The Great Resignation. The Great Attrition. The Mass Exodus.
The historic turmoil taking place in today’s workplace has been given many names—and for good reason. According to the U.S. Bureau of Labor Statistics, a record-breaking 10.9 million jobs were open at the end of July 2021.[1]
This unprecedented turnover will stretch long into the future. Some 41% of the global workforce is “considering leaving their employer in the current year,” while “95% of workers are contemplating a job change.”[2]
All this turnover comes at a staggering cost: 30%–40% of the annual salary for entry-level employees; 150% for mid-level employees; and up to 400% for highly skilled employees.[3]
The costs are particularly steep for the sales function:
- The average salesperson needs 15 months before becoming a top performer.[4]
- A company spends on average $106,374 for a salesperson’s salary, health care, etc., before the person starts to reach their quota.[5]
- The annual turnover rate for salespeople is 27%—twice that of the overall labor force.[6]
A little reflection reveals a sobering conclusion: A company cannot succeed if there is significant turnover in its sales force. The cost of the investment, the long lead time before success, the risk of a salesperson quitting, and the opportunities lost along the way are financially crippling.
The Pivotal Role of the Sales Manager
Sales managers have an oversized influence on the struggles and successes of a salesperson.
Gallup found that managers account for at least 70% of the variance in employee engagement scores across business units.[7] An article in Harvard Business Review went even further:
High-performing sales leaders reported an overall average annual quota attainment of 105% compared to 54% for underperforming sales managers.[8]
The same article stated that when salespeople rate their manager as being excellent or above average, 69% of them exceed quota.[9]
So how can sales managers help their new hires?
Using SLII® with New Hires
SLII®, the world’s most taught leadership development solution, is a proven way to help salespeople succeed. It categorizes a person’s capability for a given task or goal into four categories:
- D1—Enthusiastic Beginner. You’re usually at D1 when you’re starting to learn something new.
- Remember how you couldn’t wait to ride a bike? You were at D1 on that goal.
- D2—Disillusioned Learner. You inevitably discover that what you’re trying to learn is harder than you first thought.
- Pedaling, steering, and keeping your balance was trickier than it looked at D2.
- D3—Capable, but Cautious, Contributor. You need to build your confidence in using the new skill.
- At D3 you could now ride around the block, but your first outing to a crowded park was a bit intimidating.
- D4—Self-Reliant Achiever. You’re highly competent at a task and committed to doing an excellent job.
- When you reached D4, you could help your younger sibling learn to ride!
SLII® teaches managers to match their leadership style to an employee’s needs by using the appropriate directive and supportive behaviors. The four leadership styles are S1 (Directing), S2 (Coaching), S3 (Supporting), and S4 (Delegating). When leaders match their leadership style with an employee’s development level on a particular task or goal, the person develops competence, motivation, and confidence. And because their development leads to new career opportunities, they stay with your company.
New salespeople are at D1 or D2 on many tasks. They have considerable commitment (motivation and confidence) but little competence, even if they were a top performer at their previous job.
Here are examples of Style 1 leadership that sales managers can use to get new hires off to a fast start:
- Give clear goals
- Set timelines for accomplishing them
- Prioritize tasks
- Create a step-by-step learning plan
- Show what a good job looks like
- Give access to resources
- Share generous feedback on progress
Sales managers should also acknowledge a new hire’s transferable skills and commitment. People at D1 on a specific task or goal are receptive to direction when you acknowledge their commitment.
Sales managers can also paint a picture of success. That means showing the new hire what a good job looks like instead of letting the person develop bad habits as they struggle to find their own way. This tactic works because brain stores information as images, not words.
Time Well Spent
Millions of people worldwide are reevaluating their careers because of the pandemic. Competition for talented sales professionals is fierce. What’s a sales manager to do?
Take the time to invest in your new hires. Use SLII® when you lead. It will pay returns for years to come.
You can learn more about the impact that SLII® can have in your organization by downloading the new eBook Turning New Hires into Top Performers… Quickly. Looking for more content specific to sales management? Check out Meeting the Quota Challenge: Critical Skills Every Sales Manager Needs to Excel. Both downloads are free courtesy of The Ken Blanchard Companies.
ENDNOTES
[1] https://hbr.org/2021/09/who-is-driving-the-great-resignation?utm_medium=email&utm_source=newsletter_daily&utm_campaign=dailyalert_actsubs&utm_content=signinnudge&deliveryName=DM150635
[2] https://www.microsoft.com/en-us/worklab/work-trend-index/hybrid-work#:~:text=Today%2C%20our%20research%20shows%20that,major%20pivot%20or%20career%20transition.
[3] https://www.clickboarding.com/employee-turnover-what-is-it/
[4] https://www.indeed.com/career/salesperson/salaries
[5] https://www.sba.gov/blog/how-much-does-employee-cost-you#:~:text=There’s%20a%20rule%20of%20thumb,little%20harder%20to%20pin%20down.
[6] https://hbr.org/2017/07/how-to-predict-turnover-on-your-sales-team
[7] https://www.gallup.com/workplace/231593/why-great-managers-rare.aspx#:~:text=Companies%20fail%20to%20choose%20the,of%20the%20time%2C%20Gallup%20finds&text=Managers%20account%20for%20at%20least,severely%20low%20worldwide%20employee%20engagement.
[8] https://hbr.org/2015/09/the-7-attributes-of-the-most-effective-sales-leaders
[9] https://hbr.org/2015/09/the-7-attributes-of-the-most-effective-sales-leaders
About the Author
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