Occupation Report: ‘Technical’ Sales

The data and analysis in this post come from Analyst, EMSI’s web-based labor market analysis tool.

Since the recession hit in 2007, sales jobs haven’t fared well (like pretty much everything else in the economy). Sales and related occupations across the US have dropped by nearly 1 million jobs, a 7% decline.

And yet we keep hearing about an uptick in domestic manufacturing, and we’ve noticed that productivity and exports are actually up. This leads us to believe that the occupations that focus on selling highly specialized and technical equipment might also have been doing a bit better in recent years. If manufacturing products are on the move, then it stands to reason that there has been a growing demand for workers who actually know how to sell them.

In this post, we will focus on two different occupations: sales engineers and sales representatives that sell wholesale and manufacturing products. This second occupation is broken down into two categories, and we will explore both.

Sales Engineers

First, here is a description of the occupation from the BLS:

SOC 41-9031 Sales engineers - “Sell business goods or services, the selling of which requires a technical background equivalent to a baccalaureate degree in engineering.”

Knowledge and Skills

O*NET gives us the top four occupational knowledge areas (a.k.a. stuff learned in school) for sales engineers:

• Customer and personal service
• Sales and marketing
• Computers and electronics
• Engineering and technology

A good background in English, design, and mathematics is also helpful. As for skills (the stuff done on the job), these are at the top:

• Mathematics
• Reading comprehension
• Operation analysis
• Equipment selection
• Decision making

Over half of sales engineers (55%) have their bachelor’s degree. Another 15% have a master’s degree, 8% have an associate’s degree, and 16% have some college, but no degree. In 2010, 2,300 people completed degrees or received awards related to sales engineering. From 2006-2010, the number of degrees awarded in this area declined by 50%. The top instructional program that prepares people for this job is “selling skills and sales operations.”

Job Outlook

Since ’07, sales engineers jobs have slumped by 4,000 (5.5%) and now stand at just over 70,000. However, based on projected data for 2010 to 2012, we can expect at least a small rebound. In 2011, there were 3,000 estimated annual openings (the result of both job growth and turnover in the occupation). Note: Openings are not the same thing as job postings. Indeed.com is currently showing 7,600 current job postings related to sales engineers.

Just over 80% of sales engineers are male. We should also note that 65% of the sale engineers working today are between the ages of 45 and 64, which means that a good chunk of the workforce is tipping towards retirement, and will probably make some room for younger workers in the next few years.

Median earnings for sales engineers are $40 per hour. Sales engineers can expect to start out at about $24 per hour, while top-level earnings approach $66 per hour. But remember, these numbers are on the national level, so job wages can go up or down quite dramatically from region to region.

Geographic Distribution

Here is a quick look at how these jobs are spread throughout the nation:

• Total Jobs – California employs the highest number of sales engineers — by a lot. Current estimates put over 17,000 sales engineers in the Golden State, which is almost four times that of Texas, the next closest state at 4,700. Interestingly, states like Louisiana, New Mexico, Wyoming, Mississippi, Hawaii, and Alaska all report less than 100 sales engineer jobs, which means the job is more concentrated in other states.
• Pay – New Jersey, Utah, and Massachusetts have the highest average earnings at $47 per hour.
• Concentration – California (LQ 2.18) and Massachusetts (LQ 2.20) have the highest concentration of these workers. Both states have more than twice the concentration of sales engineers as the rest of the nation. Other states with relatively high concentrations are Colorado, New Hampshire, Connecticut, Wisconsin, Michigan, and Washington.

Industry Staffing

So, what are these folks actually selling? A good way to find out is to look at the inverse staffing pattern, which tells us the industries that employ our sales engineers. Interestingly, the top three industries (six-digit NAICS) employ about 6,000 sales engineers each: wholesale trade agents and brokers (companies like Honda Motor Co.), custom computer programming services (HP), and computer systems design services (SAIC and Convergys). These three industries collectively employ 25% of the total sales engineers workforce.

Wholesale trade agents and brokers industry has remained relatively flat since ’07, but custom computer programming and computer systems design have actually done quite well. Together, these two have grown by more than 10%, which is a lot given recent trends. This growth, plus the number of current job postings, indicates good demand for technical sales positions.

For more info on the staffing pattern, please contact us.

