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10 Steps to Reducing Sales Team Attrition Rates

Many companies with high sales function employee attrition, or ‘churn’ rates, resist investment in their people for fear of wasting money on people who are likely to leave anyway.

However, many research projects have shown that investment in a sales team’s development can completely transform the rate of attrition. This article explains how to use training and development as a critical tool for reducing the loss of your people and, in particular, the loss of your best people.

Background

With increased employee mobility combining with the advent of social media and online employment agencies, employees have not only become better informed over your company’s standing as an employer of choice, but they are also now much more able (and likely) to apply for a job elsewhere as soon as they become aware and/or decide that it is worth switching.

Sales people are demanding and want good rewards for their efforts. However, they also want to enjoy their work. They want recognition of their skills and potential, they want investment in their future earnings potential and they also want good leadership in the form of an individual or leadership team that is going to take the company forward.

If they don’t get these things explicitly targeted for them, then they are likely to go. With so many redundancies making the news and companies suddenly getting into trouble, they know that employment is no longer an entitlement and they reciprocate by looking after number one. This means that, in both directions, loyalty is a thing of the past.

Consequences

Some companies have annual attrition (or ‘churn’) rates of 50%. This is particularly the case in telesales, where many companies still don’t believe that they should spend a reasonable amount of money on good training. The problem is that when a company has a significant attrition or churn rate in its sales function, it’s also a fact that the best are the first to leave because they are the ones who will find it easier to get an alternative (and better) job.

So if it’s not careful, the company that is not recognised as a good employer quickly gets left behind with those who find it most difficult to find an alternative and therefore ends up with a poor salesforce that needs performance management and weeding out, as well as training and development.

Compared to the cost of training your good and best people, replacing them is both time consuming and expensive. And don’t forget, once the replacements are recruited, it can take up to six months (or even longer in some key roles) to get them up to speed and fully effective.

What’s the answer?

Companies need to keep and develop their good and their best people. They should treat every sales person as a precious investment that needs to deliver an early, big and constant return on that investment.

A company has already made the investment in recruiting people and paying their wages (and commissions) every month so it’s worth making targeted incremental investment in taking the good to great and keeping all people who have potential.

Here are ten steps to making sure that your sales development investments reduce attrition rates in the best performing people as well as improving their effectiveness in the job:

  1. Invest in the sales peoples’ development as part of a strategy of developing a new way of selling that benefits the individuals (in terms of career and earnings potential) as well the company (in terms of delivering increased average sales values, increased conversion rates and reduced sales cycles). Make sure all communications emphasise the benefits to the individuals as well as the company. Clearly articulate why you are investing on developing your good people as well as the people with significant gaps in skills, behaviours and/or performance.
  2. Make the development programmes assessed and competitive e.g. with different levels ‘accreditation’ (e.g. pass, merit and distinction) that are based on role-model skills, behaviours and achievement.
  3. Align recognition and promotion to achievement on the development programme as well as pure sales results (assuming the assessment on the programme is based on actual skills, behaviours and results demonstrated in a live situation).
  4. Within the development programme, ensure people take personal ownership for their own personal development plans in order to improving their performance and hence reward and recognition.
  5. Consider having accreditation externally recognised e.g. via an ISMM or ILM qualification awarded to the top performers.
  6. Define clear career pathways for progression so the best people can move up the ladder in terms of career advancement and/or earnings potential.
  7. Recognise the top performers (before, during and after the development programme) by involving them in the design, planning and reviews of the development programme.
  8. As well as investing in their development, look at the root cause of the attrition rates and address some of those problems, rather than adding to the problem by withholding investment in the people’s development.
  9. Make it clear that the good and the best are appreciated and make the reward and recognition differentials worth their effort i.e. make the difference between what the best performers and worst performers get paid and invested in really significant.
  10. Start the development investment at the sales management level to ensure they are able to lead, coach and manage their people more effectively from the outset.

For more information on reducing your attrition or churn rates in your sales teams contact Sterling Chase on 0845 371 3099 for a free consultation.

Written by: Steve Eungblut, Managing Director at Sterling Chase