Not only that, but firms in the United States spend more than $15-billion annually training new salespeople in order to replace those who have left companies. When you add in the loss of revenue these salespeople would have been bringing in, it’s clear that high sales team attrition has a significant impact on an organization’s bottom line.
In this post, we’ll explore some of the top reasons for turnover on sales teams, the impact of sales team churn, and provide tips and guidance for retaining your top sales talent.
Reasons for sales attrition
Issues with onboarding
Since the beginning of the global COVID-19 pandemic, sales teams have had to significantly pivot the way they approach business. While traditionally they would meet in-person with potential and existing clients, they’re now forced to build relationships and trust with their clients through purely remote channels such as video calls, phone calls, or email.
These changes resulted in more time being spent on duties such as data entry and paperwork, which resulted in the average rep only spending about one-third of their time actually selling. As a study from Sales Research & Insights found, however, sales professionals who spend at least four hours on selling activities are happier in their role. It’s clear that spending less time doing the work they want to be doing can have a detrimental impact on engagement levels for any sales team.
Compensation and benefits
The impact of sales team churn
Recruiting and training costs
Increased turnover means more work for a number of departments across the business. For example, the HR department will dedicate much of their time to creating and posting ads, discussing salaries and expectations with hiring managers and company decision-makers, sorting through applications and resumés, screening candidates, facilitating negotiations, and preparing contracts.
Once the candidate is hired, they undergo onboarding (usually led by HR teams in conjunction with the individual’s manager), training and coaching sessions, business information meetings, one-on-one meetings with countless individuals across the organization, and more.
Decreased customer satisfaction
If you find yourself loyal to any business, chances are that the people who work there have a huge impact on your choice to go back time and time again. The same rings true in sales.
Sales reps work hard to build and nurture mutually-beneficial relationships with their clients. It takes time to establish trust and develop the connections with their clients that drive them to purchase a product or become a loyal, long-time customer.
However, when a client suddenly can’t reach their designated sales representative of more than a year — the person who understands their specific pain points and needs — and now has to start all over again with a new salesperson, chances are their perception of the business will suffer. If a client goes through this multiple times with the same company, this negative sentiment may materialize into frustration, disappointment, and the decision to no longer do business with the organization (or even follow that sales person to a competing solution).
When a salesperson leaves your organization, you don’t just lose their skills, you lose their connections and the revenue they generate for the business. As author Anthony Chaile explains, “It would take five years for a company to recover from the loss of a 25-year veteran that has unique knowledge and connections selling in [their specific industry].”
Not only do you lose the direct revenue this individual was bringing in annually, there are financial costs associated with lost opportunities. If someone has mentally checked out and has made the decision to leave, they’re not going to be going the extra mile to hit quotas or pursue new sales opportunities for the business. Plus, if the remaining sales reps are required to fill in the gaps and take responsibility for the exiting sales rep’s leads, this happens at the expense of them seeking out new accounts of their own.
When you take the loss of direct revenue and add it to the costs associated with recruiting and training a replacement, losses in productivity, and losses in opportunities, it’s clear that the financial impact of sales team churn is monumental.
High salesperson turnover has an undeniable impact on team morale. In addition to potentially feeling sad about a well-liked team member’s departure, remaining employees may feel frustrated if they’re required to pick up the slack left by their teammate.
Plus, if their teammate has left for a job with higher compensation and more career opportunities, chances are that will inspire other employees to reflect on whether they can do the same — which can then result in even greater turnover rates.
How to retain sales talent
Set clear goals and expectations
Provide continuous feedback
Related to setting clear goals and expectations, receiving constructive feedback from management helps sales reps stay on track and feel more engaged. According to Gallup, employees who receive “meaningful feedback” are almost four times as likely to feel engaged than those who don’t. And, as we know, employee engagement is a huge factor in sales rep retention.
One way to ensure consistent and effective feedback is through what Forbes expert Stephen Diorio calls a “closed loop feedback system”. This type of process “tracks the adoption of training by reps, the effectiveness of that training in practice, and the specific areas reps need more coaching and reinforcement.” Through a defined feedback system, managers can help their sales reps feel supported and motivated as they grow in their careers.
According to The Society for Human Resource Management, more than 68 percent of survey respondents agreed that employee recognition helps create a positive workplace culture and positively impacts retention and recruitment. Additionally, research from Quantum Workplace found that workplaces with formal recognition programs have 31 percent less voluntary turnover than those without — and they’re 12 times more likely to have stronger business outcomes.
In order to experience these benefits, take the time to implement an employee recognition system at every level across your organization. In addition to classic manager-to-employee appreciation, ensure there’s a way to facilitate peer-to-peer recognition and recognition from other teams and individuals within the business. While the praise can be both private and public, it’s important that recognition is always genuine.
- Weekly awards (with small prizes such as $25 gift certificates) that are given from employee to employee based on a job well done
- Performance bonuses awarded based on achieving stretch goals and quotas
- A consistent compensation adjustment and promotion program
- A team Slack channel specifically dedicated to shoutouts and notes of appreciation
- Rewards for the entire team based on achieving a collective goal
- Whatever else you can think of that will show your team you appreciate and recognize their hard work
Provide coaching and training opportunities
Coaching your sales team is one of the most effective things any manager can do to improve retention rates. Companies that provide formal coaching to their sales teams see their annual revenue grow 16.7 percent more than those without any kind of sales coaching or training framework.
However, not all coaching programs are created equally. A CSO Insights study found that 75 percent of organizations waste money on inefficient and ineffective coaching efforts.
- Use collective intelligence to inform areas of opportunity and to measure effectiveness of your coaching
- Employ a mix of formal (expert-led programs, etc.) and informal (one-on-ones, peer-to-peer learning, etc.) coaching methods
- Coach according to a defined, standardized structure but leave room to customize your approach for each sales rep’s unique strengths and weaknesses
- Use a results-based approach and ensure you understand each team member’s specific and measurable goals
- Collaborate with your team throughout the entire coaching experience
Listen to your sales team
Ignoring the concerns of your sales team members is a surefire way to push them out the door. While it’s important to provide each of your sales reps with regular feedback, it could be even more crucial to allow (and encourage) them to give you, their manager, constructive feedback as well.
By creating safe spaces where sales reps can share their feedback and opinions, managers let their team members know that their voices are heard and valued — something that contributes to a greater sense of engagement and involvement with the organization.
Use a collective intelligence tool like ThoughtExchange to create a culture of open communication and trust within the sales team. With ThoughtExchange, a manager can pose a question to their team, such as “What is the biggest obstacle to your day-to-day job?” Sales representatives can then anonymously answer, and in doing so help their manager uncover issues and pain points they may not have even known were there. This also helps the manager notice any patterns in responses so that they can prioritize the biggest roadblocks their team is currently facing.
ThoughtExchange can also be used by managers as a way to seek out solutions to problems from their team. While a manager has their own area of expertise, they aren’t in the everyday work as much as their team members. Their team members probably have innovative ways of solving problems, or suggestions for organizational improvements, that haven’t been considered yet. This makes their reports’ ideas and input extremely valuable when it comes to improving different aspects of the business.