Sales positions still rank among the hardest positions to fill, according to Yahoo! News. Many salespeople don’t stick around very long after being hired, and the notorious turnover rate in sales means that companies often lose money spent on onboarding and training for new employees.
It’s hard to find a single way to calculate the money lost in sales turnover, but it can range as high as 200% of an employee’s annual salary. New hires don’t even make a lot of money while they’re around. Typically, 20% of sales people produce 80% of the business, which means that the leftover 80% (usually new hires) only bring in 20% of business.
Looking at these numbers, it’s easy to think that the high turnover results mostly from hiring bad salespeople, or from some kind of scarcity of good salespeople.
But he turnover rate is high for a number of reasons--and surprisingly, it’s not because existing sales reps just can’t cut it. According to a recent survey of departing sales reps, 32% were leaving because of bumpy relationships with their first line managers, 27% were leaving because of inadequate pay, and 21% were leaving because there weren’t enough opportunities for promotion.
This implies that companies are hiring and losing good employees along with bad ones. Often, you can find both the best and worst salespeople in jobs that are commission only. The best salespeople enjoy commission because they can earn more that way. The worst salespeople bank on the fact that they’ll be paid purely on results, since no one can complain they’re paying them more than they earned.
It’s easy to fall into the trap of hiring commission salespeople like this who, on paper, won’t cost you much, but only one in 50 deals are struck after a first meeting, and your mediocre sales rep is likely to be one of the 44% of people who give up after just one “no.” An estimated 80% of non-routine sales will only occur after five follow-ups, so you could be missing out on big clients by keeping that poor salesperson around.
According to a recent study out of Harvard Business School, top sellers accept 100% of responsibility for their results. They possess above-average ambition, drive to succeed, and customer empathy; additionally, they don’t take all those no’s personally. Looking for individuals like this and focusing on keeping them will usually result in a much stronger sales team.