July 23, 2015

Here Is Why Salespeople Leave and How It Can Cost You

Whether high turnover has resulted from failure to use a sales aptitude test to help you hire wisely, troubles with the company culture or something else, it is a problem that requires your immediate attention. High Turnover from Salespeople Leaving

After all, the cost of high turnover in a sales department can be quite staggering – both for your company’s budget and the overall morale of your team.

Thankfully, many of the common causes of high turnover rates can be avoided relatively easily.

Here are the top reasons companies experience high turnover in the sales department and some steps you can take to encourage your best salespeople to stick around:

 

Poor Management

You have probably heard the saying, “People do not quit jobs – they quit managers.”

This is definitely true in the sales department. No salesperson wants to deal with the constant stress of working for a bad boss, especially when he or she already has to deal with the stress of meeting sales quotas.

 

Here are a few reasons your salespeople might quit due to poor management:

Salesperson Facing Challenges that Often Lead to Sales Turnover

  • Micromanagement Overly controlling managers constantly monitor their employees’ activities and may even schedule daily (or too frequent) meetings to check on where their salespeople are in relation to the expected quota. This creates an environment in which salespeople do not feel that their judgment is trusted.
  • Lack of mentoring – Passive sales managers do not provide helpful coaching or show that they care about their team. Salespeople who deal with this type of boss are likely to become frustrated because the lack of mentoring hinders them from improving their skill sets.
  • Focusing on the wrong metrics – If your top-performing salesperson walked in two minutes late one day, how would you react? If you would make a huge deal out of it and take serious disciplinary action against her, then you are likely focusing too much on protocol and rules and not enough on long-term goals and the contributions of your top performers.

 

Here is how to stop your salespeople from quitting due to poor management:

  • Stop overly controlling behavior – When you allow your salespeople to have certain freedoms and treat them like adults, you indicate that you trust them, which helps build a healthy environment at work.
  • Build relationships – Be active about getting to know your salespeople without being intrusive. Show them that you care about how their career progresses by mentoring them and motivating them as needed.
  • Recognize achievements regularly – Be sure to pay attention to the accomplishments of your employees. Recognize and reward them when you can, especially when they have made a major contribution to the success of the team.

When you are managing a sales team, they should view you as their trusted advisor. You can have a great deal of influence on them, and your actions can even be a determining factor in their success.

Make sure you are leading your team to greatness – not resentment and career stagnation.

 

Compensation Changes

Sales managers typically affect how much money a salesperson can make by reducing salary and raising commission, raising the quota significantly or changing the commission structure entirely in a way that severely limits earning potential.

This sends a clear signal to the sales team, making them immediately think that the value they bring by generating revenue for the company is unappreciated. You can bet that your best salespeople will quit if they feel taken for granted and are underpaid.

To avoid this issue, make sure that your salespeople are well-paid. It is highly likely that you will receive a good return on your investment in the form of more revenue for your company.

 

Boredom/Lack of Career Growth

Unproductive Salespeople Lead to High Turnover in SalesGood salespeople are Driven – they always try to better themselves and will stop at nothing to reach their goals.

So, if a top-performing salesperson feels bored or begins to think that her career is stagnating, it is likely that she will search for a more fulfilling position elsewhere.

To avoid this issue, make sure that your salespeople have opportunities for career growth within your company.

If your salespeople are bored, try coming up with a challenge that pushes them to improve their skills.

 

Company Culture

It is no secret that day-to-day sales activities can be a bit draining. If your company culture is dull and does not have much to offer, you may find your best salespeople leaving to work somewhere more fun.

To help keep your salespeople happy and engaged in their work, promote an exciting company culture. Here are a few ideas:

  • Sales contests – By planning a strategic sales contest, you can drive results while encouraging your sales team to perform at a high level.
  • Incentives – Offering incentives doesn’t have to involve spending a lot of money. You can reward your salespeople with gift cards, office gadgets, desk toys or games to keep them motivated to sell more.
  • Company events – Plan some lunches, parties and employee celebrations (for birthdays and/or achievements) to show your appreciation and give your salespeople a chance to relax.

By allowing your salespeople to enjoy themselves at work, you will build a company culture that will allow you to keep top performers and attract solid new sales talent.

 

What are the costs of high turnover in the sales department?

The exact cost of turnover varies from company to company depending on several factors, but it can easily exceed 200 percent of an employee’s yearly salary.

That means that if your salesperson makes $50,000 annually, you could end up spending $200,000 replacing her. You will likely lose this money due to recruiting costs, new hire orientation costs, training costs and lost sales productivity.

Losing a sales rep can also affect the morale of the rest of the team. If they see that a top salesperson has left to find a better opportunity, they may also consider searching for a job elsewhere. Then, you may lose even more of your salespeople, which will cost you more money.

 

To hire a Driven team that is unlikely to quit, consider choosing a sales aptitude test, like The DriveTest™.

Repeatedly hiring salespeople who quit right away can be frustrating and a huge waste of money and resources. By screening your candidates early in the hiring process, you can quickly determine whether or not they can produce top sales results.

Remember, it is up to you to provide a fun, healthy working environment that fosters career growth.

Be the kind of manager you would like to have, and your salespeople will be much more likely to stick around for a long time and do great work.