Why don't we spend more time considering the consequences of making a bad hire?
The cost of a bad sales hire is phenomenal. Let's take a look.
To calculate the true cost of a bad sales hire you are going to want to know:
1 > The cost to recruit, on-board and train a salesperson.
2 > The average sales of your A players (top 20%), B players (average) and C Players (bottom 20%).
The true cost of hiring any Salesperson.
As a general rule, the accepted (conservative) cost of recruiting, on boarding and training a salesperson is around one full year's compensation.
For example, the true cost of recruiting, on boarding and training a salesperson for a role with a £100K OTE is at least £200K.
The true cost of missed sales by hiring a 'stone head'.
The opportunity cost of making a bad sales hire is where it gets a little more frightening.
An A player will typically out-perform your B Players by at least double.
An A player will typically out-perform your C Players by a factor of 5.
Following through our £100K OTE example:
Your A Players are achieving on average £1M sales per annum from a standing start over a 12 month period. The true cost of hiring an A player is still £200K but with a 5X return on investment in Year 1.
Your B Players are achieving on average £500K sales per annum from a standing start over a 12 month period. The opportunity cost of hiring an average sales person is then at least £500K. Therefore, the true cost of a hiring an average performer is £700K?
Your C Players are achieving on average £200K sales per annum from a standing start over a 12 month period. The opportunity cost of hiring a 'stone head' is at least £800K. Therefore, the true cost of a hiring an average performer is £1M?
These numbers might seem overly simplified, but they relate directly to more than one organisation I have worked with.
I won't share with you the Year 2 and beyond statistics, the Year 1 costs are frightening enough.
7 questions to ask yourself when interviewing sales people and 1 simple way to save yourself £M's.
1) Have they got the interview fundamentals right?
Take notice of how the candidate carries themselves. Did they come prepared? Did they have an interview plan written out? Did they research your company? Did they appear interested? Did they bring a list of things they wanted to cover? Did they take notes? Ask questions? Interact?
The fundamentals continue even after the interview.
A players follow up with every person they met in the process. They seek out feedback and seek to influence decisions positively.
2) How do they communicate?
Past history and job experience offer some clues to the individual.
Although, as my mentor continues to reminds me, 10 years of experience can often be more like 10 times 1 year of experience.
How did they manage the Bonding and Rapport piece at the beginning and throughout the interview?
This is a great sign-post to how they are going to handle Bonding and Rapport and build strong relationships with your clients and prospects.
3) Do they hold themselves accountable?
Do they understand the concepts of dependability and accountability?
Do they have good examples of how dependable they are? How they hold themselves accountable? Do they have an Accountabilibuddy, somebody they like to work with to help them stay accountable to the things they said they would do? How is that working for them?
4) How's their personal energy?
Sales requires a deep pool of energy and vitality. Soak in the energy of the candidate. Do they seem engaged? Are they asking great questions? What are their outside interests and inspirations?
Intellect is important, but intellect without passion is barren.
5) Are they Team Players?
"Why would anyone want you on their team?"
Sales is a team sport. Understand how they interact with others; can they enlist the support of others when it's needed? Will the team enjoy working with them for mutual successes?
Candidates that are good team players are more coachable.
6) Are they competitive?
Selling is all about driving and striving towards Goals.
You will want to know if they have a healthy sense of competition.
Evaluate them based on their past successes. How did they perform in their previous roles? Where they an A player, B player or 'stone head'?
How about outside of work? What do they do to become the best at their sport, hobby or past-time?
Are they making it clear that this is the job that they want? Are they talking to you about the next steps in the process?
A players move things forward.
7) How do they deal with rejection?
Sales is a rejection sport. It doesn't matter how much of a 'Sales Ninja' they think they are; they are going to hear 'No' at some point. Managing rejection without it breaking you is critical.
Candidates should be able to talk openly, credibly and professionally about how they deal with rejection. An example or two is important here.
You will want to understand how they deal with rejection. But more importantly, how they come back even stronger.
1 simple way to save yourself £M's when recruiting sales people.
Finding A Players is not easy.
There are a lot of things to consider.
Finding a strong candidate is a complex, time-consuming and costly process.
The use of pre-employment Diagnostic Assessments, will help you cut through the noise.
At Sandler Training Berkshire we have a professional and leadership pre-employment assessment library that provides in-depth competency based job profiles.
Additionally, many organizations elect to configure the specific profiles to their exact job and cultural requirements.
This level of competency detail allows employers to quickly identify top-performing candidates for a position and compare candidates’ scores against each other to quickly identify the highest potential.
Diagnostic assessments provide you with a proven science for assessing the behavioural aspects of your candidates at the professional, managerial and executive career levels.
To learn more about our sophisticated specific hiring and selection tools contact us at Sandler Training Berkshire.