Sales Reps for Wholesale and Manufacturing

Now let’s turn our attention to sales representatives for wholesale and manufacturing. There are actually two sub-occupations here — one that sells just technical and scientific products, and another that focuses on everything in wholesale and manufacturing except for technical and scientific products. In this analysis, we’ll pay a bit more attention to the sales reps for technical and scientific products because they seem to be in slightly higher demand right now.

First, here are BLS occupation descriptions:

1. SOC 41-4011 Sales representatives, wholesale and manufacturing, technical and scientific products – sell goods for wholesalers or manufacturers where technical or scientific knowledge is required in such areas as biology, engineering, chemistry, and electronics. Normally obtained from at least 2 years of post-secondary education.
2. SOC 41-4012 Sales representatives, wholesale and manufacturing, except technical and scientific products – sell goods for wholesalers or manufacturers to businesses or groups of individuals. Work requires substantial knowledge of items sold.

For the sake of simplicity, we’ll refer to the first group as TS sales reps (technical and scientific) and the second as WM sales reps (wholesale and manufacturing). Just remember, the TS sales reps are still selling manufacturing products; the products are simply more specialized.

Knowledge and Skills

There’s a lot of overlap between the key knowledge sets of both kinds of sales reps, so we’ll group them together. Note: These jobs tend to require quite a bit of know-how — everything from sales and marketing to chemistry. Here are some of the top areas:

• Sales and marketing
• Customer and personal service
• Computers and electronics
• Mathematics
• Administration and management
• English language
• Economics, accounting, production and processing
• Chemistry

These are the top skill areas, which represent their typical on the job activities:

• Persuasion
• Speaking
• Active learning
• Coordination
• Time management
• Negotiation
• Active learning

There is a lot of variance in educational attainment for these jobs. The largest portion (40%) have bachelor’s degrees, while 7% have a master’s, 23% have some college but no degree, and 19% have a high school diploma.

What are the top programs for training a sales rep?

• Business, management, marketing and support services
• Sales, distribution and marketing operations
• Selling skills and sales operations
• General merchandising, sales, and marketing operations
• Special products marketing operations

Job Outlook

First, it’s important to notice the size of each employment category. Only 400,000 are employed as TS sales reps while 1.38 million are employed as WM sales reps. Together, these two categories declined by 8.5% (-165,000 jobs) since ’07. This is actually a bit higher than the average loss of 7% for the sales sector. The WM sales, not surprisingly, dipped further (-9.1%) than the TS sales (-6.3%).

However, since 2010, we’re seeing a slight upturn in employment. If we switch our timeframe and look at jobs for 2010-2012 (again — largely projected data), we see a combined growth of 3.7%  — 2.2% for TS and 1.5% for WM. See the two overview tables below:

TS Sales Reps

 WM Sales Reps

In 2011, the US had an estimated 58,000 annual openings (again, a combination of growth and turnover) for TS and WM sales jobs. In 2010, about 20,000 related degrees were awarded.

The median wage for these jobs is nearly $27 per hour, with the TS sales workers having an edge — $34 per hour vs. WM’s $25. (See the chart below for a full comparison.) For both TS and WM sales reps, the median salary is $13 for starters and just about $55 for top-level earners.

And now here’s a fascinating stat. Remember that there aren’t nearly as many TS sales reps, and yet — according to Indeed.com — TS sales has 2,650 current job listings while WM sales has less than 500.

Demographics

Over 80% of the people employed in these two categories are male. Roughly 50% are older than 45, which means that there could be a need for replacement workers in the coming years.

Geographic Distribution

Now let’s see where these jobs are concentrated:

• Total Jobs – California (170,000+), Texas (150,000+), New York (110,000+), and Florida (107,000+) employ the most. These states have large populations and lots of industry activity, so no big surprises here.
• Pay – In terms of pay, Massachusetts, New Jersey, Delaware, Connecticut, and Minnesota are at the top. The median wage for sales reps in each of these states is over $30 per hour.
• Concentration – The states with the highest density of sales reps, or the most per capita, are New Hampshire (LQ 1.35), Georgia (1.25), Colorado (1.25), Pennsylvania (1.21), and Utah (1.17). This is likely because sales workers are tied to very specific merchant wholesalers, which are themselves concentrated in these areas. The states with the lowest concentrations are Washington, D.C., Alaska, Wyoming, New Mexico, Hawaii, Mississippi, West Virginia, and Vermont.

