The Keys to Recruiting, Ramping, and Retaining Selling Talent
We recently completed due diligence on a company that was struggling to grow and scale its sales team. Half the reps they hired were gone within six months and even longtime sellers were leaving in higher-than-usual numbers. The company simply couldn’t hire enough of the right people who could, over time, become successful and build revenue. At the same time, it was taking longer and longer to ramp up new reps to productivity. Taken together, the lengthening ramp time and increasing rate of attrition were having a devastating impact on both the top and bottom lines. Despite being in a market that was growing, the company was unable to keep pace with that growth almost entirely due to its inability to attract and retain sales talent.
Unfortunately, the situation is not an uncommon one. More and more, we find ourselves in conversations with CEOs, particularly in the technology industry, who are scrambling to find and keep sales talent. We’ve seen companies lose 80% of their talent following an acquisition. In Silicon Valley, it’s not unusual for firms to lose 25% or more of their sellers every quarter.
These kinds of numbers are damaging on many levels. A five percent increase in sales rep attrition across your sales team can increase selling costs 4-6% and reduce total revenue attainment by 2-3% overall. For low growth and low margin companies ten points of salesforce attrition can wipe out revenue plans and margins if nobody picks up the slack. The difference between a 5% attrition rate and 25% means cost an increase of over 50% in cost to sell and revenues drop by 20%.
In addition to the negative impact on selling costs, lost opportunity, and revenue goal attainment – the revolving door of salespeople can damage customer relationships. Constant turnover in account reps, especially when companies have failed to train and develop those reps into effective sellers, can cause many customers to defect to the competition. As word of customer dissatisfaction spreads through social media and other channels, it can lead to a wave of customer departures and erosion of brand image.
Why is it so hard to recruit, ramp and retain sales reps?
Part of the problem is the booming economy and job market in sales related fields. The economy has created 10 million new jobs in June of 2021, according to the US Department of Labor and Statistics (DLS). Another part of it is the propensity of younger workers – who make up the majority of the tech ranks – to move jobs more frequently. The DLS reports the median tenure of workers ages 25 to 34 was just 2.8 years, less than a third the length of those 55 to 64 (10.1 years).
But the problems go deeper than economic and demographic trends. “People are basically unhappy with traditional employment, according to Tim Brackney, CEO of RGP, a human resources consultancy. “While potential employees value being part of a traditional employment community and the skill development, mentorship, benefits, and income security that come with it, they increasingly feel overworked, and want flexibility and control over their work lives, geography and work mix,” according to Tim Brackney, CEO of RGP, a human resources consultancy. “As benefits erode, career paths require job changes, and traditional employment fails to offer the things employees value, then talent will move on.” That goes a long way to explain why 4 million Americans quit their jobs in July 2021 and 55% of people will likely be looking for a new job in the next 12 months. Most (56%) are leaving because they want flexibility more than they want pay and security. 54% say they are overworked. 39% say they are exhausted.
Despite all these headwinds, the crisis in selling talent is ultimately a process problem. Most organizations haven’t focused in a meaningful way on attracting, hiring and supporting new sellers through the productivity ramp. Typically, there isn’t a clear owner for this arc; it’s just something that happens. HR or a sales manager hires someone, sends them off to training and then sends them into the field to sell. In short, companies have created a “sink or swim” environment – and most new salespeople are sinking, or leaving.
How can growth leaders get control over the economics of recruiting, ramp and retaining selling talent?
To address the growing talent crisis in sales, companies must develop a distinctive capability around four critical competencies: attracting, recruiting, onboarding and nurturing talent. We believe business leaders need to think about a model for these capabilities just as carefully as they think about a go-to-market model.
We also believe the components of a successful sales talent model need to be closely integrated in order to develop a holistic approach to recruiting new sales reps and helping them become successful. We have found that focusing on improving six inter-related components can improve your effectiveness acquiring new hires, accelerating their time to productivity, and keeping them producing at high levels for a longer time.
- Treat the rep recruiting, ramp and retention cycle as a cross functional business process
- Offer new sellers a strong value proposition and better balance
- Offer a clear career path to sellers
- Provide more coaching, training and mentoring
- Reconfigure your day to day workflow to simplify and improve the seller experience
- Create measures that close the loop between seller activity, training effectiveness, and customer outcomes
These steps will dramatically improve the speed of ramping sales reps, raising the overall level of readiness and skill across the entire revenue team, and reduce churn to retain top talent that performs at a high level.
Treat the rep recruiting, ramp and retention cycle as a cross functional business process. Companies with the greatest success and lowest levels of turnover treat attracting, recruiting, onboarding and nurturing talent as a critical business process. This means the many organizations involved – sales operations, sales training, sales management, and human resources – need to be closely integrated in order to develop a holistic approach to recruiting new sales reps and helping them become successful. Having one executive responsible for this process and setting up a steering committee to govern it is critical.
Offer new sellers a strong value proposition and better balance. Sales reps want opportunity. Make it clear they will be given good territories and accounts early on. Burning out new reps on pure acquisition and bottom tier accounts only accelerate attrition. You’ve got to give new sellers real opportunities to learn on – a book of business that isn’t the cast-offs of high performers but is a set of real, high-potential qualified leads that will enable them to get their arms around what they are being asked to do and achieve their goals. This allows reps to focus on closing the business and builds positive early momentum.
Start by giving new reps sufficient compensation through a reasonable ramp-up period. Say your compensation plan is 60/40 variable; you might offer new hires 90/10 for the first two months, 80/20 for months 3-6, and have the regular 60/40 plan begin in month seven. This eliminates the “sink or swim” mentality, allowing a company time to nurture new sellers into strong swimmers before turning them loose in the pool of buyers. While “sink or swim” might have been the norm 20 years ago, it doesn’t work today and will be a turnoff to good candidates.
