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The only thing that will keep recruiters loyal to you is the prospect of future business.
When I was rebuilding my region, my company had a number of these (most of them were ex-military Recon types.) They made great recruiters, and most of them went on to have successful careers in sales and sales management. It was one of the best investments we ever made. Not because we saved recruiting fees, but because we got top-level talent.
All I ever saw in my recruiting efforts were A and B prospects. I wasted very little time talking to turkeys because of the efforts of these people. We were able to rebuild our region from middle of the pack to number one within a year. This is an excellent investment, but like many best practices, it requires a certain economy of scale to be able to afford a full-time, aggressive internal recruiter who is not just a paper passer.
If you’re recruiting, how do you know what to look for unless you sit down and define what a successful salesperson in your organization looks like? What traits, experience, skills and personality will predict success in your organization and in your industry? Unless you write it down and test it against your current performers—you’re guessing. In the absence of a profile, you’ll be hiring on hope. You will be opportunistic instead of purposeful. People tend to hire on hope and fire on faults—a very expensive habit.
Good Is the Enemy of Great
Not having a reason to not hire somebody is not a reason to hire them. The default is to keep talking or keep looking.
A regional manager I know once hired a guy and fired him within three months. When asked why we hired this person, he replied, “I couldn’t find a reason not to hire him, and he looked better than anyone else I’d seen.” (These are two bad principles that need to be removed.)
One time, one of my sales managers said to me, “We can’t have all ‘A’ players.”
“Why not?” I said. “That’s not true. That’s a bad principle. Throw it out. You can have all ‘A’ players. I’ve done it three times in my life.”
People tend to hire on hope and fire on faults — a very expensive habit.
But you have to be willing to wait for the star, and you have to be willing to spend more time recruiting than fixing problems for salespeople. Championship teams have no weak links. It’s pay me now or pay me later, and I’d rather invest in recruiting than in fixing lost sales.
While at SAP, one of our principals, Jack Barr, met with sales directors from all over the country. He would ask them each to rank their current sales teams—how many A, B, and C players they thought they had.
Their categorizations were always similar. They all defined their sales forces as having some A players, some B players, and some C’s. Their best performers were designated as “A players” even if they really weren’t. In many cases they didn’t really have any A players at all.
When Jack told them that they needed to hire some A’s, they would always say, “We can’t right now—we don’t have the headcount.”
“But if you have four C players right now, who you don’t think will ever be A players, you do have the headcount,” Jack would tell them. “You have room to hire four people.”
As a sales manager, you have to be candid with yourself about what level players you really have. You should constantly be recruiting. When you find an A player—or someone who has the potential to become an A player—hire them and replace your C’s.
You can only perform as well as the team you have behind you. If you spend all of your time coaching the C players, helping them sell, you can’t be an effective manager to the rest of your team.
It’s not what you pay a man, but what he costs you that counts.
One of the problems we have in business is that accounting systems don’t measure the cost of a bad hire. Our accounting systems don’t measure lost revenue because it never hit the books in the first place. But the cost is there; it’s just invisible. Not only is it an out-of-pocket cost from lost sales, but also there are huge non-monetary costs that have an impact on the manager.
One thing is sure: Whatever the gap is between what you hire and what you need, the manager pays for in the long run. The costs incurred from hiring mistakes include lost productivity, as well as lost time for the manager and the entire sales team—not only lost sales from the poor production of that one salesperson, but also lost manager’s time that was taken away from other people who could have benefited from good coaching—not to mention other losses such as angry customers, employee morale, and even missed opportunities.
Not having a reason not to hire someone is not a reason to hire them.
What did it cost you to settle for someone who was adequate if you missed the star who would have come along one month later and would have been a quota exceeder for the next 10 years? How much did it cost because you settled for someone who was adequate rather than someone who was exceptional? The principle is—if they aren’t exceptional, they aren’t acceptable.
Whatever the gap is between what you hire and what you need, the manager pays for in the long run. If your new hire is not exceptional, they are not acceptable.
Additionally, you have the out-of-pocket costs of recruiter fees, moving expenses, and training and travel to get someone new up to speed. What is the real cost? Most of the sales managers I talk with estimate the cost of a bad hire at — when they add it all up — a minimum of one to two year’s sales quota. It takes three to six months to figure out if the new hire can do the job; then you may have to give them a probation period of another 90 days; and then it takes another three to six months to hire someone else and get them up to speed again.
Here is an example based on a salesperson with a $1.5 million quota: