Sales hiring is not like any other type of hiring. For one thing, salespeople are the most difficult hires to get right. Tack on the need to be able to have an intelligent conversation about the technologies that are used in the security industry and business owners could find themselves spinning.
Unfortunately, the cost of making a hiring mistake is high.
Statistics indicate that the cost of making a bad hire is between three and five times that individual’s annual compensation. That means if the base salary for a new sales rep is $36,000 per year and the company is superior at cutting ineffective salespeople free quickly (say, after three months) then the cost of one bad hire is $27,000 at a minimum. That is a very conservative estimate.
If they were making $60,000 per year and kept them for six months before parting ways, then it might be more like $60,000 divided by two for half the year = $30,000 x 3 (the low end of average) = $90,000. If we multiply by 5 (which is on the high side of average), the number jumps to $150,000.
I suspect the true cost in the security industry is significantly higher even than that, when you take into consideration the amount of time and training that goes into an individual before you are even able to tell whether or not they will perform. Particularly with a product that is purchased infrequently, such as on a multi-year contract, you really cannot afford to have an inferior salesperson losing out on those fleeting opportunities repeatedly.
Why do many companies suffer from bad hires?
Common reasons are:
1.Most companies don’t have ongoing, steady recruiting efforts 365 days a year. Managers only recruit when they need to fill a position. Thus, they panic when they need to fill a spot, and frequently choose expediency over excellence.
Solution: Managers should always be recruiting—so the effort to build a strong bench becomes a constant. And rather than pushing exclusively to HR, managers should have some ownership of this function.
2. Most hiring managers rely too heavily on their gut instincts to make hiring decisions. Unfortunately, studies show that our gut instinct is only right about 14% of the time. Yikes!
Solution: Solve this challenge by using an objective process first before engaging in a subjective analysis. I suggest using the Objective Management Group battery of sales specific assessments to objectively evaluate candidates first, before anyone falls in love with them.
3. Companies lack appropriate onboarding programs. Many companies have new sales hires spend an inordinate amount of time in the monitoring center or with techs. Yes, I know that to adequately sell it helps to understand the service, but traipsing salespeople through the various departments of your company won’t cut it. Additionally, if you hire salespeople and they aren’t chomping at the bit to get out and sell, then you may have made a mistake.
Solution: Improve your onboarding program by clearly defining the expected outcomes for each phase of onboarding, whether it is reviewing the website or for making phone calls to set appointments. When the expected outcome is achieved — let the salesperson move on to something else.
4. Many hiring managers in the security industry place too much of a focus on technical background and knowledge when hiring sales reps. They will often forego a more talented sales executive that lacks a technical background in lieu of the more technically inclined candidate in hopes that they can teach the individual to sell. Oftentimes, managers are later let down when they learn that the technical person either can’t sell or won’t sell.
Solution: Only hire a sales executive who actually can and will sell for you. Certainly, a propensity for technology is helpful in many security sales roles, and by all means should be a criterion for the hiring of those roles. It is just important to remember that hiring sales talent is challenging for a reason- not everyone can sell. All of the technical knowledge in the world is useless if they are unable to make a sale. In other words, technical skills should not trump the ability to sell.