Hold on to Your Sales Talent
Finding, Attracting and KEEPING the Best Salespeople
The average cost of losing a salesperson with repeat and referral business ranges from $50,000 to $250,000 on up, per year. Just to replace one good salesperson can cost as much as $20,000 to $30,000 when the cost of recruiting and training is calculated. The biggest mistake business owners make is they don’t accept the problem of sales turnover as a serious one.
If you want to compete with corporate America for sales professionals, you have to be willing to offer matching incentives in order to attract and retain quality people. Companies have to give salespeople an incentive to stay with them, because it costs a fortune when they don’t. A company that relies on a sales department, must become more sophisticated in its way of recruiting and screening. Here are a few ways to find good candidates:
Stopping the Revolving Door
- Recruit experienced salespeople from among the ranks of other sales fields, such as real estate, department stores, insurance and retail sales.
- Get involved in your industry associations where you can meet salespeople from competing companies and suppliers.
- Attend your target prospect’s associations. You can prospect for new business as well as new sales recruits.
Evaluate previous and current employees for selling skills or ask if they know of anyone who can sell. Try to think of creative ways to find people who will adapt well to selling your product. If a person has been successful selling another product or service, chances are they will be successful at selling yours. Also, senior management or the sales manager should spend 15-20 percent of their time recruiting.
There will always be a need for quality salespeople. Either to replace someone in your company or to add to your existing sales force. Some suggestions for retaining sales professionals:
- Treat salespeople as a valuable commodity and offer low-cost “perks” that motivates them.
- Offer salary incentives. Long-time salespeople and those recruited from competing companies could be rewarded with monthly salaries contingent on bringing in a predetermined number of outside sales during the year. New recruits could earn a salary in addition to their sales during the first few months on the job, to eliminate the fear associated with a commissions-only position.
- Develop training program for all your salespeople. Many new salespeople fail because they are never taught how to sell the product. And veteran salespeople fall into ruts because they use antiquated selling methods.
- Provide days off, long weekends and holidays. It doesn’t cost anything, and it’s something offered in nearly every other industry.
- Schedule time for salespeople to make prospecting calls and contacts. If they go on the road regularly or are scheduled to “work the floor,” mandate specific times for them to prospect for new business. It will result in more sales and increased profits for the salesperson and the company.
- Provide company cars or reimbursement programs for expenses such as entertainment, car payments, insurance, tolls and gas.
Set up an organization system and require all salespeople to use it. Studies show that salespeople waste 50 percent to their time because they are unorganized.
Many factors contribute to the revolving door phenomenon at companies. Among them are poor initial screening processes, lack of solid training for the sales force, failure for owners to give managers the proper authority to oversee the sales staff and tolerating mediocre salespeople and practices.
It is extremely important to thoroughly screen each candidate before he/she is offered a sales position. Have two or three managers interview every candidate, then make a group decision. The old saying holds true in this case, “Two heads are better than one.” There is no place for gut reactions in the hiring of salespeople. Another big mistake companies make is offering to little of an incentive for a person to choose their company over another sales position.
Often, the owner or manager never tells a recruit what the company has to offer. They don’t tell a new candidate what will be expected of them, what their earning potential is, what extras come with the job and what their career path could be. High turnover effects all people and/or departments in an organization. New salespeople need to adjust to your companies policies or procedures and usually take other people’s time to figure out how to “get things done.” The next time you need a sales professional, ask yourself this question, “How are we at recruiting and retaining salespeople, and what could we do to make it better?”
Turnover is inevitable. Employees come and go, people retire and die. Yet, turnover can be a positive process that gives a business new people, new vigor and new ideas. On the other hand, turnover can also become a profit-killing liability that debilitates a company. J. Douglas Phillips, writing in Personnel Journal, has blamed the high cost of employee turnover for the decline of productivity and the inability of many U.S. firms to compete in world markets. Turnover management and analysis is important to every business and every department. The excessive costs of turnover are frequently overlooked but are an important factor that affects a company’s bottom line.
Turnover has many causes and it can accelerate when events cause employees morale to drop. When conditions decline in a company, the first to leave are often the best employees. Those who are the most talented and whose abilities are most in demand elsewhere are most likely to exercise their options. When a company loses its best people, the effect can be disastrous. Turnover can also be the result of a “revolving door” hiring policy. This occurs in sales organizations when the boss has a “throw the mud against the wall and hope some of it sticks” attitude. It is also seen where a company does not have a clear idea of what attributes successful employees must have.
In the absence of clear hiring criteria, a company will hire those who meet a minimum standard and will evaluate job-fitness through trial and error. This is an expensive method when you take into account the costs of training and the loss of productivity. Excessive turnover is often a symptom of fundamental problems within the business. If, for example, a company has a department where the turnover is twice or three times the rate in other departments, it could be the sign of a problem that could range from poor hiring technique to sexual harassment.
Thus, excessive turnover should be viewed as a sign that there are other problems which must be identified and addressed. When these problems are dealt with successfully, turnover problems will be minimized. Attempts at solving the turnover dilemma which ignore fundamental problems will be no more successful that trying to solve morale problems by putting up posters with pithy slogans. A primary place to start solving turnover problems is in your hiring system.
When you can specifically define the qualities and characteristics that contribute to job-fit, you can do a better job of identifying the job candidates who will find long-term success in your company. There are tools on the market to help you achieve the goal of hiring people who will succeed in their jobs. These tools measure mental abilities, interests and motivation and job-related personality characteristics.
A study of your present employees results in a Success Pattern that you use for hiring. The Success Pattern will graphically display the qualities and characteristics which your successful employees posses. This pattern will allow you to evaluate job applicants to see how closely they match with people who have already demonstrated their ability to perform the job successfully. When you hire someone who lacks job-fit, you do no one a favor. When people don’t fit a job, they become unhappy, suffer from stress-related problems and lose self-image when they ultimately fail. The company that hires them will have productivity and morale problems and will likely see increases in the cost of health care plans. It is better to disappoint job applicants who do not fit with your Success Pattern than to hire them and subject them to eventual failure.
When you work at attacking the root causes of turnover, you make your business a better place to work, a more productive environment and a more profitable enterprise.