BY C. Lee Smith
Bad sales hires happen more often than anyone would like to admit. Sales positions can be among the most challenging to fill. One way to reduce the risk is to use behavioral assessments for hiring.
The Real Cost Of A Bad Sales Hire
Several studies have attempted to pinpoint the cost of a bad sales hire. We estimate that the average organization incurs a cost of around $130,933 to replace a salesperson. But that figure underestimates the impact on an organization when a bad sales hire begins to weaken loyalty and negatively influence other employees. Let’s consider the ripple effect across the organization.
Financial Costs
The financial costs of making a bad sales hire quickly add up. If a salesperson isn’t making their numbers, the manager may decide to send them for additional training. Often, sales training programs are run by outside consultant and come with a cost. And if the sales rep loses an account that another professional in the organization could have won, the financial cost becomes glaringly obvious.
Operational Costs
Sales professionals come with an immediate impact on operational costs. Their direct pay, along with the associated employee benefits, such as health care, hit the bottom line on a regular basis. If the employee isn’t effectively selling, they are not contributing as expected to the organization.
A bad sales hire may also not work effectively with the marketing department. All the leads generating by the marketing team should be followed up on quickly. These leads are expensive, especially if they came in as the result of a paid media campaign. Great leads are usually time-sensitive. As soon as a prospect begins to engage with another vendor, it will be become more challenging to interest them in a competing product.
Cultural Costs
A sales professional with superb selling skills can still be a wrecking ball in an organization. An individual who doesn’t fit well with the company or the team can negatively impact progress.
Yes, they may be a sales star. But are they disrupting the department with “glory hogging” behavior? If they frequently brag about how great they are, other sales reps can become quickly demoralized.
In some cases, toxic sales reps may deliberately position themselves to obtain the best sales leads. Some of the blame in this scenario goes to the sales manager. But this type of unfriendly behavior on the part of sales reps can quickly poison the work environment.
Often, good sales professionals will leave an organization if the sales manager doesn’t try to control the bad hire. Our research shows that at least 60% of sales professionals have encountered toxic employees or managers. In many cases, they end up leaving the organization.
Damaged Company Reputation
After multiple employees leave a company, job seekers begin to notice. They’ll hesitate to apply for a position, especially if previous employees post disparaging remarks on social media. In a competitive hiring environment, there is a real cost to having a bad company reputation. Without great new hires to onboard in their department, sales managers face a crisis. They will not be able to reach their sales goals for the year.
Poor Customer Satisfaction
A bad hire in the sales department can also lead to reduced customer satisfaction. Customer service personnel play a key role in maintaining solid relationships with existing customers. A great experience will result in the relationship being continued.
It’s the primary responsibility of customer service reps to connect with customers who reach out for assistance. If these reps don’t possess sufficient empathy, they may fail to maintain the relationship and the organization may lose valuable customers.
Legal And Compliance Risks
Once a sales manager begins the process of offboarding a bad sales hire, the legal costs mount. They may need to spend time documenting how the bad hire has failed to meet the job requirements. And after the offboarding, they may face a lawsuit. Even if the lawsuit has little chance of success, the organization will incur legal costs.
Why Traditional Hiring Methods Fail For Sales Roles
Traditional hiring methods include a resume review, application review, an interview and a check on references. Managers rely on all these resources before they make an offer and start the onboarding process. When making a sales hire, objective information is required. Because, unfortunately, sales jobs are among the most difficult to fill.
Here’s why hiring for this position is so difficult. A successful sales professional must possess a unique combination of hard and soft skills. These individuals must understand the mechanics of moving a prospect through the sales funnel. And they should have empathy, critical-thinking skills and positivity.
During an interview, candidates will promise they can excel in all the desired job responsibilities. Sales professionals routinely seek to influence buyers. In the hiring process, managers take on the role of a buyer. And in that role, they may make an emotional decision based on how they feel about the candidate.
Making an emotionally charged decision is one of the biggest reasons that traditional hiring methods fail.
How Behavioral Assessments Reduce Bad Hires
Asking candidates to take behavioral assessments can add objective data to the hiring decision. The best behavioral assessment tools have been designed by professionals and fully tested to remove bias from the hiring process.
The end result is that managers can quickly learn who the wrong person might be for their open position. Behavioral assessment tools such as TeamTrait provide a comprehensive profile of an applicant. Hard and soft skills receive a numeric score, making it easy to compare candidates.
Hiring managers will see which candidate excels in the most important skills and traits. In some cases, the data will confirm what a manager may suspect based on a resume review. In other cases, the information may prove surprising.
That’s when a manager can use the results to ask in-depth questions during the interview.
Not every organization and manager is ready to embrace a sales hiring tool. They may believe that candidates won’t want to take assessments. Or they may pride themselves on their flawless intuition and proven hiring record.
The decision to add assessments to the hiring process should come from the top. Leaders may want to share examples of how their assessment use improved their hiring decisions.
Process
Leaders should also form a team tasked with developing a process that incorporates using pre-hiring assessments. In most cases, candidates should be asked to take assessments after their resumes have been reviewed.
The assessment data can form the basis for determining who to interview.
In addition, leaders should insist on a no-exceptions rule. Managers can consider the favorite candidates of team members or co-workers. But they should be required to review the results of assessments, along with other inputs, when they make their final decision.
Conclusion
The true cost of a bad hire is hard to measure. Each bad sales hire can negatively impact the manager and the organization in a different way. It may not be immediately apparent that the wrong decision was made. But sooner or later, leadership will recognize what has happened and will need to address the issue.
Using a sales candidate assessment can help managers reduce a potential million-dollar mistake.
