Every organisation has had ‘the spoilt cup of tea’ when it comes to hiring once in their organisational life-cycle.
Ask most people about what bad sales hire costs and they immediately start ranting about the hiring costs (including recruitment, training, and onboarding compensation.) But are we even looking at the bigger picture?
Most CEOs and those in sales management will quickly spout hiring costs and stop there.
While certainly expensive, for the most part, hiring costs are fixed. They are “one and done”.
Those who are data-driven understand that a bad sales hire represents far, far more than one-time sunk hiring costs. More so, a bad sales hire represents a permanently-damaged future revenue stream.
At the end of the day, a sales team is only as good as its weakest link. Thus, if the sales chain has a weak or tentatively disastrous link; no amount of better team members can make the ship sail through.
The Domino Effect of Bad Hires
We’ve been droning about the possible consequences of a bad hire, but are we vary of the actual metrics to which it is killing the organisation?
No matter what industry you’re in, hiring mistakes cost a lot of money—about 20 per cent of an employee’s salary, or $6,000-$15,000 for an average worker. For specialized or senior employees, replacement costs can be astronomically higher. But if you see the problem in detail, the financial cost is just the tip of the iceberg. Threat lies just beneath the layer, influencing important metrics like employee productivity, efficiency, and engagement.
Consider the failing of such systems after the hiring a bad salesperson:
Lower morale and productivity
Bad hires may simply be incompetent, or they can be the dogs with loud barks and no bites. Both can leave managers and colleagues visually and mentally frustrated which in turn hinders them in the accomplishment of daily tasks let alone structuring the team better.
When you have the wrong person in sales, people notice. More so externally than internally, as sales is the first point of contact for every company.
These situations if left unaddressed stimulate co-workers in questioning leadership’s ability to judge who is right and wrong for the team, causing dissatisfaction in all areas of their work.
Lost in Line, Lost in Time
Getting your hands on a new employee is a significant investment of time. From figuring out what you really need to evangelize the role, to sourcing to interviewing and negotiating, every step of the process takes time – especially when properly executed.
So now that your Sales Leader has fired the bad hire, the whole process restarts. Yes! The whole nine yards of walking through the new process, realigning organisational and hierarchal roles, straining an already stressed team.
All of the time which should have been put in making the delicate sales process a bit more robust and process oriented. Sales today are rarely as simple as pursuing the end consumers until they budge.
At the end of the whole ordeal, your organisation—from the sales leaders to your sales floor— will spend significantly more time trying to solve the additional problems the employee creates than on the productive tasks at hand to make it truly “rain”.
Time is money, and no time is a loss of revenue
Although it’s cliché, the phrase “time is money” is spot on, here.
On the low end of the cost spectrum, it’s estimated that losing an employee costs the same amount of six to nine months of that employee’s salary. Without even considering the cost of missed opportunities, a bad salesperson can be expensive. The outlay of recruiting, advertising, training, interviewing and paying wages could amount to the price of a new car or even a new house.
The Bad Hire Quagmire
A recent survey by Robert Half showed that one-third (36%) of 1,400 executives surveyed felt the top factor leading to a failed hire, aside from performance issues, is a poor skill match. The second most common reason (30%) was the organisational fault, clarity in terms of performance objectives.
“Wrong Hiring” occurs because hiring managers and human resources people do not communicate well and confuse the job description with the job criteria.
Often, form the workforce who are actually on the job, you’ll hear an entirely different description of what it takes to perform the necessary tasks than what’s posted in the job definition. That’s why it’s important to involve those who are actually doing the job in writing the description.
Unfortunately, the hiccup usually occurs when recruiters and hiring managers mistake those feel-good experiences for talent.
Too often, personable candidates simply do not have what it takes to be successful in sales in the long-run. Instead, they start out strong and then fizzle out because they are not driven, are too impacted by rejection or cannot compete with other sales representatives.
An online sales assessment can objectively measure your candidates to filter out the ones that are least likely to succeed within your company and can reverse the bad-hire churn permanently.
The 3 Meals to keep you from killing your company
The good news is the cycle of hiring unqualified or unmatched individuals can be broken. All you need is a comprehensive recruiting strategy.
Focus on what you want. After hearing about all of the financial downsides of a bad hire, your first reaction might be fear. There’s so much that can go wrong in the hiring process, but if you fail to look at the flipside, the organisational value can never recruit the salesforce you need to succeed.
Understand what makes a salesperson succeed at your specific company, and then recruit someone off that benchmark. A data-backed, research driven yet credible assessment around sales can be your best-friend in need here.
Spend time training and coaching. All too often, companies write off a high turnover rate, but this shouldn’t be the case. One possible reason for your tentative bad hire can be your own fault of not training him/her well; they don’t understand how to have success in the role, so they become upset and unsuccessful.
Stay defensive; keep them in hand as it will help with the overall turnout and final conclusion in the longer run.
Keep everyone up-to-date. Living in a dynamic world, but we don’t always cater to the ever-changing nature of our lives. Companies are often busy trying to navigate the current market overall and competing priorities, so taking the time to disseminate the details to their sales team often falls to the wayside.
So, now that you know what can go wrong with a bad sales hire and how to avoid it, but how will you decide the way forward? Let’s start with not doing something that we’ve already failed at and then expect a different result, begin by small yet sustainable changes on a granular level which will ultimately lead to a world-class sales organisation.
So, what does a great sales candidate look like?
The results may surprise you.
It is not always the most charismatic or most experienced candidate in the pool.
Rather, successful sales representatives are those who exhibit dexterity. They all exhibit the impending need for achievement, the desire to do well regardless of the situation.
If you are fed up by a cycle of poor sales recruits, some extra steps in your hiring process will make all the difference.
Imagine knowing a person’s potential even before he enters the room for an interview. Everything he says during that meeting will confirm or deny what you have read in his resume and in his testing results.
Well, bye-bye ‘gut feeling’ and hello to the new age. It’s easier, try it.
By using a well-developed sales assessment test as part of your regular hiring process, you will know which candidates are most qualified to move forward in the interview process and most likely to be lasting producers in your company.
The Secret Sauce to The Perfect Dish: How do you hire the perfect salesforce?
Too much of text and no takeaways, let’s give you a brief.
– The most important asset any business or any organisation has is its people.
– Holds true whether you have a small company or manage a department within a business employing hundreds or even thousands.
– Taking non-scalable actions and short-term objectives might make your next hiring spree, the end of your department. Period.
Avoid bad hiring mistakes by using every tool you can leverage during the sales hiring process. Let your current team know they are appreciated.
Take the time to make sure all future candidates exhibit the KPIs required and start building a long-term strategy for your team’s future success.
(The author is an HR Consultant)
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Same should hold true for managers inside organisations.
How many sales leads did you predict from this coverage, Tonmoy?