What does it cost you if you fail to screen out the poor performer or the non-performer? We try to bury this hard cold fact every time we look for a new employee. Our wonderful optimism takes hold and we say to ourselves: "This time it will be different." Yet, we continue to use the same process don't we?
First we either like or dislike their looks, their tone of voice, their smile, their sense of humor, their experience, their education, or who they know. So why doesn't it work?
Let's face it: Every time you use the same processes and make a bad decision, it costs you real money. First, your hiring time, onboarding time, training time, and let's see…. Oh yes, you are paying them for all of this time. We all know time is money, but we just forget when we are trying to pull this new individual on board. Some say it costs a minimum of $10,000 while SHRM says it can cost the equivalent of one year's pay.
I'd say it costs even more with these hidden costs we often fail to admit.
Note: The first part of this article/blog was written by Jon Morse, recruiting coordinator for Luce Performance Group. Jon has been working with potential sales reps for 14 years with our company. I always say you can't train a non-salesperson to be a salesperson no matter what. I've tried many times and it just doesn't work. You have to have the right fit and you have to match up these sales reps profiles of great sales reps that you either currently have on your staff or have had profile assessments done on successful sales reps at your disposal. The following bullet points came from Jon. I will answer them based on what I see in the field. I'm sure you will have your own thoughts on these statements.
• Consider what the impact is on your other customers.
This is probably the biggest cost to your organization. It's also the biggest loss of credibility when you are turning over sales reps. I've gone into markets where the real loss of money easily would total over six figures annually on constant turnover of sales reps. I've also gone into markets where it's been a seamless transition where management has had a full bench to choose from and, in some cases, upgraded list distribution across sales reps and following the basics of account management which is putting your best reps in front of your best potential accounts. Seamless transitions mean hiring reps that are going to be the best possible fit for the job. Just hiring people for the sake of hiring them to fill a position is dangerous and they usually don't last very long. Therefore the loss of lots of money and credibility for your company.
• Consider yours and other's time lost.
In my experience, it typically takes two years to get our return on investment from the training and money we put into new hires. Two years seems to be the break-even point. If they blow out before that we lose money proportionate to that timeline. If they stick for two years or more we tend to get quite a return on our investment from our sales reps.
• Consider the emotional drain it has on you and your other team members.
It makes everybody look bad when you constantly have turnover. Some management-induced turnover from time to time is good and sets the bar for increasing performance standards. Sometimes it's good when a sales rep leaves for new ventures, as long as they have been there for more than your two-year break-even point. Other reps like reaping the harvest of ones who leave, and that in itself can prove disastrous if reps are provoking a non-team atmosphere. Cannibalism of reps and accounts occur and this leads to emotional drain, especially on management. Again, it comes back to hiring the right fit and right people for your sales job. Seems like the "right fit" is a constant here.
• Consider all of those missed sales.
Here's where the competition cleans up. They wait for you to keep turning over your staff so they can pick off the new clients your new, though short-tenured, reps put up on your website, radio/TV stations -- loss of sales and high attrition for you and your company. In some cases, when you don't have strong management to train your new reps, the competition, if they are good, wait for your new reps to become dissatisfied and they pick off your new reps because you don't train them.
Sean Luce is the Head National Instructor for the Luce Performance Group International and can be reached at firstname.lastname@example.org or www,luceperformancegroup.com. You can find Sean's new book The Liquid Fire on Amazon.com.