SalesHQ

I left my IT sales job of 9 years back in March of 2008 due to pure overload and torture on my health.  It was just one of those times when you know you need to throw in the towel and go do something else for a while.

During my so called sabbatical is when the economy really started to take a turn for the worse.  I got involved in another ongoing project till December of 2008 which prevented me from jumping back into the job market while everything was headed downwards.  Since I am a firm believer in the 'start what you finish' motto, I'm only 2-3 months into the job hunt so far. 

What I've noticed over the last few months though is that a lot of the sales jobs out there that you would normally expect to be either salary jobs or base+commission jobs, and either way, jobs with benefits, have been moved to 1099 contractor jobs.  I've seen it with companies of various sizes, large and small. 

I've even seen where a job posting to be an actual sales employee was moved to a 1099 contractor position after all the resumes were collected.  I applied and got the actual response which I'll share with you here:

Thank you for your interest in a sales position at XYZ Company. Over 
the past few months we have received hundreds of applications of highly
qualified professionals for this position. It is virtually impossible for 
us to make a qualified hiring decision other than through actual sales 
experience.

As a consequence we have decided to set up an XYZ Sales Affiliate 
program to give qualified applicants the chance to demonstrate their 
skills and earn revenue on a commission basis. 

Now, I'm OK with the trend that's going on out there, well, to a degree.  It's a rough economy and with the number of resumes floating around, the hiring process as companies used to know it has gone to new levels that we probably can't begin to wrap our heads around.  What I'm having a problem with is that a lot of the companies out there that are hiring salespeople as 1099 contractors have taken away the real essence of what a 1099 contractor is.

Technically, and from what I've read in all the legalese of what a 1099 contractor is, you're supposed to be 'self-employed' and contracting out 'your' services to the employer, not the reverse.  This essetially makes you the employer and the employee.  The downside of that of course is that you're not getting any benefits and your picking up the entire share of the social security and medicare taxes.  Also, employers have the 'fire at will' clause on their side.   

What I've seen though is that these employers want to hire you as a 1099 contractor and still expect to be able to control your work day as though you were a salaried employee.  That means they expect certain work hours, levels of production, attendendance on conference calls and at redundant weekly regional sales meetings, pipeline reports, sales funnels, yada yada yada.  These requirements defy every aspect of a 1099 contractor as I've read to know it. 

Now don't get me wrong here, I think that if you make a decision to work as a 1099 contracted sales person, you should be putting in some effort to making some money, but it should be your call as to how much.  Historically I've known people to take 1099 positions on the side of their normal job simply to make some extra cash or try something new.  These days though, that mentality only poses as a good way to get canned, making a contribution to your soon to be blasphemously long resume. 

I should probably note here too that I'm not in any way referring to Network Marketing or Affiliate Marketing gigs here.  I'm referring solely to jobs that I've seen on the major boards such as Monster, CareerBuilder, HotJobs, etc... 

Anyways, this has just been bothersome to me so I figured I'd throw this up to see what the rest of you might have seen out there as well. 

I understand also that this train of thought can't really apply to persons performing services withing a 1099 contractor position as they are generally only being hired on a per-project basis within their niche skill sets.  But as for salespeople, if we're going to be pushing boxes for someone else while footing the full tax load and having no HR departement to report to, it doesn't make a whole ton of sense to me to be treated like an actual employee of the company.

Sales has never really been rocket science to me, and I've done extremely well by not treating it like it is.  You learn the product and use your God given abilities to tell people why it's going to solve their problems; then ask them how many they want and by when.  And when you do this well, even as an actual employee of a company, your superiors will generally shut up and just let you do your job. 

In the 1099 jobs I've seen out there, they've taken things to a whole new level.

Let me know your thoughts...

Have you seen the same trends on on the job boards in the areas you're searching in? 

Have you seen any 1099 opportunities that you feel are worth sharing in spite of the requirements?

Do you have any advice at all for a tenured IT sales guy jumping back into the market?

My thanks to all for your time...

I have not seen this trend happening, but if it is it won't last long.  After a few of these companies get nailed by the IRS, it will come to a screaching halt.  If the company is treating their 1099 people like employees, the IRS will come in and require payment of all the back payroll and other taxes (plus interest and penalties) they should have been paying for a W-2 employee.  The small and mid-size companies who thought they were going to save a few dollars will find themselves in serious financial trouble.  I think this trend went through the IT world a while back.  I think Microsoft was a high profile company that got busted.  Once that happens, the companies are either going to treat the 1099 contracts the way they are supposed to (and lose a great deal of control) or they will go back to w-2 positions so they can have the control they want.

