Imagine that 20% of your IT staff quit tomorrow. Would you panic? How about your management leaders? HR staff? Most of us would. But when it comes to sales reps, 20% is on par with the average according to CSO Insights. Every industry and every role expects turnover, but replacing 4 out of every 20 people you hire gets expensive fast.

In our last post, we talked about how sales turnover impacts your top and bottom line. If we go with an average replacement cost of 150-200% of an employee’s annual salary, it’s easy to see how a 20% turnover rate can cost your company millions of dollars in a short period of time.

And it raises an important question: What’s behind high sales rep turnover?

Many organizations have become desensitized to high sales rep turnover, partly because they plan for attrition. In some companies, it’s expected that 1 in 5 (or more) of the sales people you hire won’t make it. But what’s behind that number? Why do we see higher rates of attrition in sales than we do in other parts of our companies?

Let’s take a look at some common reasons:

Ineffective Hiring

Hiring for the right fit isn’t always a priority in recruiting—but it should be. Great salespeople possess key skills and expertise that often take years to hone. If your hiring process focuses only on outcomes without emphasizing competencies and cultural fit, you’re going to see higher turnover. That’s why an effective hiring process will not only fill positions quickly, but also fill those positions with the right talent. Here are some specific ways a faulty hiring process can undermine sales rep retention:

  • Insufficient pool of high-quality applicants
  • Failure to attract and engage the right kinds of candidates
  • Poor candidate experience
  • Lack of a reliable talent pipeline

Ineffective Onboarding

Ramp-up times have been edging higher over the past several years, with 40% of companies reporting that it takes longer than 10 months for a sales rep to reach full productivity. One way to reduce that time is to shore up your onboarding process with structured learning, front-line coaching, continuous feedback, and mentoring.

Not Accounting for Various Performance Levels

Turnover rates vary among sales reps at different performance levels, and it pays to know your rates for low performers as compared with top performers. For example, high turnover among low performers with low potential may not be cause for concern. High turnover among your sales superstars, however, should prompt a closer look at compensation plans, incentives, and advancement opportunities.

Insufficient Marketing Qualified Leads (MQLs)

Lack of support from the marketing department or misalignment between the two departments can leave your sales reps frustrated and overworked. Sales and marketing should agree on what constitutes a qualified lead, and sales should be able to count on quality MQLs so they don’t spend inordinate amounts of time prospecting. Without the right support from marketing, your sales team’s morale will take a hit and that’s a contributing factor to high turnover.

Poor Management Styles

It may be a cliché, but it’s still true: people leave managers, not companies. Poor management styles create tension among team members and fail to motivate employees. Take a look at your exit interviews and employee feedback as well as turnover numbers by team to determine whether a specific manager may be creating retention problems.

Lack of Opportunity

If your high-performing sales reps have a history of high turnover, you may not be offering them enough incentive to stay with your company. We touched on this above, but it’s worth digging a little deeper to understand how you can motivate your top performers to stay with you. For example, do your star sales reps have a clear path for advancement, or do you hire most of your managers from outside the company? Do you have a competitive compensation plan? Do you provide leadership training? Do executives understand what’s going on in the day-to-day operations of the sales department?

Sales success depends on two critical factors: talent and performance conditions. If you get both of those factors right, you can expect to see an improvement in your turnover rates. In a future post, we’ll take a closer look at how you can reduce the cost of sales rep turnover by making strategic changes to your hiring and onboarding processes. Stay tuned!

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