If you hire the wrong salesperson, it’s going to cost you a lot. Research shows that high-tech companies lose as much as $2 million+ per year on a bad sales-hire. Even in a market flooded with candidates, if you fail to hire top salespeople, you will incur costs.
You incur these costs in:
- pointless training,
- wasted salary and benefits,
- lost sales, and
- eroded market share.
You not only lose money, if the person is really bad, you may also damage your company’s reputation with potential customers for years to come.
If folks know it’s important to hire right and expensive to hire wrong, why don’t they do a better job? Below are six reasons many companies fail to hire top salespeople.
1. No Defined Hiring Process
Hiring the right way is hard! Most companies don’t have a plan in place to do it right. Many companies lack a proven hiring process and waste time on a disorganized, complex, and ineffective system. To hire top sales performers, use a clearly defined hiring process. We have an infographic on the best process for hiring successful salespeople. Once you have a process in place, monitor your hiring practices. Measure your results to determine what’s working and what’s not working.
Harvard Business Review reports that only about a third of companies measure how well their hiring practices result in hiring good employees. Can you imagine a sales team not monitoring sales results?
Companies should set up a system to track each sales hire’s performance back to the hiring process. If a company cannot track its results, it should follow the research on best practices for hiring top sales performers.
2. Inaccurate Promotion of the Job
To find top sales performers, don’t start the process by writing a “we have a sales job opening” post. Start by determining what it really takes to be a successful salesperson, sales manager, or sales VP in your market and for your company.
While many sales job descriptions list criteria such as length of industry experience or level of education, these requirements don’t predict success in sales. Companies such as Facebook, Google, and other top firms recognize the poor connection between applicant experience and success.
Facebook, Google, and similar companies look for folks with the right attitude and aptitude. Managers at these companies recognize the best hires are often folks lacking stated criteria such as education, experience, or other credentials. These companies use the adage of “hire for attitude and train for skills.”
Many companies write a job posting that reads like a standard job description or they search the internet and copy a description they like.
If companies produce job posts this way, they write boring, inauthentic, and unintentionally misleading job ads. The job post needed to attract a salesperson is very different from your traditional ad.
3. Poor Approach to Sourcing Candidates
Some companies haphazardly source sales candidates. After you define your ideal salesperson’s characteristics, determine the best sources for your sales candidates.
We informally surveyed 200 sales managers and asked them where they found their best sales talent. Here is a rank order list of best sources they reported:
- Referred to us (47%)
- Worked for a competitor (14%)
- Responded to Online Ad (12%)
- Contacted directly by the sales candidate (9%)
- Came from internal promotion (4%)
- Worked for a supplier/service provider (3%)
- Recruited from a university (3%)
- Came from a customer (1%)
Not surprisingly, the research shows that online recruiting (from job boards, job search engines, and social media) accounts for 72% of all externally sourced hires. Therefore, you must build up a strong online presence and brand. Get a copy of our Guide for Hiring Top Salespeople for more information on ideal sources for sales candidates.
4. Gut-based Selection Process and You Will Fail to Hire Top Salespeople
Research shows most individuals responsible for hiring subconsciously make a go/no-go decision in the first five minutes of each interview. That barely gives candidates enough time to make small talk before the interviewer has sealed their fate.
What is it about gut instinct that makes it so ineffective? This practice favors style and likeability over substance, objectivity, and hard data.
If you just trust your gut, you’ll make crappy decisions in selecting salespeople.
Many companies rely on the sales manager’s gut-intuition to select candidates, resulting in a predictive validation* of only 20%. Gut instincts are unable to predict about 80% of success on the job. (*predictive validation refers to how well the assessment can predict an individual’s future performance)
When hiring managers select salespeople based on gut, they ignore more valid selection factors. In sales staff selection, this means companies wind up hiring costly under-performing salespeople who flame out in 3-6 months.
It’s a brutally competitive environment for most companies. If your company does a better job of selecting sales staff, your team can crush your competition.
5. No Up-front Assessment
Most companies use resumes (or online applications) as their first step in screening sales applicants. If you rely on these steps, you will be unable to predict an applicant’s success on the job. Resumes have a predictive validity of only 18%
You can increase your ability to identify high-performing salespeople by as much as 91% by using:
- a Multi-Measurement test designed specifically for selecting salespeople, or
- Multiple tests, based upon what is important to measure in a salesperson.
Use assessments specifically designed to predict sales performance.
You can use personality or behavioral assessments to determine your candidates’ social styles, work styles, how to manage them, or how to communicate with them. However, these assessments will not predict an applicant’s ability to hit quota.
For example, some companies use personality and behavioral assessments such as Myers-Briggs Type Indicator (MBTI) and DISC in selecting salespeople. The developers of MBTI state that they did not design this tool to use in hiring or to predict employee performance. Companies should use behavioral assessments such as the MBTI and DISC after they hire employees. Get a copy of our free Guide to Sales Assessments.
6. Lack of Structured Interview
All companies know strong sales results require a great sales team. Yet most companies still use unstructured interviews when it comes to selecting sales staff.
In an unstructured interview, the interviewer does not set questions in advance. It has a predictive validation of 20%. A structured interview is an interview where the interviewer creates a particular set of predetermined questions in advance. It has a predictive validation of 35%.
In a highly structured interview, the interviewer uses predetermined questions and a rating scale to measure and compare candidate answers. For these interviews, interviewers receive training on how to interview and recognize interview bias. Structured interviews have predictive validation of 57%.
Do this and you will hire stronger salespeople every time!
Success Also Requires Great Onboarding
Of course, don’t forget about the importance of Onboarding. You can have the best process for selecting top sales performers and still fail if you use a flawed onboarding process. To get more information on how to avoid these six mistakes, visit our page listing sales hiring resources. We provide free guides on how to assess, hire, and onboard the best salespeople.