The city of Boston is a powerhouse that attracts some of the best businesses in the world.
New York City is the megacity often seen as the ideal choice for B2B company headquarters and the perfect location for east coast operations, but looking a little further east there exists another powerhouse city – Boston.
In this article we examine the profession of B2B sales in Boston and what this means for the city’s sales hiring landscape. Specifically, we examine the state of Boston’s economy, key factors driving the city’s economic growth, how these factors are creating opportunities for employers targeting sales people in Boston, and how the upturn in the city’s economy is affecting sales wages.
In Boston, the war over sales talent is heating up
With tech neighborhoods springing up and evolving throughout the metropolitan area like the Innovation District, the Leather District, and Downtown Crossing, the war over great B2B salespeople is becoming increasingly fierce. And with the city’s airport, Boston Logan, opening up a notable number of new direct international flights, the city is poised to attract new employers needing to expand their sales team.
And it’s not just the exposure to new global audience’s that’s spurring demand for great sales people…
The Boston Herald reported that the city’s economic development department is hiring more staff to help pave the way for more businesses. New staffers are focused on cultivating specific business areas such as technology and healthcare and helping them find the right locale for their offices.
Beyond the initiatives undertaken by the economic development department, prospective Boston employers are being attracted by the fact that the city is anchored to major centers of higher education like Harvard, MIT, and Boston College. In fact, the Boston Redevelopment Authority notes that “the city is home to 35 colleges and universities, 34 percent of the state’s total college enrolment, and ranks first in the percentage of population between the ages of 20 and 34, and fourth in the percentage of young adults with a college degree.”
An excellent option of sales specific programs such as Harvard Business School’s Aligning Strategy and Sales Program, and MIT’s Entrepreneurial Sales course enable companies the opportunity to build and develop the skills of their sales teams locally. Moreover, the region’s multitude of universities provides companies in Boston a strong and sustainable talent pipeline from which they can source from, and retain, for the long term.
Boston’s economic picture
While some economic indicators remain relatively flat, the city’s strong push for foreign direct investment, venture capital investment, and new development along the waterfront has Boston’s sales landscape looking bright for both employers and candidate’s. The uptick in these areas, in addition to strong employment growth in Boston’s renowned education and healthcare services sector, and strong initiatives to support technological innovation, reflect a city working to expand its economic prowess and attractiveness to employers.
Overall, Boston’s economy is poised for continued growth. Wells Fargo Media reported in April of this year that “Boston and New York City metro areas received the third and fourth largest sums of venture capital dollars last year,” and noted that the region “is home to a number of the world’s top universities and research centers, which foster gains in technology-related investment.” The Massachusetts Economic Outlook published in the fall of 2014 reports that professional services and business services jobs will grow 14.2 percent – more than twice the rate of overall employment, however, manufacturing will remain slow.
Driving Massachussetts growth are the state’s technology, biotechnology, and health care sectors, which have expanded solidly in recent years. – Alan Clayton-Matthews, Northeastern University economist.
The Bureau of Labor Statistics reports that the Boston Area’s employment rate rose 2.2% from July 2014 – July 2015, with unemployment falling from 5.5 to 4.5 percent over the same time period. Median household income is $72,907, almost 1.5 times the national rate of $52,250 according to the Society for Human Resource Management. NewsMax lists Boston’s Five strongest industries as financial services, technology, medicine and life sciences, manufacturing, and fishing. Tourism finished in sixth place due to an increase in international travel.
Over-the-year change in total nonfarm employment for large metropolitan areas, not seasonally adjusted – US Bureau of Labor Statistics
What is propelling the growth?
According to the Bureau of Labor Statistics, “two super sectors in the Boston area – education and health services and professional and business services–accounted for almost half of the local employment gain from July 2014 to July 2015.” Leisure, hospitality, trade, transportation and utilities posted the next highest gains and are poised to continue solid growth.
A concerted effort to lure international travelers resulted in a 10 percent increase in tourism from 2013 to 2014, as reported by the U.S. Department of Commerce. Flight statistics provided by the Greater Boston Convention and Visitors Bureau show that the number of international flights arriving at Boston Logan International Airport increased by 9.8 percent following the addition of nonstop flights from several countries. A new nonstop route from Beijing is credited by the Boston Globe with pushing China ahead of the United Kingdom in travelers to Boston for the first time. The Globe also reports that nearly a quarter of Chinese travelers came for education, which bolstered the increase in the education and health services sector as well as in hospitality and transportation. Several nonstop flights to Boston Logan are being added in 2015, including Hong Kong, Mexico City, Tel Aviv and Shanghai.
