Setting up an in-house sales team costs a lot of time and money. Here’s a breakdown of the costs involved.
According to the Bridge Group, you can spend a total of 1,170 hours hiring reps over a period of several months. The average cost to hire a single SDR is $4,129.
What’s worse, the average tenure of a sales rep is 15 months, and according to a report by DePaul University replacing a rep costs organizations $97,690 on average.
Once you hire a rep, you’ll spend three months training him or her — the average ramp up time is 3.2 months or about 108 days. That means you’d have to pay a salary for those days that the sales rep is not productive yet.
Hiring a full sales team in-house (with 4 SDRs and support staff) may cost your company more than $485k per year with salaries and benefits.
Here are the numbers:
Average SDR salary in the U.S.: $48,412/year + $7,261/year in benefits = $55,673 (222,692 for 4 SDRs)
Average Sales Manager salary in the U.S.: $99,299/year + $14,894/year in benefits = $114,193
Average Sales Trainer salary in the U.S.: $72,829/yr + $10,924/year in benefits = $83,753
Average Quality Analyst salary in the U.S.: $56,616/yr + $8,492/year in benefits = $65,108
On top of salaries and benefits you’d have to pay for office space. Then add desks, chairs, computers, phones, internet connection, utilities, maintenance, cleaning and more (around $12,000 per employee).
Add the cost of technology, such as specialized software, licensing fees per user and IT staff. According to Xant, the average cost for these per SDR is $3,287 per year.
The actual costs will vary depending on your industry, location and other factors, but for the sake of this example, let’s calculate the total cost from the numbers above for one SDR.
Salary and benefits: $55,673
25% of support staff: $63,763
Office space and equipment: $12,000
Tech stack: $3,287