Tl;dr - Low turnover is only desirable if the sales team is near perfect. That's rarely the case. Yet turnover remains low because recruiting and hiring are barriers. Improving the sales team's performance, and continuous recruiting to fill gaps are important steps in revenue growth.
Is Low Sales Turnover Desireable?
Turnover is expensive, particularly in complex big-ticket capital equipment sales. The hiring process takes time - time that no business and sales leader has. It costs money. Onboarding is resource intensive, and ramp-up carries significant direct and opportunity costs.
So, sure, low sales turnover is great, provided everyone is performing.
That's not usually the case. We're humans. People who were amazing sales performers at one point in their careers may be coasting on reorders and not developing new business. Prospect behaviors and expectations may have changed faster than reps' skills. Some people may have been hired with unrealistic expectations. Company cultures change.
Pareto predicts exactly what we see in most organizations.
And yet, even though many don't hit quota or fit the culture, turnover is nevertheless low in most industrial sales organizations.
And turnover is low for the wrong reasons.
That's a problem.
Companies with inadequately implemented CRM don't have reliable data for tracking performance against leading indicators. Often organizations which are lazy in that way are similarly cavalier about precision in the sales process, opportunity qualification, and accountability.
So turnover is low because they don't know precisely who's on the bubble, what needs to change, and who should be replaced.
|ai generated image by Dall E (prompt = "cubist style painting of a business executive reviewing sales resumes"|
Companies also resist firing underperforming reps because recruiting and hiring are time-consuming, expensive, and stressful. And it's often a crap shoot; there's little confidence that the replacement will be a net improvement despite the costs of firing, hiring and ramp-up.
So companies drag their feet. They justify this tolerance of underperformance often by perpetuating the myth that years of accumulated technical knowledge are more important than sales performance.
Deep, nuanced technical knowledge is valuable. But it's not sales skill.
Turnover should often be higher.
Improving Sales Performance Hinges Optimizing the Current Team
But....before we go further. Is it possible to optimize an existing team? Rather than fire and replace the 70% that typically miss quota?
Of course. And that should be the approach. You have a duty to those you've hired, even if in error, to help them succeed.
There are five steps that every company should take regardless of turnover.
- Evaluate - Every member of your team has strengths and weaknesses in specific sales skills and attributes. When you can measure these accurately, almost like an MRI, the underlying causes for success and underperformance become objectively clear. That will guide training, coaching, and decisions on the best role for people.
- Update the framework - You must have a solid sales process and methodology. More on the difference here. Sales process is often too loose. Deal qualification is too casual. Methodology is often undefined.
- Sales enablement - As buyers operate in the shadows, completing 70% of their buying journey before talking to reps, and as buying journeys lengthen and buying teams expand, marketing must support sales with enablement tools and content.
- Training & coaching - Top performers in any field embrace continuous training and coaching. Yet in sales, often, training is done infrequently and coaching is often just a discussion about pricing and competitive technical differentiation.
- Technology - CRM is just one of several tools that should be in your sales tech stack. And it must be properly configured and consistently used. That's rare.
These must be in place to give your current team a solid foundation for success.
And Then Building a Stronger Team
With those building blocks in place, you'll improve the performance of individuals and the team. Building a culture of accountability and performance will make it clear who's lagging.
And as you provide training, and coaching built around the insights from the sales evaluation, some will resist. Sales performance improvement plans will help a few to succeed. Others will need to be replaced.
There's a challenge, though. On the one hand, you understand that any replacement should have the potential to become your best rep. You should only hire hot shots, and you know that talent is out there somewhere. On the other hand, for many industrial companies with limited HR functions, recruiting and hiring fall to execs who are already overwhelmed. The prospect of taking more on feels like packing and moving homes, divorce, and root canal all in one.
The solution is to have a carefully engineered sales hiring process that optimizes efficiency and outcomes. With a great process in place, the execution is efficient, and even mid-size companies can recruit continuously.
When you continuously recruit, you can identify superb talent as folks are available, not just the best you can find when you need someone. Having a flow of candidates positions you to proactively make the sales management decisions that are right for the team, rather than compromises between poor performance and your bandwidth.
