4.6, 4.5, 4.3, 4.2, 4.1. These may look like judges’ scores in an athletic competition, but these figures actually represent a sampling of recent US unemployment percentages, which have been steadily declining for some time. The most recent unemployment rate of 4.1% is the lowest in 17 years. While this is encouraging for job seekers, it is worrisome for employers seeking to attract and retain strong sales talent to hit their revenue targets.
Headlines like these…
“Employer’s Hustle to Retain Job-Hopping Workers”
“Companies Seeing a Significant Increase in Employee Turnover Rates”
“US Workforce Expected to Experience Massive Shift” (thousands of baby boomers retiring daily)
… are forcing employers to re-think their attraction and retention strategies.
For those wanting to attract employees with bachelor’s degrees or Millennials, the situation is even worse, with unemployment for college grads only at 2.0% as of October 2017, and Millennials (and now Generation Z) coming into the labor market with very different expectations regarding their jobs and careers than previous generations.
We have found that many of our clients are struggling with higher turnover numbers, and do not have complete oversight into how much sales force retention can negatively impact their top and bottom lines. Outlined below are some of the most common and impactful consequences:
- Open Territories – Leaving territories open and accounts uncovered can weaken existing customer relationships and serve as a welcome mat for competitors to come knocking and poach your business. Temporary coverage is one counter tactic, but comes with its own risks, as sales people and/or managers are stretched thin.
- Business Disruption – Many of our clients with high turnover talk about how their key sales people become targeted by former colleagues who have moved on to other companies, how they lose institutional and customer knowledge, and how morale for remaining sales people declines and affects productivity.
- Replacement Costs – Investment in recruiting, training, and ramping a new hire to the level of a lost former star can run as high as 150-200% of that person’s total compensation.
What can you do to avoid unwanted talent losses? Given that Millennials will shortly be the dominant segment of the US workforce, it pays to understand what “they” are looking for. In a variety of surveys, it boils down to: career advancement and new skill acquisition (at a much more rapid pace than previous generations), work variety and workplace flexibility, fair pay, frequent feedback and recognition, and a social aspect to work. And the use of the latest technology in the workplace is a given.
Below are some of quick tips to consider:
- Competitive Compensation and Mix of Short and Long-Term Incentives: This is a constant challenge, but if the perception is that you are less competitive than the alternatives (and not just in your industry), you can expect your sales talent to vote with their feet. Also, creativity is key to success. Sprinkle in short term contests and incentives, dangle some additional pay for sticking around as well as performing well, e.g., a small bonus for hitting quota 2, 3, or 4 measurement periods in a row, publicly recognize those with acknowledgements and gift cards for experiences they can share with others in the sales force.
- Skills Training and Clear Career Path: Be transparent about what your sales people can expect in terms of development and growth in your organization. Show that you invest in your talent, but make it clear those investments are tied to those who perform and stay with your company. Personal growth opportunities, skill development, and promotions resonate strongly, particularly with millennials. Promotions may be just from one level sales representative to another, with a slight pay and title change, but offering these on a consistent basis can make your sales people think twice about leaving.
- Continuous Performance Management: Millennials, in particular, do not want to wait for a year-end review to understand how they are performing. Give them real time observations and feedback from ride-alongs, schedule regular touch-base sessions with your team, encourage cross team best practice sharing. These are all things you might already be doing, but expectations are likely that all of these tactics should occur more often, with technology to facilitate.
Bottom line, keeping your high-performing talent around is a lot less painful, expensive, and detrimental to your business than watching your talent walk off to other opportunities, and the key to successful talent retention is awareness and execution of tactics as described above – Good Luck!