The High Cost of inexpensive Sales Professionals3 Nov, 2014
You have to wonder why turnover is so high in the sales world. Why do so many reps with the ability to earn great incomes perform at less than fifty-percent of their goals?
Ten reps turning over in a twelve month period can cost you as much as half a million dollars on your bottom line. Ten reps performing at less than fifty percent of plan has the same effect over a longer period of time.
How did they get hired? Why are they still onboard?
First, let’s discuss “how they got hired.” Frequently, salespeople get hired to fill the spot of the rep that left before them, and often after underperforming for an extended period of time. More than likely, this predecessor was selected from a pool of candidates willing to take that sales position. At times this is a case of choosing the “best of the worst.” Too often in our industry we benchmark against our competitors and not against the competition for good sales people at-large. We need to break out of that model and hire the candidates with the best possible chance of succeeding (and growing your business). Websites like Salary.com or Glassdoor.com can give you an idea of what the top sales talent is being offered, which may explain why you are not attracting the best people.
Why are they still onboard? It’s probably not because the manager has a soft spot for them; more likely, they are still onboard because the manager doesn’t want to face deselecting the current rep and having to train a second or even third rep to find that top performer. If the organization has not made the commitment to hire the best talent, you are putting your managers in a position of managing a “revolving door.” It might have worked twenty years ago, but it doesn’t work today.
Your sales managers were promoted because they were highly effective sales people. Although many of the skills are transferable, the skills that make a successful sales person are not always the same skills that make a successful recruiter. Like selling, there is a “science” to recruiting that is difficult to learn on a part time basis. You probably have trained your managers on behavioral interviewing, showed them what good looks like in a rep, or on a resume, but the results often indicate that they are not really proficient at hiring the right people for the job.
KPI’s you should be monitoring:
- The percentage of candidates that develop into consistent, high end performers.
- The quality / quantity of their sales candidate pipeline for their open position & for every rep performing under 50% over the past 6 months.
- The number of under-performing reps not on corrective action plans.
Today the question should be, “If I am willing to hire the best, how do I protect my investment?” The answer is simple but the challenge is always in the execution. First, tighten the onboarding process to make sure each new employee knows what is expected and is given the tools to succeed. A key would be to ensure that the new hire has a metrics-base assignment and has the potential to meet his quota commitment. Second, get a commitment from the manager to develop each member of his/her team. Here the focus needs to be on pre-call planning and developing strategies and tactics in every assigned account measured in pipeline growth. Finally, each new hire should have a written developmental plan focused on their personal areas of development.
Making the investment to hire the best people, and protecting your investment with a strong sales process, is the only way to guard against the high cost of inexpensive sales professionals.