But if we consider the TS sales reps by themselves, the story changes a bit:

• Total Jobs – California, Texas, and Florida are still on top, but Illinois, Ohio, Massachusetts, Georgia, and Pennsylvania are above New York.
• Pay – The highest wages are still in New Jersey, Minnesota, and Massachusetts, but we add North Dakota, Oregon, and Virginia to our list.
• Concentration – Here the picture changes quite a bit. New Hampshire is still No. 1 (LQ 2.01), but Massachusetts (1.71), Delaware (1.40), Idaho (1.34), Florida (1.33), South Dakota (1.31), Oklahoma (1.30), and Connecticut (1.30) join the list.

What happens when we look at just the WM sales reps?

• Total Jobs – The big states are still here (California, Florida, Texas, New York), but we add Pennsylvania (77,400), Illinois (63,000), and Ohio (60,000).
• Pay – Top-paying states stay the same.
• Concentration – Pennsylvania (LQ 1.31), Colorado (1.23), Georgia (1.23), New Jersey (1.18), and Alabama (1.17) have the highest concentration.

Top Industries

The list of industries (or groups of similar businesses) that employ these sales reps is large and diverse.  Here are the top five, plus a few others for consideration:

1. Wholesale trade agents and brokers (companies like Honda Motors)

• This industry employs 290,000 sales reps — 16.3% of all sales reps
• Sales reps compose 37% of the industry

2. Drug merchant wholesalers (Eli Lilly and Bristol-Myers Squibb)

• This industry employs 66,000 sales reps — 3.7% of all sales reps
• Sales reps compose 34.5% of the industry

3. Industry machinery and equipment merchant wholesalers (Cummins Inc. and Ingersoll-Rand)

• This industry employs 59,000 sales reps — 3.4% of all sales reps
• Sales reps compose 21% of the industry

4. Computer and computer peripheral equipment and software merchant wholesalers (Avnet and Pitney Bowes)

• This industry employs 41,000 sales reps — 2.3% of all sales reps
• Sales reps compose 18% of the industry

5. Medical, dental, and hospital equipment and supplies merchant wholesalers (Lincare and Cerner)

• This industry employs 37,000 sales reps — 2.1% of all sales reps
• Sales reps compose 19% of the industry

Other top industries that employ these sales workers are as follows:

• Corporate managing offices
• Electronic parts and equipment merchant wholesalers (companies like Northrop Grumman and Ericsson Inc.)
• General line grocery merchant wholesalers (Piggly Wiggly and Bozzuto’s)
• Electrical apparatus and equipment, wiring supplies and related equipment merchant wholesalers (Rockwell Automation and GE Energy)
• Other grocery and related products merchant wholesalers (Coca-Cola and Hostess)
• Beer and ale merchant wholesalers (Anheuser-Busch and Miller Coors)
• Other chemical and allied products merchant wholesalers (BP Chemical and P&G)
• Motor vehicle supplies and new parts merchant wholesalers (Remy Power Products and Dana Corp)
• Office equipment merchant wholesalers (Ikon Office Solutions and Konica Minolta)

Potential for Employment

If we look at the current economic activity of just the top five industries (wholesale merchants, drug merchants, industrial machinery, computer and software merchants, and medical equipment), then we see about 3.4% job growth. This is important for two reasons: 1) these sales reps are an integral part of these industries, and 2) as these technical sales reps grow older, there will be a need for replacements.

CONCLUSION

So we’ve packed a lot of data into this overview of technical sales jobs. What’s the biggest takeaway point? It looks like there’s good demand for sales engineers and technical/scientific sales reps, and that demand is probably going up. Besides that, these jobs pay pretty well and are tied to a broad array of industry sectors, particularly computers or software services, industrial or automotive machinery, and health care, which are global exporters of specialized products and services.

Northeastern states like Massachusetts, Connecticut, Pennsylvania, New Jersey, and New Hampshire as well as states in the Great Lakes region — Illinois, Ohio, and Wisconsin — have more specialization for these workers. Western states like Colorado, California, and Washington and Southern states like Georgia and Virginia also have good opportunities.

If you have questions about this data, please comment below or contact us. You can follow EMSI on Twitter @DesktopEcon.

Read more at Economic Modeling Specialists (EMSI blog)