The Failed Sales Hire Problem and Solutions to Fix It

Written by
Lucas Price
|
September 26, 2023
|
5 minutes
read

Failed sales hires have always been an expensive problem, but it’s only gotten more severe in recent times. According to Winning by Design’s latest research report on sales underperformance, only 4% of sellers are top performers now. That number used to be 20%.

Perhaps even more startling is that two out of every three sales representatives are failing to hit 80% of their quota on a regular basis. Only 32% of sellers are hitting at least 80% of their quota regularly. The number of lowest performers is only growing, increasing from 10 to 28%.

In other words, for most companies, 68% of sales reps aren’t bringing in the results they need to operate at a normal level. This stark reality presents a significant risk for organizations, and the only way to get ahead of it is to address the root of the problem: poor sales hires.

The Cost of a Failed Sales Hire Adds Up

How much does a failed sales hire really cost?

Let’s play out this hypothetical scenario. You’ve gone through the hiring process, made an offer to a candidate, and they’ve accepted. It turns out this hire was a low performer. Now eight weeks have gone by, and you’ve realized you made a mistake. You want to go to Human Resources (HR) and explain the problem. HR asks you what documentation you have in place.

None.

HR tells you to wait until performance reviews come up next month and then put the hire on a performance improvement plan (PIP). Next thing you know, it’s been six months since the hire’s start date. Due to ramp-up time and underperformance, the hire has only sold around 10% of their annual quota.

Now you’re dealing with an open seat. So, you start the hiring process over again. You identify a candidate, make an offer, and then hire, train, and ramp them up. Ten months later, you have a high performer in the seat. At this point, you’ve lost approximately 70% of the annual quota of the topline, which affects commissions, your company, investment prospects, and more.

That’s a measurable impact, and if you are not careful, the mistakes will compound. You could be in a hurry to fill the seat and lower hiring standards in an effort to save the plan. Remember, if you have a million-dollar quota, you’re looking at a $700,000 decision. It is worth giving the hiring decision its proper weight.  

Think of it this way. What if you waited two more weeks to hire and found someone 10% better than the current candidate? Sure, you might feel like you’re two weeks behind. In actuality, hiring someone 10% better will make up these two weeks by ramping up faster, learning more about your customers and the market, and sharing that knowledge with your team.

That might seem like a small difference, but it compounds over time, especially when you reach a little bit higher every time you make a sales hire.

Timing matters, but not as much as finding the best candidate for your sales role. Make sure you’re always recruiting. That way, you’ll know who you can put through the hiring process that will increase the average selling skill of the team when a seat opens. You may also consider only hiring someone who has a relevant and important sales skill that is better than anyone else on the team.

Common Missteps that Lead to Hiring the Wrong Sales Candidates

Why do companies fail to hire the right sales candidates? We discussed timing or the pressure to fill an empty seat as quickly as possible. There are some other common missteps as well, such as overlooking the context of past candidate performance. Relying on surface-level interview questions can cause this problem. Candidates who are good storytellers have their time to shine and may be able to spin information about past experiences in a way that doesn’t give the full picture.

Other errors to be aware of include:

  • Placing too much emphasis on industry experience
  • Having poorly developed or underdeveloped hiring processes and practices
  • Lack of visibility into which traits lead to sales success at your company
  • Lacking an understanding of how the new hire will affect company culture

Do These Things to Hire the Right Sales Candidate

So, how do you avoid ending up with a failed sales hire?

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