No cap - once our salespeople hit their sales goal, they can make unlimited income.

Suddenly, our top people are being poached left and right. The lucrative compensation we offer is somehow no longer enough to keep people. When we exit-interview people, they tell us they’ve been recruited by our competitors – either by a scoundrel headhunter like yourself or directly – with base salaries at least 20-25% higher than what we are currently paying them.

In these exit interviews, many salespeople openly share that their end-of-year total income will not be competitive with what they can potentially make here. But, for whatever reason, they’re no longer interested in long-term potential; they’re looking for fast cash upfront. What’s going on? Is this a trend in the industry? Why would someone want to make less money at the end of the year for a significant increase in base salary? I don’t get it.

Every exit interview is almost the same feedback, and my boss is going to have my head if I keep losing salespeople. What should we do?


Bleeding Salespeople 

Dear Bloody,

You don’t get it? Have you heard of inflation? Last year the rate of inflation was almost 9%, this year, we’re still roughly at 6%, and the future is uncertain. So, the cost of living is increasing; therefore, it’s common sense that your salaries must go up! Salespeople want more cash in their pocket today – immediately! ASAP! Pronto! - and would rather have that than the mere chance of earning a higher commission later in the year or later in the month!

As you may have read in this space before, if you want to hire and retain the best salespeople, you must raise the base salary! Yesterday!  

There’s something very enticing to an employee about a high base salary! It’s just as crucial for those of you that are losing employees today to be sure that your current employees have been given cost-of-living increases in salary commiserate with the current inflation rate. Every day, clients call me exasperated and always surprised that long-term employees that just made a bundle of money at the end of 2022 have quit them! The first question I ask is: what was their base salary? Not their total income, their base. It’s always lower than it should be. 

Just look at the cost of gas, housing, and groceries! It’s a no-brainer. People’s pockets are hurting right now. 

Manufacturers and dealers alike resent paying employees competitive, higher bases. Don’t ask me why but employers think a higher base makes it seem like employees don’t have to work as hard or will want to… as opposed to an incentive-driven program. Reality checks for the bosses: higher bases are the new normal. So, get used to it if you want to keep your employees.

If you’re worried about your bottom line and should be, simply lower your commission on the other end of the program! Retention of quality employees is today's number one issue in the interior furnishings industry. Salespeople are leaving their jobs, and contrary to popular belief or what you may have seen on the internet, it’s not about the damn bonus; it’s about a high base salary!

Show me a company that pays a high base salary to a salesperson, and I’ll show you one happy salesperson that can’t be recruited, even by a scoundrel like me!