Salespeople must be hired with caution, launched with clarity and the under-performing ones replaced with dispatch. The essence of this rule lies in the speed of hiring and the speed of firing. They both need to move at their own proper speed.
The correct speed? Hire more slowly and fire more quickly.
The real-world? Sales organizations hire too fast and fire too slow. They have the whole thing backwards. The inevitable outcome? High turnover in the sales department.
High Turnover In The Sales Department? Here’s Why.
Believe it or not, the reasons for high turnover in the sales department are easy to isolate and identify. Preventing them isn’t. Here they are:
- Failing to have a consistent recruiting process
- Neglecting to develop a solid strategy for attracting the right talent
- Not applying the right tools in selection
- A perceived need to fill sales vacancies fast
- A weak orientation system
- A poorly designed appraisal system
- A dysfunctional or non-existent performance management system
- Fear of litigation when terminating salespeople
- Not wanting to hurt someone’s feelings
- An unwillingness to be patient on the part of sales managers
- A lack of awareness relative to the costs related to keeping poor sales performers too long
- The eternally optimistic belief that “I can turn this person around.”
The underlying cause of high turnover in the sales department is that far too many organizations are guilty of trying to “sell” candidates into accepting a job offer rather than creating an attractive situation that allows them to be more selective and cautious.
This is compounded by poorly communicating clear expectations for the job.
Consequently, murky performance issues arise, making exemplary performance difficult to discern from average or sub-par results.
When working with a large OEM several years ago we discovered that on a national basis, they had an unusually high turnover in the sales department: 41% annually. The costs were massive, morale was low and sales suffering.
Once we installed a process that showed them precisely how to hire with caution and establish clear performance objectives and expectations they were able to reduce their annual turnover to 19%. That is a 21% improvement.
The most startling part of this story is that they identified the sub-par performers, established new standards for what acceptable performance was and moved toward a clear-cut system for eliminating those who failed to improve.
Most astonishingly, this 21% retention improvement was achieved in spite of a stepped-up process for terminating sub-par salespeople. The facts speak for themselves. It also saved them about 12 million dollars in direct and indirect turnover costs.
High turnover in the sales department is really only part of the problem. There are likely a number of challenges you’re facing inside of your sales organization. That’s why we approach every client engagement using our 4D methodology… guaranteed to help you cut through the clutter, identify your sales problems and resolve them.