How the sales industry should develop a long-term talent strategy
By Richard Hilton, Managing Director EMEA at Miller Heiman Group
November 1 2018 - Finding the right talent for your organisation can be a tall order due to the increasing demand of skills for various job roles and the sales industry is no exception. According to new research from CSO Insights, the research division of Miller Heiman Group, less than a quarter of sales professionals believe hiring is an organisational strength, which impacts their workforce, as just 16 percent said they had the talent needed to succeed in the future.
One reason is that while marketplaces are changing rapidly, hiring strategies remain unchanged and ineffective, leaving sales organisations and departments with a talent crisis. Its time sales leaders audit their recruitment approach, analyse their top performers in order to find the right candidates and re-prioritise the criteria they should be looking for alongside HR. As well as focus on formalised onboarding and training programmes to retain employees.
The cost of talent gaps
The talent gap caused by ineffective recruitment, hiring and training can leave some sales territories under-served for over a year. According to CSO Insights Sales Talent Study, the average sales position is open for 3.7 months and then it takes about 9.2 months before new hires mature into full productivity. This means that it can take over a year just to fulfil one role.
At the same time as facing slow recruitment, attrition currently sits around 15.7 percent on average; where 10 percent is voluntary and 5.7 percent is involuntary, which presents more costly problems. And simultaneously, 64.1 percent of respondents indicated plans to grow their sales force by an average of 8.9 percent in the next 12 months, once again increasing the pressure on finding skilled employees.
If we look at a sample case, let's say you have a 100-person sales force and a 15.7 percent attrition rate, then you lose 16 sellers. With projected growth of the industry at 8.9 percent this means in addition to replacing losses you will need a net of 9 sellers as well. This brings the total you need to 25 sellers, or a quarter of workforce! Now more than ever, talent gaps need to be addressed.
So, what is it that organisations are looking for from their sales team?
HR and sales operations disconnect
If we isolate the sales industry as an example case study, hiring profiles for a long time have always included the following 'tick boxes': a business or college degree, relevant sales experience, and high emotional intelligence.
However, when CSO Insights asked sales leaders about what they believed led to success in these job roles, many factors in the hiring profile like education and past experience were found to be less relevant; despite the criteria being a potential disqualifier for potential candidates during recruitment. Herein lies our first disconnect and one that HR and sales operation leaders must converse more about, otherwise great candidates will be slipping through the net.
Taking a deeper look at education for hiring profiles, 36.6 percent respondents indicated they want a candidate with a business degree from university, 27.7 percent would take a college degree of any kind, and 19.4 percent selected a STEM degree (Science, Tech, English, Maths). However, as a whole only 9.7 percent of respondents said education was a factor that leads to success.
Past experience rated higher at 30.4 percent. With 57 percent of respondents saying they wanted a person with sales experience specific to the industry they are applying to, 20.5 percent selected general sales experience, and 14.2 percent said industry experience that didn't need to be sales.
Finally, when asked about sales candidate attributes, 52.8 percent respondents said emotional intelligence and interpersonal skills we're in their top three priorities. This was followed closely by problem-solving and analysing thinking skills (44.5 percent).
According to sales leaders the top five factors they believed lead to success are:
- Knowledge - about the industry, product, and company (62.8 percent)
- Skills - presentations, questioning, interpersonal, analytical (60.2 percent)
- Intangibles - work ethic, EQ, attitude (51.9 percent)
- Execute - ability to execute a sales process (39.5 percent)
- Experience - past experience (30.4 percent)
If sales leaders are not communicating this to recruiters and human resource departments in order to change their hiring profiles, then this can be detrimental to the bottom line for organisations. Especially when you consider the costs associated with unsuccessful new hires and that entire sales teams could be changed within two years with current rates of attribution and growth.
Developing a talent strategy
Often time isn't taken to plan a strategy that includes both human resources, learning and development teams, and the Chief Sales Officer. But sales leaders need to own the identification, recruitment, retention, and enablement of talent as part of an overarching strategy.
Sales moved from art to science a decade ago, and hiring is moving in the same direction. Organisations should analyse their high performers and use a quantifiable assessment to determine why they are on top (including the propensities and intangibles). This then puts companies in good stead to formally assess candidates against that profile to mirror the best sellers.
It's encouraging to see that more than half of organisations in the same CSO Insights research (55.7 percent) have started down this path, deploying predictive assessments in the hiring process and another 13.4 percent planning to implement this in the next 12 months. Those that use these tools consistently show superior attrition, confidence in talent and quota attainment compared to those not using such tools, which every sales team should strive to achieve.
Consistency it what's key. Like any data-driven initiative, there needs to be ongoing refinement and calibration for them to provide any value. In fact, hiring assessment tools can be used throughout the entire lifecycle of a salesperson, offering quantifiable insights that can be useful in succession planning, development and transition activities.
Keeping your talent happy
The first significant experience a seller has with a new employer is an onboarding program and this is a fundamental driver of effectiveness. CSO Insights found organisations with strong onboarding reported new hires reached productivity two months faster than those with weaker practices.
There should also be a formalised approach to coaching and training. Many of the customers I work with that have this in place say it directly impacts win rates and quota attainment. Working with consistent strategic sales methodology helps here as it guides the actions of every seller in the organisation in the same way, helping them to prioritise deals, get coaching where required, and manage their time in order to develop a winning strategy for each deal to improve conversion rates.
Sales talent isn't an easy issue to solve, the questions of who to hire, how to find them, and how to help them live up to their potential and stay in the organisation will always remain. But if organisations adopt an integrated talent strategy with data-driven insights at the heart instead of an inconsistent collection of practices then they stand a good chance of retaining employees.
With the right approach to talent development strategies, sales leaders can accelerate transformation within two years. This includes a clear vision of how talent fits into an overall sales strategy, improved collaboration with human resource and learning and development teams, a data-driven systematic approach to the best talent and formalised processes to the job at hand.