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How to Read Behind the OTE (on target earnings)

By: Maggie Lonsdale BA (hons) - Updated: 8 Jul 2013 | comments*Discuss
On Target Earnings Ote Retail Targets

Even though it’s important to stay positive during a job search, especially when we’re in difficult economic times and good jobs seem few and far between, the sneaky trick of OTEs in adverts can make you want to tear your hair out.

What Are OTEs?

OTE stands for On Target Earnings and the acronym can be variously used in recruitment adverts to make potential candidates think they are likely to earn far more than is realistic, especially within the first six months to a year.

On Target Earnings in any commercial environment relates to the amount of commission possible when all targets are reached and, given that targets are set high, it’s unlikely that new candidates will reach their targets initially.

So when you’re going through the recruitment section in the newspaper or online job boards, be careful not to think ‘yippee, when I get this job I’ll earn £30k’ because the truth is probably far less exciting.

What you need to look at, or ask at interview, is what the basic salary is and what you are expected to do to achieve that, so you can then compare this to your current job or other jobs you are applying for. This information is sometimes available on the advert, but more often than not the OTE is used to lure you to apply for the role, thinking it’s better paid that in actually is, and then you realise how much lower the basic is!

Most people who have a background in retail or at least an interest in working in retail will know that OTEs are not necessarily a bad thing – people in retail usually expect to have to meet targets as they are working in a sales environment. People who are good at this can flourish and earn good money, whereas people who aren’t so blessed with the ‘gift of the gab’ may find themselves wallowing nearer to their basic than their OTE.

Who Earns the OTE Anyway?

But what about how realistic those targets actually are, and what about the types of practices you’re encouraged to employ in order to be anywhere near a chance of meeting your targets? Over the past ten years or so, and certainly since the recession kicked in, people in retail and other target-driven environments have found that not only have their targets increased while the money going around decreases, but they are expected to be ever more harsh in their selling techniques.

Perhaps 15 or 20 years ago, a customer saying ‘no thanks, I’m just browsing’ would have meant that the shop assistant would leave them alone. Now you can hardly step into certain stores without an employee leaping on you to say about their latest offers, or the customer picks up a product and an assistant is gushing about how ‘it’s my favourite product too’ – and that’s without being pressured into buying ‘special offer festive chocolate’ when you get to the till.

Most customers do not enjoy this type of shopping experience yet it’s becoming the norm on high streets up and down the country. The OTE has a lot to answer for! After all, the retail workers know just how annoying they’re being but they can’t risk going against the latest head office ‘suggestion’ for how to speak to customers for fear of not meeting their targets – or coming face to face with a mystery shopper!

Questioning the OTE

So how can you work out what are RE (Realistic Earnings) rather than OTE? It can be difficult to tell from the advert alone, especially as the term OTE is used in many comparable adverts so it’s not like you can just check out how much competitors are paying. You can speak to recruitment agencies and ask what a realistic earning figure is, but the best way to get a true answer is to ask a different consultant than the one that is handling the advert. You can also assume that you are not going to earn the OTE unless you are a demon sales person, so don’t get hoodwinked by the advert – this will only be your very best month if ever.

If you decide to apply for the role, remember that the person interviewing you is not that much more likely to tell you the truth than the advert. If you ask about realistic earning potential, you could look like you don’t believe in your sales skills, but you can say that you are motivated by money (this is fine to say in a sales environment) and you want to know what your first three months’ earnings are likely to be compared with when you really get motoring on your sales targets – this should give you a more realistic answer without sounding negative in the interview.

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