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Hiring and Retention in Sales: 7 Alarming Stats You Should Know

Flashback to fifth grade science class. Mr. Lunders, who had a whole gerbil sanctuary in his class that was rather distracting, but I digress,  was explaining the four essential needs for life to thrive: food, water, shelter, and space. In one word…Resources. When running your life or running a business, resources are needed to accomplish anything. Whether that means ensuring you have a shelter to live in and food on the table, or a fully ramped team and a reasonable marketing budget (I’m partial to that last one) 😆.

Hiring new sales reps requires a lot of time, effort, and expense. And in today’s environment, retaining sales employees is harder than ever and during challenging economic times, can be the very linchpin to success.

This problem isn’t unique to sales. According to Gartner, total annual voluntary turnover in the US is expected to increase by 20 percent versus pre-pandemic averages. But sales departments have been hit especially hard with high turnover.

In this article, we’ll take a look at seven alarming stats about hiring and retaining sales employees that you need to know about, and then we’ll consider what you can do about it.

1. Voluntary sales rep turnover is 15.9 percent

A study by Compensation Resources Inc. (CRI) found that the average voluntary turnover rate for salespeople was 15.9 percent. By contrast, the voluntary turnover rate for all industries surveyed was only 14.3 percent.

That 1.6 percent difference may not seem like much, but depending on the size of your sales department, it can represent multiple employees. And it becomes all the more important when you consider how much it costs to hire and train replacement salespeople.

2. Average cost to hire and train a new sales rep is $150,000

A study performed by the DePaul University Center for Sales Leadership found that across different business sectors, it costs an average of $29,159 to hire, $36,290 to train, and $49,508 to replace a sales rep, adding up to a total average $114,957.

Those findings were reported in 2012, and while the same research hasn’t been repeated since then, costs have risen substantially. Adjusting for inflation alone would raise that figure to more than $150,000 in today’s money.

3. Replacing a sales rep takes around 4 to 5 months

The DePaul University Center for Sales Leadership conducted a different Sales Effectiveness –

Sales Acceleration Survey from 2015 to 2016 to profile and report on various sales organization performance metrics. Among their areas of research was the average time it takes to replace a sales rep who leaves an organization.

They found that it varies depending on the type of sales role, with an inside sales role taking an average 3.69 months to replace, and an outside sales role taking an average 5.42 months to replace.

4. It takes 15 months for new sales reps to reach top performance

According to research by the RAIN Group, onboarding comes in three stages, each of which require a significant time commitment.

They found that on average, it takes 3 months worth of onboarding and training before a new sales rep is at all ready to interact with buyers. Then it takes 9 months before they reach a level of baseline competency. And finally, it takes a full 15 months for a new sales rep to become a top performer.

5. The average sales rep will leave after only 18 months

Hubspot found that sales reps stay with a company only 18 months on average before leaving for new opportunities.

That means after 4 to 5 months of recruiting a new sales rep, followed by 15 months of onboarding and training, the average business will get only 3 months of top performance from them.

6. One in four surveyed reps planned to leave their positions soon

The 2022 Sales Happiness Index surveyed over 600 sales professionals on a wide variety of topics. Among their findings, they learned that 25 percent of sales reps said they intended to quit their sales position sometime in the next three to six months.

This indicates that today’s voluntary turnover rate may actually be significantly higher than the 15.9% reported in CRI’s study.

7. Lack of benefits is the #1 reason sales reps want to leave

The 2022 Sales Happiness Index also asked the sales reps who want to leave their current positions what reasons led to their decision.

The top reason they gave was a lack of sufficient benefits, with 43 percent of them listing it as a contributing factor. Next, 33 percent of sales reps who want to leave said that they lacked access to the tools and technology they needed to do their jobs successfully. And finally, 31 percent said that a lack of bonuses contributed to their desire to leave.

What you can do to improve retention among sales reps

With a third of outgoing sales reps citing a lack of tools, one of the most important immediate actions you can take to keep them from leaving is to give them the tools they need. Performio’s Incentive Compensation Management (ICM) solution makes life easier for your sales reps while saving your business time, effort, and expense.

Our software provides reps with insights into their performance, their progress toward quotas and goals, and what compensation they can expect to earn. This prevents them from resorting to “shadow accounting”—where they waste time attempting to track their progress via home brewed calculations that may or may not be accurate, potentially causing further frustration and disputes down the road.

Additionally, our what-if calculators give reps the chance to try out different combinations of sales activities to learn what opportunities will provide them with the greatest earning potential. Performio helps to eliminate confusion while entrusting sales reps with the transparency they need and deserve.

But having the right tools is only one part of the equation for improving your retention rate. For the rest, we’ve put together an in-depth guide to keeping your sales reps around.

And to see what Performio can do for your business, request a demo today.

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