If you hire a salesperson who stinks at the job, how much is it going to cost you?
The most obvious expense is the lost sales. Every day that a sub-par salesperson stays on the job, the company will be missing out on opportunities. Prospects will choose the competitors over you, and existing customers may defect or place smaller orders.
Eventually, you’ll come to your senses and realize that you need to replace the poor salesperson, and that will be expensive as well. According to the Society for Human Resources Management (SHRM) it can cost “50 percent to several hundred percent of employee salaries” to replace a bad hire.
Making matters worse, there are also some less obvious costs that you might not consider. Having just bad salespeople on the team can affect the entire organization in four key ways:
- They can weaken your company’s competitive position. In B2B markets, customers and prospects who choose not to buy from you are likely buying from your competitors. That means every time you lose, your competition wins. Over time, that can shift the market dynamics, making the competition look stronger than your company, even if they offer an inferior product.
- They can create a terrible impression of your company amongst the prospects in their territories. Psychologists say that while first impressions are very important, “last impressions are more important.” They call this the recency effect. For sales teams, it means that a prospect’s most recent interactions with you are going to make a bigger impression on them than all their previous interactions with you. In other words, one bad sales call can counteract years’ worth of good impressions. It could take you years to get back on a good footing with a particular prospect. If you multiply that out across a territory, it’s easy to see how one bad salesperson is can have a lasting impact on your business.
- They can cause problems for the people who have to support them. In a recent report from Robert Half, 95 percent of those surveyed said that a poor hiring decision affects the morale of the team. When someone is bad at his or her job, people notice. Everyone who interacts with that person—admins, sales ops, marketing, and lots of others—will be impacted by his or her incompetence. If the problem is severe enough, some may even choose to leave the firm.
- They can cause resentment and discontent amongst the competent salespeople. The morale problem is often especially pronounced among your best salespeople. Everyone likes to be on a winning team, and when one person isn’t pulling his or her weight, the rest will notice. If your salespeople have low morale, that could lead to further lost sales, exacerbating the entire problem.
So what can you do to avoid bad hires?
Every hiring manager makes mistakes on occasion, but there are things you can do to minimize the risk. The SellingBrew training guide Assessing Core Sales Skills in the Hiring Process talks about some easy and cost-effective ways to weed out job candidates who don’t really have the sales skills you need. While some of these methods do a cost a few bucks, spending a little money upfront could help you save tens or even hundreds of thousands later on.
Assessing Core Sales Skills in the Hiring Process
Relying on first-impressions, intuition, and gut-feel is just too risky when hiring salespeople today. This guide explores new options for infusing more objectivity and science into the process of finding good salespeople.
