Hiring a salesperson internally might seem simple at first, but hidden costs can quickly accumulate. First, there's the recruitment expense. This includes costs for advertisements, recruitment agency fees, and the time spent by your HR team in sifting through applications and conducting interviews. Then, once a candidate is selected, they need to be trained and onboarded, which requires significant resources.

Moreover, a salesperson will need support from other staff members, such as administrative personnel and managers, who also have associated costs. The overall expenses can be quite substantial and are important to take into account when deciding whether to hire internally.

Creating a robust sales pipeline is another cost centre often overlooked when hiring internally. Approximately 40% of salespeople identify prospecting as the most challenging aspect of their job. This highlights the importance of having sufficient data and leads for your salesperson to contact. But where do these leads come from, and how reliable are they? Companies should assess their leadership and expertise to determine whether outsourcing might be more beneficial, especially if there’s an urgent need to establish a pipeline or boost sales quickly. Firms should also consider the technological resources required, such as setting up a new CRM, and the associated financial risks.

Setting up an internal telesales team involves more than just hiring. The cost of tools and office space can be substantial. Overhead costs, which encompass necessary equipment and workspace, are estimated to be around £4,800 per new employee.

These expenses include computers, software licences, and the physical workspace required for each employee. If your sales team engages in field sales, travel expenses will also need to be accounted for. These costs can quickly escalate, further increasing the financial burden on the organisation.

National Insurance Contributions (NICs) are another major expense. These are compulsory payments made by employers to the government. The rate varies depending on the employee's age and earnings, but generally, it is 13.8% for employees aged 21 or over who earn more than £175 weekly. This can add a significant amount to the overall employment cost.

In addition to pensions and NICs, there are other benefits that employers might provide. Healthcare benefits, for instance, can be quite costly. On average, these benefits can amount to around £1,500 per employee each year. Employee discounts and other perks can also add to the expense.