October 20, 2020

Is My Sales Job Offer a Scam?

by Uvaro in Career Progression

You interview for a sales job, and you think you nailed it. The Director of Sales tells you they’ll get back to you in the next couple of days.

The next day, you receive a call.

This is it, the moment you’ve been waiting for:

They offer you the job!

Normally, moments like this are cause for celebration. A new start is exciting. But what if the offer makes you feel uneasy? What if after reviewing the offer letter, you realize the job or the company isn’t all you were hoping for?

Even worse, what if you don’t notice right away? What if you quit your existing job, move to a new city, or make other major life changes?

There are warning signs to watch out for when being offered a sales position. This article highlights some red flags we watch for in the jobs our recruits consider, and that you should be mindful of, too.

Red Flags in Sales Job Offers

A red flag in a job offer simply means that there are things about the offer that don’t make sense, or that aren’t consistent, or that don’t line up with norms, or that don’t meet your expectations.

A red flag doesn’t necessarily mean you should decline the job offer. But it does mean you need to seek clarity, and you need to appreciate the added risk.

Job hunting is about finding fit. It’s important that you understand what you’re getting yourself into before making the decision to accept a new role.

How Do I Know If There’s A Red Flag In My Job Offer?

Usually, if there’s a red flag, it will reveal itself during the hiring process. You might notice right away on the job posting, during conversations and interviews, or when reading any offer letters or onboarding materials.

But sometimes, you can be blinded by your own excitement. So it always makes sense to discuss the role with an impartial advisor who you trust.

Here are some common red flags to be on the lookout for:

Flexible Pay Structure

One of the first things you’re probably thinking about is your pay. But what if the pay structure isn’t clear?

Normally there are two different major components to sales employee compensation: base pay and commission.

Base pay is what you get just for showing up. It’s usually in the form of a time-based rate, like an hourly wage or an annual salary.

Commission pay comes directly from the sales you make. It’s often called a variable incentive. It usually follows a formula based on a rate for each sale (for example, $100 for every new customer), or a percentage of a period-based quota target (for example, if you hit 90% of your financial target in the month, you get 90% of your commission). Commissions may be subject to different accelerators or withholdings. But they’re not directly tied to the hours you put in.

Good sales jobs will normally offer you both base pay and commission, but it’s important to understand your job offer’s exact payment structure.

Your OTE, or On-Target Earnings, is the combination of your base pay plus your expected commission if you meet 100% of your quota. An OTE illustrates the approximate payout you should expect to see if you do well.

Remember—it’s in a sales organization’s interests for their reps to perform well.

If a clear OTE is not provided, that’s a red flag. You should be able to visualize the kind of income you can expect to take home if you perform well.

Vague Job Description

Let’s say you interview for an open position, and you think you know what you’re being hired for. However, when reading your offer letter, you realize the job description doesn’t add up.

Perhaps there’s more or less scope to your position. Or it’s another job function entirely.

Or maybe the position details are so all over the place that it’s impossible to tell what your actual job even is.

It’s important to have clarity from the get-go about what your position entails.

  • How will you be expected to spend your time?
  • What will a typical day look like?
  • Are you meant to do your own prospect research?
  • What support and enablement will you receive?
  • Who will you report to?
  • What metrics will you be accountable for?

These are some questions you may want to ask before deciding if this position is a fit for you. If your would-be employer continues to be vague about your job details, consider this a red flag.

As a commissioned sales rep, you want to be spending your time selling—not focusing on “other tasks as assigned.”

Unclear Lead Flow

Is part of your job to work inbound leads? How are those leads assigned, and how will you know if they’re any good?

If you’re meant to come up with your own leads, how do you register them? What’s your territory or industry vertical? What happens in case of a dispute with another rep?

Are you supposed to own the deal from end-to-end, or hand it off to someone else at a certain point? How does that process affect your commissions?

Be wary of any position with a fuzzy process. While that’s common among startups and small companies, it also usually means that there isn’t a replicable sales process. You’re likely to end up struggling to hit your performance targets.

The truth is, if the business doesn’t understand their own lead flow, they also don’t understand how you fit in. That means your job is likely to evolve over time, and could even get eliminated sooner rather than later.

High Turnover Rates

Nothing screams “don’t accept this position” like a company with high turnover rates. Yes, some businesses turn over staff quickly due to changing priorities, the nature of their industries, or because of an unforeseeable market change.

But more often than not, it’s an indicator of a serious problem in the company.

High turnover rates can be the result of incompetent management or a toxic workplace culture: Two things sales reps don’t want to deal with.

Do your research. Was someone else in the role until recently? How long were they there? Why did they leave? Can you speak with them?

If there are high turnover rates, ask the hiring manager why. Take careful consideration of their response, and be especially wary if they blame their turnover rates on incompetent or lazy employees.

