10 years ago
January 5, 2015

Sales Hiring and The Cost of a Mis-Hire

Learn how to develop a better sales hiring process from quantifying the costs of a mis-hire and identifying how most mis-hires are made.

Rhys Metler

Few sales hiring managers and executives exit a career without having made at least one mis-hire, but if the true costs of these mis-hires were known, one suspects that a greater effort would be made to avoid hiring individuals in sales roles who aren’t truly a fit for the position. The fact is sales hiring is a science, one that can be measured and tailored to fit any organization’s sales hiring needs. The motivation to learn how to develop a better sales hiring process comes from quantifying the costs of a mis-hire and identifying how most mis-hires are made.

Quality, Quantity, and the Myth of Experience

Many organizations insist that any sales hiring is done based on experience in a particular industry. The new line of thinking is that an exceptional salesperson with a track record of success and the ability to learn can transition into a new industry successfully. Companies that don’t add the flexibility into the sales hiring process that allows them to recognize individuals with high potential from other industries aren’t just missing out on an opportunity; they are committing themselves to recycle sales people from other organizations who did not work out, leading to a cycle of mis-hires.

Although sometimes a change of employers is all that a sales person needs to do better, a large number of bad sales people bounce from company to company, never doing well enough to stay on for long. With creative editing these mis-hires may look good on paper, but the quality and quantity of their sales just aren’t there. If your sales hiring process isn’t verifying the quantity and quality of candidates’ previous sales, your organization is open to paying the costs of a mis-hire, including:

  • Lost referral and sign-on bonuses
  • Base salary for no productivity
  • Lowered productivity from existing sales people and sales managers due to disruptions, lowered morale, and other issues
  • Termination costs

Can You Quantify the Cost of Damaged Relationships?

Mis-hires don’t just impact your existing team and your bottom line; hiring mistakes can impact your reputation and relationships with clients as well. Even a single mis-hire can do lasting damage to an existing client relationship due to poor communication, badly handled deliveries, and other woes. A mis-hire who prospects inappropriately or worse, mishandles leads, can also decimate your organization’s chances of recovering the opportunity to work with a particular prospect.

In a worst case scenario, a string of mis-hires can start to impact not just existing client relationships, but your firm’s reputation in the industry. Sales relationships are based on trust, and decision makers that hear about the troubles of others dealing with a mis-hire in your organization will worry whether their relationship with you is going to suffer from the same issues. It is nearly impossible to put an accurate cost to these lost opportunities, but these lost opportunities can easily exceed the hard costs of a bad hire.

One of the best ways to avoid making costly mis-hires is to design your sales hiring process around the goal of only attracting and recruiting top candidates with proven sales results. A comprehensive sales hiring strategy that aims to encourage unqualified candidates to self-select out of the process while reducing your exposure to the costs of a mis-hire is the most important aspect of sales hiring today. A sales hiring decision should predict the way that a sales person is likely to contribute to your organization’s productivity, sales results, relationships, and reputation. Not doing so invites a costly mis-hire.

Rhys Metler

Rhys is a tenacious, top performing Senior Sales Recruiter with 15+ years of focused experience in the Digital Media, Mobile, Software, Technology and B2B verticals. He has a successful track record of headhunting top performing sales candidates for some of the most exciting brands in North America. He is a Certified Recruitment Specialist (CRS) and has expert experience in prospecting new business, client retention/renewals and managing top performing sales and recruitment teams. Rhys enjoys spending quality time with his wife, son, and daughters, BBQing on a hot summer day and tropical vacations.