To sustain rep success, fine tune territory and quota plans to better balance the seller experience and success with revenue maximization and productivity to avoid rep burnout and failure. This is a common problem because territory and quota assignments developed using a “top down” process tend to treat all sales reps as uniform units of production and bias towards higher than reasonable revenue per rep. That’s a big reason why most reps fail to make their assigned revenue quotas, and a bigger reason why so many new reps drop out before they can become fully productive.
Offer a clear career path to sellers. Beyond coaching, talent management must become a core part of developing reps. Makes sure you have clear career paths with formal reviews tied back to training requirements and clear criteria for career advancement. “We view and treat our people as our biggest selling asset,” says Frank Jules, President of Global Business at AT&T who leads a global sales team that has the lowest attrition in the industry. “I’d say they’re our secret sauce. We invest in training, developing, and retaining our sales teams. They feel good about career advancement. We have great career-pathing. We say, “you own your career.” And we back it up. We’re very transparent on how to get from a level one, to a level two, to a level three–to keep it simple. Our jobs are advertised. We’re big on looking at a diverse set of candidates. To hire someone, the hiring manager first has to look at someone in our labs, our marketing, our finance teams, and even at our media business (Warner Media).”
Provide more coaching, training and mentoring. Coaching and mentoring are a primary driver of retention. 45% of employees would stay with their current employer if they offered more skills and training according to Monster. Our experience and research shows that salespeople who get at least one-half day a week, one-on-one, with their managers are twice as productive as salespeople who do not get this focused development time.
Frank Jules at AT&T reinforces the importance of training and development as a critical factor in rep recruiting and retention. “We invest heavily in training, and people feel good about it,” says Jules. “We tell them to get the next job, here’s what it takes, here are the skills you need and the courses you need to complete. If you check these boxes, and demonstrate your proficiency, you’ll get an interview. As a consequence, our sales churn is low. It’s very low. If you don’t invest in training and enabling your people, you wind up spending a significant chunk of resources dealing with rep churn, finding new reps, and ramping them. In the end, very few of them will develop into the top talent you need to outperform the competition.
The big problem has always been that sales managers have been limited in their ability to individually coach sales reps by their span of control and free time for sales call monitoring or “ride-alongs”. So they are only able to actively coach a limited number of reps. AI-enabled one-to-one coaching tools can act as a force multiplier that expands the coaching capacity of your managers. These tools take advantage of the ability to record sales conversations and use advanced analytics to compare them to selling outcomes and best practices in real time. This data gives a sales manager the ability to actively manage and coach many more reps and be there at critical points in the conversations such as common objections, competitive mentions, or signals of attrition. It also lets them understand what training has been adopted, and whether it is successful at changing customer behavior. This will accelerate how quickly new reps’ ramp to full productivity.
Reconfigure your day-to-day selling workflow to simplify and improve the seller experience. Seller stress is a big reason for attrition. Technology has become so complex that sellers complain about having to learn and use too many different systems, look up too much information, and spend too much time logging call reports. The proliferation of sales technology has made most sales technology “stacks” so complex they are creating more friction and work for reps instead of eliminating it. Employees struggle with software complexity just like customers. So, any investment that can improve user satisfaction and engagement will allow you to help sellers reach their full potential. “After years of supporting sellers with sales enablement systems at IBM, Red Hat and Lenovo, I’ve learned the key differentiator – and driver of value – always comes down to simplicity, intuitiveness, and user adoption in the eyes of the sales user of process or tool, says Greg Munster, the at Canonical. “When it comes to sales technology, you don’t want “BMW Price and Performance” but rather “Apple Elegance and Simplicity”. Simplicity contributes to easy and natural user adoption that does not overwhelm sales reps and is sustained over time.”
You can learn more about simplifying the seller experience at this link.
Create measures that close the loop between seller performance, training effectiveness, and customer outcomes. We recommend creating a closed loop feedback system that tracks the adoption of training by reps, the effectiveness of that training in practice, and the specific areas reps need more coaching and reinforcement. This is not as hard as it sounds. Most organizations can do this by integrating the sales readiness systems they use for training and development, with the sales enablement systems you use to support day to day selling with selling content, next best action recommendations and playbooks. All of these systems run on the same product training content and playbooks, and do a wonderful job of recording sales calls, tracking seller activity and the way clients respond. These can create concrete measures of compliance with training, how much they practice, and where they need specific help to improve. For example, the Marketing and Sales leadership at Ciena Network were able to integrate data from sales enablement and operations, marketing, and sales to create a dashboard that creates a dynamic and digital picture of how different players on their revenue team are engaging with the key stakeholders in the account.
You should also put in place measures of the entire cross functional recruiting ramping and retaining life cycle. This starts with measures of referrals, cost of acquisition and cycle time in recruiting reps. It extends to new hire satisfaction, time to productivity, and new rep engagement. These will provide key markers of success during onboarding and ramp. Evaluating new hires early and often allows managers to make quick decisions around investing and speeding time-to-productivity for “trainables” – or cutting losses on “untrainables.”
Measures of seller experience, progressive quota attainment and adoption rates will give you early warnings on where to put extra training effort and where to apply a “bear hug” to retain key talent. “Ultimately, eNPS – employee satisfaction – is the key enabler for revenue growth, profits, value creation and customer success,” reports Frank Jules. “You can’t generate revenues, profits, and enterprise value without engaged, motivated employees making it happen.”
You can learn more about how to integrate learning and development systems into a closed loop process at this link.
All of these recommendations and steps are outlined in depth in our blueprint for aligning revenue teams and the systems, processes and operations that support them entitled: Revenue Operations in a 21st Century Commercial Model.