These are also great questions to ask the HR representative who is likely to do your initial phone screening. It doesn’t need to be an inquisition—Asking questions is a great way to build rapport in the interview:

What are your job metrics? What support do you get? If I got hired, how could I support you?

Commission-Only Roles

I know what you’re thinking: Isn’t earning big commissions the whole point of a sales job?

It’s true that big commissions are big incentives to work hard and sell! But there’s a big difference between offering commissions and only paying commissions.

Commission-only roles don’t compensate you for the time you put into learning a product, dealing with internal bureaucracy, or chasing dead-end leads. If you don’t sell, you don’t earn. Full stop.

Commission-only roles also don’t recognize that sometimes the reason deals aren’t closing isn’t because of the sales rep. No matter how skilled you are at selling, deals can get turfed by substandard support, inadequate security, a bad product-market fit, competitors with large moats, industries with long or closed buying cycles, and even unprofessional marketing assets. None of those are things sales reps can control.

In most sales organizations, most reps achieve close to quota, and a few outperform dramatically. When OTE is heavily weighted towards commissions, the take-home pay for outperforming reps increases dramatically.

With all else being equal, total salesforce compensation is significantly higher. The only way for the business to come out ahead would be for a significant portion of their salesforce to sell far less than their quotas.

So if the company was confident in their product and their sales process, they probably wouldn’t offer commission-only roles at all!

There are some exceptions, of course. Dive into our “Future Of Sales Skills” event on Youtube for more insights.

Limited Training

Even though you may be confident in your own skills, onboarding an employee is a big process. New employees need to learn a new industry niche, new competitors, new coworkers, and new internal processes, nevermind a new product!

So before you accept a role, you should ask about the training process. Do they have a plan? What’s your ramp time? Have they onboarded someone into this role before?

If your training is limited, or needs to be pushed out from your start date (for example, so that all new hires can gather in a central location for training), proceed with caution. A lack of training is a bad indicator for the future support you’ll receive in all sorts of other areas.

Ineffective Job Interviews

A good job interview is a two-way learning process. You learn more about the company, but the company also learns more about you.

When interviews are too short or too disorganized, it’s a big red flag.

Job interviewers should be excited to tell you about their product and their market opportunity. And they should be eager to understand what you bring to the table.

Bad interviews take a few different formats:

  • It’s not an interview, it’s a pitch. When they’re not an outright scam, companies like this are trying to take something from you: They may want to benefit from your professional network (e.g. “network marketing”, “multi-level marketing”), or they may actually need partners and investors, not employees.
  • It’s not an interview, it’s a slaughter. There are no introductions, and no question-and-answer. They grill you on things you don’t understand, and make you feel bad for not knowing. They might be trying to tear you down as a negotiating tactic, or they might be looking to disqualify you because they’ve decided to hire someone else. But either way, they’re wasting your time, because you shouldn’t want to work for a company with no empathy or tact.
  • It’s not an interview, it’s an obstacle course. Let’s schedule a call at 2pm. Sorry, can you do 3pm? I know we said we’d meet at the office, but I’m at Starbucks, can we meet there instead? Oh, and do you mind if it’s a group interview? Run away.
  • It’s not an interview, it’s a party. There’s a parade of people in and out of the room. The introductions run long, and the small talk is good. They’re looking to make a quick decision, and the interview is a formality. It’s after working hours, so let’s have a few drinks. There’s nothing wrong with informal interviews as a part of a longer interview process, but if all you get is style, and never substance, you’re not dealing with a serious business. You might actually be on a date?

Offer Letter is Not in Legal Copy

A job is a legal contract between two entities. It binds you to a business, and binds the business to you. Your respective rights and protections are defined by law. Your offer letter and job contract narrow the obligations and benefits that each of you receive.

Employees are an asset for a business, but they’re also a huge risk. And businesses mitigate risk by consulting lawyers.

Lawyers can seem expensive for you as an individual, but a simple consult and legal draft is a trivial cost for a business. Larger companies even have their own in-house lawyers.

So when you receive an offer letter for a sales job, the company (or at least any company that you can trust to actually pay you) will have consulted a lawyer about it.

Lawyers write in a specific and recognizable way. Anyone who regularly looks at offer letters or legal contracts will immediately recognize a “non-lawyer” offer letter. And that’s a huge red flag.

Sometimes, a company will verbally go over an offer. As long as the information is also in the letter, that’s actually a good sign. But if the company is making verbal promises, or adding assurances that aren’t in writing, don’t sign.

If your prospective employer says they will finalize contract details after you have already started, take this as a warning. You should insist that they finalize the details before you start so that nothing is forgotten and you’re not taken advantage of.

If you don’t want to be confrontational, remember: If you’re being hired to sell, you’re being hired to negotiate. Pushing back on your offer actually makes you more valuable.

What Should I Do If My Offer Letter Has Red Flags?

If at any point you notice one or more of these red flags, you don’t need to throw in the towel right away. But go back into your corner, check with your coach, and consider your next move carefully.