New job blues

[Shep]

So I thought I had a great new job lined up. I had my final interview yesterday where they were going over how the commissions work. I was told going into the interview that they have a base + commission system. Turns out they really have a draw commission system. So, going in if I don't sell for the first couple months (which they expect will happen in the industry) I will actually owe them for may first three months "base" salary that they paid me upfront.

If I didn't have a wife and child to support I would jump in, but since I'm the only income coming into the home, I don't want to gamble on an industry with 75% turnover. Plus, the wife and I are trying for a 2nd baby. I'm always calculating worse case scenario. Here it is: take the job, don't sell as well as I hope, eat through savings to support ourselves for a few months, insurance not kicking in till month 3, get pregnant, find out I don't like the industry, no savings, no insurance and the wife is pregnant.

I'm all for risk, but I would kick myself if I put our family in that tight of spot. I guess I'm beter off where I am now.

[cgallery]

What would you have been selling?

[Uncle Cracker]

Since you already have a job, then your thinking is probably correct. It would be a whole different kettle of fish if you were unemployed, however, as any job is better than no job...

You might consider leaving the door open with your prospective new job, by telling them about your concerns that the pay system is not what you interpreted their initial offering to be, and not in line with your obligations for your family, but that you would otherwise be very interested in making the move. If you have impressed them and they want you, they might be able to work with you on it.

That said, I don't think I'd want any position where the turnover is 75%...

[Shep]

The position was for an executive level recruiter. Basically, placing high level ceo's and directors. The company would get a large percentage of the placement fee, and I would get a smaller percentage of that.

[cabinetman]

I was told going into the interview that they have a base + commission system. Turns out they really have a draw commission system. So, going in if I don't sell for the first couple months (which they expect will happen in the industry) I will actually owe them for may first three months "base" salary that they paid me upfront.

If you "owe" them back for the base salary, does it come out of future commissions incrementally? Are you sure you understood the "draw" part of the pay system. Some "draws" are a base salary to get you started. During that period, commissions may be different than when on full commission.

Other "draws" may just fill in the gap during a slow period. If you start after 3 months on full commission, and the draw stops, what happens if you don't produce to get a commission? How would the "draws" get reimbursed?
.

[germdoc]

I don't know anything about anything, but...I would at least think about taking a risk here and there. That's the only way to get ahead. The economy is starting to tick up--some people think it will be a vigorous recovery--so the opportunities may be better than you think.

I am changing jobs in July when I move to Omaha. A challenge and an opportunity...

[Shep]

If you "owe" them back for the base salary, does it come out of future commissions incrementally? Are you sure you understood the "draw" part of the pay system. Some "draws" are a base salary to get you started. During that period, commissions may be different than when on full commission.

Other "draws" may just fill in the gap during a slow period. If you start after 3 months on full commission, and the draw stops, what happens if you don't produce to get a commission? How would the "draws" get reimbursed?
.

The draw amount was $2500/month. Any placements that their employees have go to cover the $2500/month draw first, then the extra is paid in extra commissions. The hard part (and this is how they explained it to me) is that it normally take a few months (on average) to get your first placement. If that does happen, then at the end of the quarter you would have a negative balance of $7500, so I would have to "pay" that back with each commission I earn before higher commission get generated. They are basically paying a set commission up front, then I have to pay it back through sales. I'm ok with some of that, but if the position doesn't work out I don't want to be too far in the red. Plus, this would already be a large pay cut to drop to the $2500/mo

[Shep]

I don't know anything about anything, but...I would at least think about taking a risk here and there. That's the only way to get ahead. The economy is starting to tick up--some people think it will be a vigorous recovery--so the opportunities may be better than you think.

I am changing jobs in July when I move to Omaha. A challenge and an opportunity...

Agree upon the risk, but at 75% turnover, draw commission, wife getting pregnant, possible gap/higher premium insurance, I tend to see way more risk and a lot less reward. Who knows, I have not had the final call to see if they are even going to offer me the position. They may make the decision for me.

[crokett]

That last post sounds like you are hoping they make the decision. If that is true, then I think you've already made yours.

[phi1l]

It sounds like this is a high level "head hunter" position.
I think this may be just a bit early in teh economic cycle to be in that business. From what I am seeing the big companies aren't really hiring much just yet... many of the talking heads seem to think jobs will be picking later in the year. Today's numbers didn't help any.

[cgallery]

Agree upon the risk, but at 75% turnover, draw commission, wife getting pregnant, possible gap/higher premium insurance, I tend to see way more risk and a lot less reward. Who knows, I have not had the final call to see if they are even going to offer me the position. They may make the decision for me.

One of my clients is a temp staffing agency. One of the staffers left to work for a commercial insurance outfit as a recruiter. Very similar compensation structure to what you've outlined.

He lasted about six months.

I think your instincts are dead on.

[SARGE..g-47]

Bird in hand worth two in bush.. especially when the bush is dried kindling and there is a brush fire raging all around!

Good luck Shep...

[Ed62]

I've never been in sales, but I heard that 90% of the money made in sales is made by 10% of the sales force.

Ed

[Shep]

Well, they called back and decided that I would be risking too much to come on board. They also stated that I am a very analytical person and they do not fare well with that personality type. I guess we're both on the same page.

[cgallery]

They also stated that I am a very analytical person and they do not fare well with that personality type.

What is this outfit? I'd like to short their stock.