Why Sales Managers Struggle with Effective Hiring

By Miller Heiman Group | Future of Sales SuccessSales organizations face a paradox: although many continue to increase hiring, attrition is on the rise, according to our 2018-2019 Sales Performance Report, creating a major pain point.What’s the problem? Though sales organizations hire more sellers than ever to grow their business and compensate for losing salespeople, studies show that they may not be following hiring best practices: 84% of sales leaders say they lack the sales talent they need to succeed in the future.Our latest study, 2020 Trends in Sales Management, confirms these findings: more than three-quarters of sales managers (78%) struggle to consistently hire sellers who succeed, making hiring the most glaring weakness of today’s sales managers.How Hiring Affects the Bottom LinePoor hiring practices prove costly to sales organizations in many ways. It takes roughly four months to hire a salesperson and another nine months to get them up to speed. Missing more than a year of productive seller time hurts current performance—and it’s a weakness that produces compounding results in the future as well.If a sales position remains vacant for 13 months, a competitor may fill the gap, further undercutting the organization’s performance. Sub-optimal, much less bad, hires sap sales manager productivity, as managers then have to spend more time working with struggling sellers. As a result, the sales team becomes less efficient and potentially even resentful of new sellers who aren’t meeting their goals.Meanwhile, a sales organization without the data necessary to proactively manage its sales-force allows stagnating sellers to remain in roles for far too long. By the time they recognize that their poor performers lack the skills or capacity to improve, they’ve lost even more revenue. The longer it takes to exit poor performers, the longer it takes for the organization to reach full productivity again.How Sales Organizations Can Improve Hiring DecisionsSales organizations need to follow three key sales management strategies when it comes to hiring.

1. Develop a Data-driven Candidate Profile.

Only a few organizations use a current candidate profile to find new talent. Instead, many sales leaders rely on gut instincts when hiring: they look for candidates with industry expertise and characteristics such as assertiveness or emotional intelligence. Others try to find candidates who look like their top performers, but this is challenging for the overwhelming majority of sales organizations that don’t assess why their top performers are successful.Instead, organizations should take a data-driven approach using a variety of KPIs. World-class sales organizations use a combination of leading and lagging indicators to identify the optimal candidates to replicate. They avoid evaluating sellers solely on performance KPIs, such as quota attainment; they recognize that some top sellers may benefit from a mature sales territory or market trends. Instead, they focus on differentiators such as learning agility. Many also invest in a sales talent assessment to learn the true qualities driving their sellers’ success.

2. Use an Objective Selection Approach to Evaluate Candidates.

After creating a hiring profile, sales leaders and managers should look for candidates with the competencies highlighted in their profile and make the most of tools they have to support hiring. Fewer than one-third of sales organizations regularly use their hiring tools, and nearly 25% have tools but aren’t using them consistently. Our research found that organizations without any hiring tools outperform those who have hiring tools but use them inconsistently.

3. Make Hiring a Component of a Holistic Talent Strategy.

Closing the talent gap requires organizations to connect the four key elements of their talent strategy: recruiting, hiring, development and transition. Organizations that align all four elements under an overarching talent strategy that the CRO manages and measures find more success than those with disconnected practices. When sales organizations complement a data-driven hiring process with a comprehensive on-boarding program and a culture of continuous development, seller attrition drops—and sales results improve.More Hiring Is Not Better HiringWhen it comes to hiring, more is not always better. As sales organizations start to transform their sales management strategies, they should focus on improving their hiring process.