The Cost of a Bad Sales Hire

Too often today in sales, when an opening is available, there is a scramble to get the position filled quickly.

The ability to hire new people who can succeed is a challenge. According to the latest CSO study of over 3000 hiring sales managers, over 50% believe they “need improvement” in this area. It is noticeably harder than it was just last year. The previous years Sales Performance Optimization study figures for Needs Improvement in hiring, were 43.1%. In the latest Sales Performance Optimization Sales Force Demographics Analysis it was reported that the sales force turnover rate is hovering at 17.1%. In addition to replacing those open sales positions, 65.4% of the firms are planning on adding net-new sales positions this year. These numbers added together can be a significant increase in salespeople and, with that increase, more pressure on sales management to get it right when hiring. Now is clearly not the time for hiring effectiveness to be slipping.

The cost of a bad sales hire can range from $50,000.00 to well over $100,000.00 and we have found that interviewing for proven skills vs. proven results minimizes that risk. Selecting from the best choices reduces your investment risk and increases the likelihood of a successful new hire. B2B companies need to carefully evaluate prospective sales reps in these often overlooked criteria:

  • Territory and Pipeline Development– What processes does the candidate use to develop a robust and high-quality pipeline?
  • Compelling Conversations– What does he or she do to create a business conversation that has substance and value?
  • Business Value– How does the rep create, quantify and articulate the business impact of a solution vs. the technology?
  • Negotiations and Closing– How does the candidate set up the initial offer to the prospect – and explain their framework for negotiations?

The results on revenue and quota accomplishment can at times be exaggerated, whereas interviewing for the skills required to accomplish the results cannot.

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