Unwanted turnover on a sales team can be a fatal blow to achieving revenue goals. Unfortunately, many sales managers still have the mindset that turnover or “churn” is to be expected, especially in rookie sales positions. I couldn’t disagree more. Not only shouldn’t it be expected, it shouldn’t be tolerated either. If you are a sales manager with a high turnover ratio (or the manager of someone who does) you need to find out the reasons and quickly. Not only does this churn cost you thousands of dollars in recruitment and training costs, and untold thousands of dollars in lost opportunities costs, but it also is damaging to morale and makes your company look bad in the eyes of your customers.
So, back to the original question, is the sales manager hiring the wrong people or is the sales manager the problem (or both)? To find out the answers, here are the questions you need to ask…
1. IS THERE ANYTHING HAPPENING IN THE MARKET THAT COULD LEGITIMATELY BE THE CAUSE OF AN INCREASE IN TURNOVER? Is your turnover significantly higher than your competitors? Have there been any major changes in the market or your industry?
2. ARE YOU DOING EXIT INTERVIEWS? YOU MUST! An exit interview should be done by an HR representative for every salesperson who leaves, whether the person is fired or leaves voluntarily. Or, you can use an online service to do this. (Questionpro.com is one that is free and has exit interview templates you can customize.) You need this information to help diagnose and get to the root of the problem.
3. ARE YOU DOING 360 SURVEYS WITH EXISTING SALESPEOPLE? This is an important tool in revealing many potential problems before it’s too late. Again this can be done online and anonymous with free tools such as freeonlinesurveys.com. The following questions are ones that will help you determine whether you have a hiring problem or a management problem, and where the issue(s) may be:
- Did you receive the initial training and onboarding needed to be successful in the position?
- Do you feel you are getting the on-going managerial coaching and training you need?
- Do you have the tools and resources to be successful in your sales role?
- Are you recognized for excellent performance?
- Is poor performance addressed and confronted quickly?
- Do you feel you have a career path with the company?
- Do you feel you are continuing to develop your professional skills and knowledge?
- Was your compensation package presented to you accurately?
- Has the company and your manager lived up to what you expected when hired?
- Are you proud of what you sell and do you feel the company has a solid reputation in the business community?
- Do you believe your manager is invested in your success and can help you achieve your goals?
- Does your sales manager meet with you on a regular basis and communicate information you need to know?
4. ARE YOU PAYING YOUR SALESPEOPLE APPROPRIATELY? You need to analyze your comp plan and consider the following questions:
- What is the likely amount a salesperson will make the first year under this plan?
- Is this competitive with what the salesperson could make with an industry competitor? What about a sales position with another industry?
- Are you asking the salesperson to take all the risk?
- Is the comp plan designed to launch the person successfully or is it full of potential roadblocks?
- Is the comp plan straightforward and easy to understand?
5. ARE YOU SETTING AND MANAGING EXPECTATIONS IN THE INTERVIEW PROCESS? Starting a new job is fraught with stress coming from all areas of a person’s life. The last thing you want is for that new salesperson to feel he was misled (whether intentional or not) about the position. The sales manager must make sure she is 100% transparent about the pros and cons of the job, what the salesperson should expect in the first 30 days, 6 months, one year, and very clear about what expectations the manager has of performance. This should be continually reiterated in each interview and spelled out in writing in the offer letter.
6. ARE YOU FOLLOWING A SET HIRING PROCESS DESIGNED TO FIT TALENTS TO TASK? This means having a set hiring process in place which is specifically designed to identify a person’s talents and skills; then determining if those are a fit for your sales position. The following is the process I use and have found to be effective:
- Define the sales position. What exactly will the salesperson be asked to do? What are the requirements of the job?
- Based on the above information, what talents, skills, and experience does the salesperson need to have on day 1? What are the skills you are willing to train for? This doesn’t mean describe your “IDEAL” candidate. This means list the “deal breakers” those competencies the person MUST have to be considered and those that you would “like” but don’t have to have.
- Based on those requirements, vet every application you receive against those and only proceed with candidates who meet those requirements.
- Do preliminary phone interviews FIRST with those candidates whose applications/resumes you have vetted. The phone interview should be 20-30 minutes and you should use a prepared list of behavioral based interview questions. (see related article “My 25 Favorite Salesperson Interview Questions”) Every person you phone screen should be asked the same questions so that you can fairly assess the answers and stay in EEOC compliance.
- Do face-to-face interviews with those candidates who have “passed” your screening interview. These in-person interviews should also be comprised of a set list of behavioral based questions that are the same for each candidate.
- Do reference checking and background checks at this stage. Don’t wait until you’ve decided on one candidate only to find out the person has something in his or her background or former job that knocks him out of the running. Use an online reference checking system like www.Checkster.com. (see related article ”5 Steps For Getting real Information From Candidates’ References”)
- The candidates should interview with a minimum of two people in the company. Ideally interviews should include the sales manager, the sales manager’s manager, an existing sales person, and an H.R. or manager from a different department that interacts with sales. The interviewer should take specific notes on the candidates’ answers. Then all interviewers should give their evaluation of the candidate to the sales manager or fill out a candidate evaluation form.
- Use a validated, PREDICTIVE, sales assessment for final candidates. Sales assessments are key to increasing your successful hires. Only 14% of sales people hired based on only interview information are successful hires. A good sales assessment should boost that number to about 80%.
- Evaluate ALL the information you have on a candidate before offering the position. This includes interview information, reference checking information, sales assessment results, and of course your “gut instinct.” This is referred to as the 30%-30%-30%-10% rule.
7. DO YOU HAVE AN ONBOARDING PROGRAM IN PLACE? Even if you’ve done everything right in the hiring process up to this point, if you don’t have a well-designed onboarding program you are setting your new hire up for failure. Research shows that salespeople get up to speed 51% faster when a company has an onboarding program. Onboarding includes not just outlining first day or the first week, but the first 30 days and beyond (see related article “Steps For Keeping Your New Sales Hire From Circling The Drain” for onboarding tips).
8. DO YOU HAVE AN INDIVIDUALIZED COACHING PLAN FOR EACH SALESPERSON? It is the sales manager’s responsibility to develop a salesperson’s talents and skills through coaching (see related article “Tips For Coaching Your Salesperson”). To effectively coach you must first know what those specific talents and skills are (the sales assessment should tell you that) and then have a plan in place for how you will best manage and develop them. A coaching plan should include at a minimum the following information.
- Goals we have agreed upon and date to be achieved
- The salesperson’s expectations of me the sales manager
- My expectations of the salesperson
- Top 3 motivators
- I should remember NOT to do
- Likes recognition in the form of
- What salesperson likes best about sales
- What salesperson like least about sales
- Long range career goals
- Key strengths/weaknesses
- Growth area salesperson would like to develop and how I will assist
All of this information should be discussed in the first days after the new hire begins the job and should be updated every 6 months.
Infographic: What Mis-hired Misfires Cost You