The Direct and Indirect Costs of Bad Sales Hiring

by | Jul 7, 2022 | Recruiting

Top salespeople will always be in high demand. For any young company, the ability to hire and retain top sales talent is a major competitive advantage. Go to market companies seeking to ramp up their customer acquisition need great people on their team. Yet, it is not uncommon for companies to experience high salesforce turnover. After all, the average salesforce turnover rate is over 33%. There can be a lot of factors at play when it comes to understanding salesforce turnover, but there is one action companies can take right now to fix the root cause of the problem: hire smarter.

First, let’s take a look at the direct and indirect costs associated with attrition within sales organizations:

Direct Costs

  • The cost to hire a new salesperson including recruiting, advertising, and interviewing.
  • The cost of onboarding a new salesperson, including ramp-up and management time.
  • The cost to train a new person – for example, over two or three years, a company likely invests 10-20% of a salesperson’s salary or more on training programs.
  • Customer Service and errors – new salespeople take longer to ramp up and often make more mistakes than seasoned salespeople.

Indirect Costs

  • Impact on sales culture – whenever a top performer leaves, others take the time to stop and ask why.
  • Engagement Loss – sales teams with high turnover tend to disengage and lose productivity.

So how do organizations fix the root cause of salesperson turnover and avoid these costly mistakes? The answer is to revamp your hiring criteria. Unfortunately, many organizations make the mistake of hiring unfit or unqualified salespeople and simply end up firing them when they miss or fail to consistently exceed their quota. This is bad for the company, bad for the sales culture, and it will not help to reach revenue goals. 

Brainheart Growth Recruiting exists to take the mediocrity out of the sales hiring process and help avoid the costly mistakes associated with sales force turnover. We believe that creating a team of top-performing sales reps starts with your hiring process. Our mission is to help organizations create rockstar sales teams and we’re here to guide you every step of the way.