Traditionally, a great interview with a sales director often leads to a decision to extend an offer that is based more on gut-feel, rather than on knowing the prior behaviors of the candidate that drive their true performance.  If you cannot decipher what those behaviors are for your sales candidates before you hire them, you risk hiring the wrong salespeople, leading to an immediate impact on your organization’s revenue.

How do you Hire the Best Sales Pros from the Start?

Hiring the right sales representatives is challenging, particularly since candidates for sales roles are well-attuned to selling themselves to just about anyone.  However, when it comes to selecting the highest producers to fill your open sales positions, as a sales leader you must be able to see through some of the “smoke and mirrors” that some candidates can conjure-up during the interview process.

Traditionally, a great interview with a sales director often leads to a decision to extend an offer that is based more on gut-feel, rather than on knowing the prior behaviors of the candidate that drive their true performance.  If you cannot decipher what those behaviors are for your sales candidates before you hire them, you risk hiring the wrong salespeople, leading to an immediate impact on your organization’s revenue.

The Challenge

In reality, it is not easy to screen for candidates who are missing the additional skills and behaviors required to be successful in sales in the long-term, such as being process-driven, assertive, empathic, methodical and disciplined.

Specifics about the person’s ability to achieve sales targets in past positions is one of the best indicators of future success, yet even if such information is provided by the candidate in the interview, at a minimum it needs to be corroborated by former managers.

The Impact of Hiring

Every hiring decision is important and worthy of careful consideration.  Hiring a salesperson has both significant and long-lasting implications, because:

• Salespeople have a direct tie to revenue performance.  Hiring the wrong person means quotas get missed, and then your bottom-line suffers right away.

• High sales turnover leads to diminished impressions.  The sales rep is often only one of a select group of professionals who serve as the face of your organization.  High sales turnover leads clients to assume that other areas of the firm are unstable, like customer support.

• Poor hiring decisions have a long shelf-life.  Consider that it can take a few months for a new salesperson to be fully trained.  Then, it can take several more months to recognize sub-standard performance, particularly in industries with long selling cycles.  By the time any performance issues are documented and corrective actions are pursued, a year might have passed.

There are several tools that help companies assess the total cost of making a poor hiring decision, from capturing all the costs associated with processing a separation, to hiring and training a replacement, to losing productivity and business.

For a sales position, the most thorough calculators also point to the costs associated with:

–          Net profit on lost sales.

–          Time sales support spent being distracted by the situation.

–          Customers that the failed salesperson has alienated.

–          Prospects that the failed person has alienated.

–          Lost referrals from alienated customers and prospects.

–          Wasted expenses for travel, cars, laptops and phones.

The Hay Group, a management consulting firm, takes a conservative approach by estimating that the cost of replacing employees ranges from 50- to 150-percent of the position’s salary2.  With a median salary of $88,000 for a technology sales representative in Philadelphia, Pennsylvania, for example, that approach would equate to a replacement cost ranging from $44,000 to $132,000.  However, this expense is just one part of the total picture for sales positions.

Peak Sales Recruiting, a leading executive search firm for sales positions, calculates the costs associated with hiring a bad salesperson as nearly seven times the annual salary for the position3.  This scenario assumes that the person achieved 50-percent of his quota in the first year on the job , had a base salary of $100,000, and took into consideration the cost of hiring, compensation and benefits, travel and expenses, training, overhead, severance at time of departure, wasted leads, lost customers and lost margins.  For the technology sales representative mentioned above, the cost of the bad sales hire would be $616,000.

In addition, results from a recent poll taken from a best practices webinar hosted by a major sales information source showed that 77% of sales leaders measured sales turnover costs by including the salesperson’s salary, the cost of lost sales while the position is vacant, and related general costs calculated by the HR department4.

A New Way to Find Sales Talent

There is a new approach to hiring that allows sales directors to capture the real story about a candidate’s behaviors and past performance directly from those who have worked the closest with them – their references.

Observations of the person’s abilities and performance over time are available from the candidate’s managers, peers, subordinates and customers.  Yet, practically speaking, meaningful feedback has become increasingly difficult to obtain from these references.  In many cases, references are hard to reach through the phone, and outcomes from any conversations often reveal little more than prior employment dates.

In fact, research from the Society for Human Resource Management shows that 96% of HR professionals do check employment references, yet less than 25% of those checks are able to produce information beyond employment verification.

The good news is that the game is changing, and as a sales director you can leverage this change to your advantage.  There is a new opportunity for you to uncover pivotal information about your sales candidates, before you even interview them yourself.  With newfound anonymity using web-driven technology, sales leaders can take five minutes to gather feedback from a candidate’s references through a survey that is delivered to the reference over an electronic platform.  This platform preserves the confidentiality of the references and releases all parties from liability threats.

As a result, references will report on your sales applicants’ behaviors and skills in candid detail.  Over

85-percent of references respond to a reference request when asked to do so through a confidential electronic survey.  This method can enhance your partnership with the human resources department, or it can stand alone as part of your sales recruiting process in your office.

Adoption of these behavioral surveys is growing rapidly, and best practices for reference-checking include using scientifically-validated surveys that probe on attributes and behaviors that correlate specifically with success in a sales role.

One such solution has gathered multi-source (managers, peers, direct-reports) reference feedback from thousands of people for the position of sales manager alone.  The feedback from these thousands of references (based on an average of 4.7 references per candidate) reveal that many, yet not all, sales candidates are prepared to contribute to your sales team’s success in the long-term.  Leveraging this reference feedback to hire a winning sales manager or sales representative for your team is now a best practice.

Ideally, these surveys should ask a reference to rate a candidate on his or her:

• Ability to consistently meet or exceed sales goals
• Persistence when faced with objections or other setbacks
• Competencies in managing post-sale relationships
• Determination in locating qualified sales opportunities
• Ability to leverage technology for productivity, as with a CRM system

When the surveys are administered prior to the final interview, the results can guide the interview itself, allowing the sales director to press further into certain areas.  And, the results can be easily reviewed across multiple candidates through a composite view.  Sales directors can compare candidates on a variety of skills and behaviors to select the best candidate – before making an offer.

Reference feedback removes much of the guesswork from the hiring decision, providing lower turnover and higher revenue for the sales team.  For instance, Fortune 500 firm Quest Diagnostics found that a reference-checking platform utilizing these surveys resulted in a 90-percent retention rate for sales representatives during their first year on the job5.  This retention rate is likely correlated directly with Quest’s ability to gain insights into the quality of their sales candidates by leveraging feedback from references before hiring them.