Business Growth

The cost of hiring a bad sales team (and how to avoid it!!)

If you’re reading this, you’ve probably already made the wrong sales hire (now or in the past) or you’re trying to prevent yourself from making a bad hiring decision. The purpose of this article is to outline the painful cost of making a bad sales hire, and help to safeguard yourself and your business from a hiring disaster in the future.

Why you might be making the wrong sales hire

One simple reason is that recruiting and selecting a new hire – who is a good fit for your company – is incredibly tricky. This is particularly true when it comes to sales recruiting, as your sales team is instrumental to your company’s success.

What is a bad hire

Here are some common warning signs to watch out for:

  • The sales person consistently ranks in the bottom 20% of all sales performers, even well after the ramp-up period.
  • The sales person usually (or always) fails to meet quota.
  • The new hire doesn’t bring in significant new business. The new businesses they bring in are low-hanging fruit. The customers don’t have much potential for growth.
  • The sales person isn’t willing to put time and effort into ongoing sales training.
  • The person’s presence on the team contributes to a negative work environment. They do not work well with others or contribute significantly to group initiatives.
  • The sales person does not seem engaged at work. Their lack of engagement may impact others.
  • When talking with clients and prospects, the sales person displays unprofessional behavior that hurts the company’s standing.
  • The salesperson is consistently late without cause.

The true cost of a bad hire

While the financial impact is quantifiable, business owners should also consider the impact of hiring a bad sales team in terms of the impact on the morale and productivity of the rest of the company. Why? Because a bad apple spoils the bunch, so to speak. Disengagement is contagious.

In many ways, a bad hire’s effect on company culture echoes beyond the employee’s tenure. Poor performers lower the bar for other employees, and bad habits spread like a virus. I once hired a manager who built a chaotic, everything’s-a-fire-drill environment.

Unfortunately, bad hires aren’t always easy to spot. Start-up leaders can misdiagnose people issues as process or service issues. Until you are able to spot the poor performers, you risk wasting precious time and money tackling the wrong problem.

Loss of time

Getting your hands on a new employee is a significant investment of time as every step of the process takes time – especially when properly executed.

So, what happens when you invest the time and the person is clearly not the right fit?

At that point, the time you spent acquiring and considering this salesperson is a sunk cost—and a significant one.

At the end of the whole ordeal, your company will spend significantly more time trying to solve the additional problems the wrong employees create than on the productive tasks at hand to make it truly “rain”.

Loss of money

Although it’s a bit of a cliché, the phrase “time is money” is spot on here.

On the low end of the cost spectrum, it’s estimated that losing an employee costs the same amount of six to nine months of that employee’s salary.

Loss of productivity

As your top performers spend more time trying to negate the damage of the bad sales hire, their numbers can suffer tremendously. With everyone in damage control mode, your employees will be doing less of what they should to support your bottom line—further increasing the situation’s financial burden.

Without the proper people in place, you may also have to pull other individuals from their roles to provide coverage. However, these employees may not have the right skills or they may be stretched too thin.

Impacting the client

If your leadership team brings someone on that isn’t a good fit, other members of your sales force might lose confidence in your ability to hire successfully—and understandably so. In addition to this you also have to consider the impact this has on the client experience and their trust.

Your sales team the first point of contact that your customers have with your brand. You want to make sure that your clients are very well looked after and that your sales team truly represents the values of your company. Failing to do that, may results in great damage not only on your turnover but also on your brand.

How to avoid the risk of a bad hire?

One simple way to avoid all this is to outsource your sales and marketing functions to a trusted external partner, which can act as an extension of your business.  

By outsourcing, you will save money as you won’t have to hire, train and retain your sales and marketing staff. You will also have the confidence in knowing that experienced and reliable outsourced teams will be able to complete the work on time – for a fraction of the cost of hiring an employee. There are also some operational efficiencies that are likely to impact your bottom line – for example, when you need to add a specific skill to your team. Outsourcing gives you the manpower and skills you need, when you need it, and without the overhead expenses.

If you want to explore more benefits of outsourcing your sales and marketing, get in contact.

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