That's why many companies recruit continuously, as the WSJ recently described.1
Everyday Continuous Recruiting
Most mid-size manufacturers don't have a big HR department. What they have tends to focus on compliance and keeping production running.
Sales recruiting is left to the sales team and/or general management. It's accorded a low priority because it's unpleasant, time-consuming, and ultimately often just a guess that frequently proves wrong.
In order to recruit continuously, therefore, something has to change. You need a process that will enable an internal recruiting function that can be managed by a sales or executive admin person with a small time commitment. And one which requires very little time from leaders and executives.
Is that possible?
Sure. It just takes a carefully engineered process. Just like sales. Just like manufacturing.
I've written in detail about the sales hiring process here. The short version is that you need a clear set of steps, great job postings, minimal administrative management, and specific, limited management requirements. The only requirement of sales leadership and management should be an occasional block of time for brief (10 minute) phone interviews, occasional (perhaps 2-3/month) 45 minute Zoom interviews, and in-person interviews and reference checks for candidates you're ready to hire.
That's about two hours/week of admin time, four to five hours/month of management time, and $500-1,000/month in job posting fees.
The key, though, is an accurate sales candidate assessment tool. When you have a tool with statistically predictive reliability of assessing actual sales performance (not gregariousness, honesty, intelligence, or other personality/bahavioral traits) then you can operate a compliant process that supports DEI initiatives and limits time spent to only candidates who actually WILL sell. This saves enormous time wasted wading through inflated resumes and conducting worthless interviews.
Concerns About Continuous Recruiting
The WSJ article referenced above raised some potential concerns. After all, its subtitle referred to "ghost postings."
Let's look at those. But first, a question.
Many of you have had full order books for two years. When you're manufacturing is scheduled out for nine months, do you cease sales prospecting? Of course not. You instinctively understand that things change, and therefore you must continue to prospect. Some orders may be canceled. Some customers may be acquired and projects put on hold. A competitor may have capacity and win an order on lead-time.
Just as you continuously prospect, you must continuously recruit. As the article noted, companies continuously recruit because they're "stocking a pool of ready applicants if an employee quits, or just in case an “irresistible” candidate applied."
What about the concerns?
Let's look at them from a sales perspective. (The article didn't necessarily specify the job functions for all situations.)
One candidate noted, "As part of her application, she put on makeup, a blazer and jewelry and sat before her computer and recorded answers to a series of automated job-interview questions, doing multiple retakes for each question before she was satisfied."
Another, "'It’s a waste of time,'....estimates that when he was job hunting in late 2021, about 20% of listings that interested him were posted and reposted without anyone evidently being hired. Since his layoff from a startup in August, he says he has noticed that most jobs that catch his eye have been up for months. 'I first thought of it as an anomaly, and now I see it as a trend.'"
Remember, in this article we're talking about hiring for sales. Roles in which rejection is constant. The pressure is strong. The need for preparation and rehearsal is obvious. And a role in which gratification is uncertain and deferred.
Even if you're hiring an account executive (field sales engineer in industrial lingo) they'll still have prospecting and target account sales KPIs. They'll endure weeks of high activity, time-consuming research, and silence/rejection between successes. They may work a couple of hours each week to finally book a target account meeting.
So, one possible reaction is to worry that some easily offended individual resents your posting. Another reaction is to embrace the fact that the process will work efficiently as it filters out folks who you wouldn't want on your sales team at all!
Quality - in Production and in Sales People
Companies used to check quality at the end of the production line. Now they engineer it in, and continuously improve the process through iterations of experiments.
In contrast, sales rep quality is still primarily measured against quota at the end of a reporting period...and then hedged because of long sell cycles and hesitance to endure the hassles of recruiting.
It's time to engineer performance into the sales function, just as in production and operations.
That requires tools, training, and a consistent flow of talent.
That means continuous recruiting. Using an ORE™ maturity model, continuous recruiting is a basic function of a proficient revenue growth effort.