Luke

It sounds like however you look at it, you end up being their slave, instead of having integrity and treating you like a professional.

I work with an international company where even though I am 1099'd, I am treated with respect, I get to set my own hours, and trained fully to earn a mutiple six figure income every single year. The company is looking for very ambitious, motivated leader type people who are serious about making a multiple six figure income. By all means you can contact me if you find your present situation is not working out for you. 

Hi smile,

A 1099 is a self-employed tax code.  Meaning the company does not withhold any federal or state taxes for you.  You have to do that yourself. Some people pay it every quarter, and some wait till the end of the year and find out how much tax they owe based on what they made.

If you aren't taking the taxes out as you go or have enough deductions to off set the tax you could be in big trouble!

It may be called something else in Canada? Where are you from in Canada? I am looking at moving to BC. Possibly Texado Island..are you familiar with that area?

Robin

with a 1099 your responsible for your own retirement,insurance and taxes both federal and state if your state has those taxes. If I remember correctly don't you have to have a federal id number and turn your taxes in monthly?

I think there is a difference between straight commission and independent contractor.  I'll try to get clarification, but I believe you can be straight commission and be an employee rather than being designated as an independent contractor.  In that case, the employer would withhold taxes and would be responsible for paying their 1/2 of payroll taxes rather than you having to carry the full burden.

Luke

gr8lif says ...

Diddy,

Great post and very relevant. I was in an all salaried sales position for the past five years. Job was eliminated end of the last month so I am on the job hunt and finding the same as you with the 1099, independent contractor status. Since this is all new to me, I'd like clarification on if there is a difference if you are "all commission" versus you are 1099'd? Imagine benefits come into play in some cases. But what are other considerations. thanks.

 I have started Network Marketing business and just got 1099'd.  The downside is there are no benefits but the tax write-offs are great.  Anything that has to do with my business I can use.  My car, going out to eat, furniture( I work from home), computers, cell phone, etc.  With    W-2's one cannot take advantage of these tax write-offs. Especially if you are single and don't own a home.  I am not aware if the 1099 jobs from the companies you have describe have the same advantage, but I would imagine that they do.

Minus the benefits I believe this is a better way for the individual to be in control of their own life.  You can pick your hours, how hard you want to work and what benefits you really want. No longer does the corporations have control over you, nor can they use you as there tax write-off.

Hi Smile & Robin,

I have recently had my first experience filing 1099 taxes. The IRS rules (pdf available on request) requires quarterly payments of estimated tax in order to avoide penalty. I was not aware of this requirement and now await notice of my penalty.

Hope this info helps you.

Erwin

Hi smile,

A 1099 is a self-employed tax code.  Meaning the company does not withhold any federal or state taxes for you.  You have to do that yourself. Some people pay it every quarter, and some wait till the end of the year and find out how much tax they owe based on what they made.

Bob:

I don't know from legal. but if you are 1099 you can do that anywhere for anyone. Find what you like to do with people you like to doit with and move on. These guys sound like poison to me.

rich34232 says ...

With a 1099 they cannot tell you when to show up for work,they cannot give you a work vehicle, you cannot work exclusively for them. At least  in the 80s and early 90's 1099 meant this. There are more  rules  that you and they must abide with.

    I can see how they could wish to use the 1099 and allows you to be an outside rep working in your own time and using the 1099 renforces your need to put in sufficent hours to their brand.

 

They would write a Rule Book exclusively for you, Rich... lol...

In the 3rd party fulfillment (3PF) arena I have seen a similar trend since I got cut loose in late January.  A couple offers from competitors that would have commanded near or above six figure salaries are only 1099.  Given the long sales cycles and lead times, this is not a conducive environment for 1099 unless you have deep pockets.

Great point RR. Of course network marketing is different from 1099 sales. 1099 is selling a product or service while covering your expenses for what should be a more significant commission. Neetwork marketing (MLM) is all that and managing any downline you are able to cobble together as well.

You are right though... if you are worth your salt and you like what you have researched about the company you should be able to succeed given any fair comp plan.