Despite the fact that the economy has been in the tank for quite some time, more than 2 million Americans voluntarily leave their jobs every month according to the U.S. Department of Labor Bureau of Labor Statistics. According to The Society for Human Resource Management (SHRM), average employee turnover across all industries is about 13%. However, turnover among sales reps is nearly double that, at 25.5% according to CSO Insights. So what is it that makes a sales rep much more likely to leave?
1. No opportunities for advancement – LinkedIn recently conducted an "exit survey" of 7,350 members across five countries. What they found is that the number one reason workers left their jobs was that they wanted greater opportunities for advancement. In many cases, employees may not be fully aware of the formal programs their company has in place to promote and retain people in-house. Another recent LinkedIn survey found that just 25 percent of the departing employees knew of their company’s opportunities for advancement. Therefore, promoting greater awareness of these programs may be enough to increase job retention among your salespeople.
2. Poor management – There's an old career adage that best-selling author Marcus Buckingham said, “People don’t leave jobs, they leave managers.” Sales managers have gotten a bad reputation because of some of the tactics that they use to get results. Some are known as bullies who use intimidation to get sales reps to perform. Others are micromanagers who hover over the shoulders of their sales reps, watching their every move. Moreover, some sales managers only care about making themselves look good, while having no concern for the success of their salespeople. While there are tons of great sales managers out there, there are just as many who drive top sales reps to look for better opportunities. If you want to keep your sales reps, provide them with quality management.
This may seem like a tall order, but the basics of quality management are within reach for most people who are committed to it.
A. Be clear – Your sales reps should know and understand what your expectations are, when you expect them to be met and how you plan to measure their success.
B. Be empathetic – Salespeople are expected to show empathy to clients and prospects, but as managers, it’s your job to lead by example, by showing empathy to your sales team. If a sales rep is struggling, don’t berate them, take the time to mentor them.
C. Be fair –Give away more credit than you take, and be sure that your feedback is based on activities that can be objectively measured.
3. Compensation caps – One of the greatest benefits of becoming a salesperson is the idea of unlimited income potential. Traditionally, when it comes to sales, the harder you work, the more you sell the more money you make. However, there are times when the finance department decides that the salespeople are making too much money and decide to put a cap on their earning potential. This can severely demotivate a salesperson and cause them to seek employment within organizations without such restrictions.
4. Lack of training – According to the great Peter Drucker, “Training and development must be built into a company on all levels – training and development that never stops.” It’s imperative to invest in your salespeople. Not only from the start, via an efficient onboarding program, but also by way of continuing education, because the smart salespeople want to keep improving. Training must be considered an investment versus and expense. When a salesperson feels that their company is invested in their success, it results in less turnover.
5. No administrative support – Let’s face it, sales people hate doing paperwork, they hate entering data into the CRM system and they hate scheduling appointments. The average salesperson spends 23% of their time on administrative tasks, taking away from the valuable time that they could spend on closing sales, which reduces their income potential. A salesperson with a PA taking care of all their admin tasks has greater earning potential, increasing their job satisfaction.
What’s the true cost of a lost sales rep?
Cornell University researchers found that the cost of turnover could be up to 38% of an employee’s income.
By estimating each sales rep’s salary at $50,000, if it costs 38% of that to lose them and hire someone new, you're talking $19,000 wasted per person. For a company of 100 sales reps, with a turnover rate of 25.5%, you’re looking at a staggering loss of nearly half a million dollars annually.