Recruiting and retaining top sales talent is a struggle across many industries in today’s competitive job market. Each year, an average 26% of sales reps resign from their positions — leaving their companies to navigate the cost and challenge of attracting, recruiting, hiring, and training a qualified replacement. Successful companies go the extra mile to understand talent market challenges and develop innovative recruiting and retention strategies to counter sales talent’s tendency for high turnover.
The sales talent market
Recruiting and retention are two sides of the same coin, but each has unique challenges and costs in an unstable talent market. The “Great Resignation” remains a factor, and existing retention strategies may not be sufficient for top sales talent. Consider these key data points:
- According to 2022 survey data, 56% of sales professionals are actively searching for a new job.
- 44% of satisfied, high-performing sales professionals are actively looking for new roles.
- The rate of turnover on sales teams is 27% higher than that of the overall labor force.
Sales professionals are still on the move — regardless of their current performance or job satisfaction. This makes it even more important for companies to focus on retention, as high attrition rates negatively impact your bottom line. For example:
- U.S. firms spend upwards of $15 billion annually to train replacement sales representatives.
- The cost for replacing a single sales rep is typically 1.5-2 times their annual salary. For example, if your team loses a rep who makes $70,000 per year, it can cost as much as $140,000 to replace them.
- On average, it takes more than three months for a new sales rep to reach peak productivity.
Resolving the sales rep retention puzzle would presumably eliminate the costs of recruiting, hiring, onboarding, and training replacements, but companies must remain mindful of high turnover as an inherent feature of the sales talent market. An active and effective recruiting strategy is a safeguard against the possibility of unexpected attrition.
If a sales team is plagued by excessive attrition, the reasons may trace all the way back to recruiting. A comprehensive, candidate-focused recruiting campaign is a prerequisite for successful retention. What are the essential elements of an effective recruiting strategy? For 2023, and beyond, key areas of focus include:
- Competitive and transparent compensation. A company can have the best compensation package around, but it won’t do much for recruiting or retention if nobody knows about it. Compensation transparency gives current and prospective sales reps the clarity to inform positive career decisions.
- Meaningful recognition, rewards, and incentives. Today’s workforce wants more than a paycheck. They want to find purpose in their work and receive meaningful recognition for their achievements. Find innovative ways to spotlight sales success, and develop tangible incentives to reward exceptional performance.
- Career growth and development opportunities. Even a high-performing, well-compensated sales rep will start shopping around the moment their career starts to stagnate. Where will they go? In search of a more dynamic opportunity. To keep top sales talent on your team, provide plenty of chances for career growth and development, and be sure to promote your company’s opportunity culture as part of your recruiting strategy.
- A culture of care and well-being. Investing in employee health is a critical strategy for preventing talent burnout and building a company culture that prioritizes physical and mental health. Consider incorporating health and wellness days into your PTO plan, and add extra days off or self-care activities to your recognition and rewards programs.
Once you’ve secured top sales talent for your team, it’s time to go all in on retention. Keeping sales reps motivated and engaged requires more than competitive compensation. According to Harvard Business Review, “What sales professionals truly value are companies committed to their short- and long-term success.” Defining a clear — and dynamic — career path motivates sales reps to strive for continuous improvement and contribute to company growth goals.
And while compensation is not the only factor in sales rep retention, it remains, in most cases, the No. 1 deciding factor. Use compensation and sales commissions as primary motivators for sales team productivity and engagement. Recommit to compensation transparency, and provide your sales reps with access to real-time performance and commission data. Compensation clarity inspires trust, but real-time information also allows reps to optimize their sales efficiency, maximize their commissions, and boost your bottom line.
Give your sales team compensation clarity with a comprehensive, cloud-based commission management platform. Schedule your demo today at SalesVista.com.
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