Development is also playing a role in Boston’s economic growth. The Society for Human Resource Management made note of the development of Boston’s waterfront region in its Metro Economic Outlook for the city. The waterfront has seen the opening of Vertex Pharmaceuticals’ new 1.1 million-square-foot headquarters complex in 2014. A 23-acre redevelopment of the waterfront includes One Seaport Square, a two-tower complex with a total of 250,000 square feet of retail space and 832 luxury apartments. The towers broke ground in November 2014 and are expected to be completed in 2017.
The Neighborhood Innovation District Committee was formed by the City of Boston in September 2014 to support the development of innovation districts throughout the city by identifying policies, practices, and infrastructure improvements. “As we seek to foster and support economic development in Boston, it is essential for us to establish an environment that supports entrepreneurship and job creation throughout all corners of our city,” said Mayor Martin J. Walsh. One of the results of Boston’s Innovation District initiative is District Hall, a collection of open workspaces, classrooms, assembly space, and flexible use ‘pods’ to encourage collaboration within the innovation community.
Opportunities for employers targeting sales professionals
The strong gains in Boston’s bedrock education and health services sector, in addition to growth in the professional and business services sector have stabilized the local economy, and fuelled renewed interest in the city as a viable market to drive new revenue. Businesses like Seismic, a rapidly growing sales and marketing software product, are selecting Boston for new offices and headquarters as a way to take advantage of the confluence of financial services, healthcare, and insurance companies – and the city’s highly skilled labor force. Seismic CEO Doug Winter told Reuters, “Our new Boston office will help us continue to grow and share our vision.”
Boston delivers a broad customer base to companies like Seismic, and though fueled by growth in the high tech sector, Massachusetts’ employers still face some trouble. The Greater Boston Chamber of Commerce reports that of the nearly 350 corporate executives and business owners who attended the 2015 Economic Outlook Breakfast, 23 percent cited winning new business as their top challenge. Regulatory costs and burdens, and pressure from larger competitors came in second and third.
The top challenge executives in Boston face: Winning new business. – Greater Boston Chamber of Commerce
For some companies, the move to vibrant metropolitan areas like Boston is not only impacting their economic prospects their corporate culture as well. In hyper-competitive markets like Boston, businesses known for fostering a good corporate culture have a competitive edge when it comes to recruiting top talent. “Just as brand differentiation helps attract customers, culture differentiation helps attract the right employees,” writes Denise Lee Yohn in the Harvard Business Review (HBR). Another HBR article points to research conducted by Thomas Kell and Gregory T. Carrott that shows that corporate culture influences employees’ leadership styles – in fact, their research showed that no matter what their jobs, employees are “30 percent more likely to exhibit similar leadership competencies” of the people they work with. These distinctions are important to great sales people who are keen to work alongside fellow pros with great reputations, and who will always do their due diligence on a company’s reputation prior to accepting interviews.
World-class employers also keep their eye on real estate where they locate their Boston office in order to maintain an edge in recruiting and retention. Biogen, a biotech firm, relocated from Boston’s suburbs to move into Cambridge’s Kendall Square, a trend that’s catching on in the Boston metropolitan area. Biogen’s associate director of community relations, Chris Barr, told Boston.com that the move brought hidden benefits like walkability and proximity to other science and tech firms like Google and Microsoft. “I love it,” Barr told Boston.com, “If I have lunch at one of the new restaurants like Area Four or Catalyst, you’re going to run into five or six people from Biogen or other companies and your’e going to share ideas and learn about what’s going on.”
The impact on sales salaries
Boston companies should note that the upturn in the city’s economy is having an effect on wages. According to Glassdoor, the mean salary for sales and related jobs is 26 percent higher in Boston than the national average. Over the past 3 years, we have seen the median base salary for senior technology sales representatives, those with 5+ years experience selling SaaS, Software, and/or Hardware, rise 7%, from $82,300.00 in 2012 to $87,680.00 in 2015. Similarly, the base salary for territory managers in the software vertical has risen 5%, from $129,000 in 2012 to $135,200 in 2015. Compensation plans have remained steady with a 50/50 base commission split, however, technology start-ups in the Great Boston Area have introduced more lucrative draws – up approximately 12% from the past two years – in an attempt to reduce the impact that long sales cycles have on first year earning potential.
High-growth companies looking to hire top performers in the Boston market should therefore be prepared to find ways to economize on the higher-priced labor. Introducing new technology that can reduce rep travel requirements or administrative functions, for example, can mitigate the impact on rising wages over the long term.
The bottom line
Boston’s emphasis on expanding international trade and supporting innovation in its tech, education and healthcare sector will continue to spur the city’s economy. A growing job base, a good economic outlook, and a strong talent pipeline makes it easy to see why Boston is a top choice for business operations.
If your organization requires Boston’s top sales and sales management professionals, contact Peak’s Boston division today.
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