09/27/2006
Hiring: A Key Component of Sales Effectiveness
Rethink your sales hiring process to improve performance
By Dave Stein, CEO & Founder, ES Research Group, Inc. Featured Monthly Columnist for Sales & Marketing Management magazine
Ask yourself this question: "What percentage of sales people that have been hired into my team in the past three years have quit or been terminated due to performance issues?" If that number is greater than 30 percent, you need to buy or build a structured hiring process, install it and use it.
"Our investigation reveals that investing in sales processes, training, attractive compensation plans, marketing support and strong products and services will not do very much for you unless you have a solid foundation upon which to build and that foundation is a team of highly qualified and skilled sales professionals."
Dave Stein, CEO & Founder, ES Research Group, Inc.
Pareto: Does Not Apply
Some sales leaders have told us that Pareto's Principle works fine for them: 20 percent of their sales team brings in eighty percent of their revenue. We think they are missing out on a lot of maximum margins, competitive advantage and all the other benefits derived from having a unified sales team that will consistently deliver even as buying environments change. Our investigation reveals that investing in sales processes, training, attractive compensation plans, marketing support and strong products and services will not do very much for you unless you have a solid foundation upon which to build and that foundation is a team of highly qualified and skilled sales professionals.
Rethinking Hiring
The demands of today's hypercompetitive, buyers' market have forced sales leaders to rethink their approach to hiring. They have learned, all too painfully, that their hiring methods of the past do not apply any longer. They have learned that:
- A sales person with a record of stellar performance in the past will not automatically perform in the future.
- The accuracy of sales peoples' resumes is quickly declining, so rigorous reference checking is a must.
- Some candidates sell themselves well enough in the interview to get hired but are not good enough to deliver the numbers after they are hired.
- A bad hire--a sales person who doesn't make it through the first year--will cost you $150k to upwards of $800k or more including lost business opportunities.
- Hiring what are believed to be strong sales people, and then leaving them to figure things out for themselves once they are aboard, often leads to disaster.
More sales leaders are building high performance teams of winners by applying a process to what they did informally in the past: hiring.
A hiring process provides the sales leader with an objective assessment of each candidate, which is one of the most critical success factors in hiring.
Elements of a Hiring Process
Here are the key elements of a typical hiring process:
- An internal hiring team is formed consisting of multiple stakeholders. For a small company, those stakeholders would include, for example, the CEO, VP of Sales and VP of Marketing.
- Stakeholders agree on how the position and the company will be described to the candidate. Hiring is a balance between buying (the candidate selling himself or herself) and selling (convincing the candidate to join your team). It is less likely that a highly qualified candidate will join your team unless every person they meet articulates a consistent story.
- A benchmark is established against which this process will later be measured. Data points might include the average sales person's performance against quota, his or her average tenure, the time to first sale, etc.
- A profile is built for each unique sales position. The profile defines the critical skills and traits required for success. Those skills and traits are prioritized and each is scaled to measure the degree of candidate compliance. You can imagine that the profile for a sales "hunter" would be quite different than the profile for a "farmer."
- Accurate job descriptions are written. Those are then provided to recruiters and are used for posting on the Web and on internal or external job search boards.
- Recruiters and HR staff are provided with a simple document that will effectively filter out candidates with "fatal flaws." For example, if candidates must have at least five years of sales success in your industry, anyone not meeting that criterion will be eliminated from consideration. Screening against specific criteria saves time for the members of the internal hiring team, enabling them to dedicate more time to more qualified candidates. By the way, there are numbers of technology solutions available today that will perform much of this screening.
- A set of first round interview questions is engineered. When used as directed, they will enable the internal team members to probe for required skills and traits based upon the profile. Interviewer responses are recorded and analyzed.
- The hiring team is trained on how to perform structured interviews. Most important is that the interviewers follow the questions. Those will have been specifically designed to evoke responses from the candidates which will reveal whether they possess the traits and skills required for job success.
- A set of second round interview questions is devised. That tool enables further exploration for critical skills and traits and enables the interviewer to identify and quantify weaknesses uncovered in the previous interview. Again, interviewer responses are recorded and analyzed.
- A rigorous reference checking procedure must be included that validates candidates' claims and uncovers inconsistencies. It takes persistence and skill to perform effective reference checking these days, with companies reluctant to provide any information about former employees. We have found that the best reference checks are those that are done with people other than those the candidate provides. Sales leaders with a wide network can often find a "blind reference" who might provide an honest appraisal of a candidate knowing that that the discussion is only between them and the person doing the hiring.
- ESR recommends requiring candidates for sales positions to substantiate their assertions about past performance with tax or other formal documentation. An earning claim of $500k a year for the past five years and proving it may be two very different things.
- Final candidates are required to participate in sales call and presentation simulations. The candidates are evaluated against required skills and personality traits derived from the profile.
- ESR recommends psychometric testing. There are numbers of companies that have proven tools in this area. These tests rarely lead toward hiring someone you were not enthused about. However, we have seen candidates who hid deficiencies through the interview process who were "exposed" by the tests.
- Individual ramp-up plans are engineered. These assure that the gaps between the profile and the candidate's proven skill set will be closed during the first thirty to ninety days of employment.
- A continuous improvement component is implemented. In order for this process to continue to work into the future, there must be a mechanism that will provide the stakeholders with feedback and the flexibility to make adjustments.
Initially, sales leaders who are introduced to a process such as this have reacted somewhat negatively. "It will take too much time," is the most commonly voiced objection.
It quickly becomes clear that the actual number of candidates making it to the final stages is limited. Processes like this, in fact, work like a sales funnel, with numbers of candidates "qualifying out" of the process along the way. The result is that the hiring team has time to focus on the most qualified candidates. In addition, candidates are left with the impression that the company with whom they are interviewing is serious and well-managed. Finally, both the candidates and the company have awareness of the gaps between the candidates' capabilities, how those gaps will get filled, and precisely what is required to get the job done.
About Dave Stein
Although Dave's first career was as a professional trumpet player, his university training provided him with the discipline and understanding of process to get into computer programming. After tiring of staring at a screen all day, Dave was recruited into sales and worked his way to VP of sales for several leading technology companies. Dave has traveled the globe training, speaking to and coaching experienced sales teams and their executives from companies in all industries. He is the author of the Amazon best-selling book on competitive selling, How Winners Sell. He also writes the featured monthly column for Sales & Marketing Management Magazine.
In early 2005, Dave founded ES Research Group (www.ESResearch.com), which independently advises business organizations on selecting and implementing the right sales effectiveness approaches. Very recently, ESR published the first report of its kind, The 2006 Sales Training Vendor Guide, which reviews, compares and contrasts the top sales training providers in many areas such as educational design, methodology, technology support, breadth and depth of programs, customer satisfaction and post-program performance measurement.
About VCG
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