Turnover Troubles

By Cindy Waxer

According to a study conducted by Sales Performance International, a Charlotte, NC-based consulting firm, the average turnover among sales professionals in 2002 more than doubled what experts say is the average annual level of 15%. The study also shows that in some cases turnover was as high as 40% to 50%.

What happened to the notion of happily ever after? According to the study, several factors accounted for the higher turnover:

  • Nearly 50% of those surveyed cut back sales staff because of the recession.
  • Of the study respondents, 10% said the sales professionals left of their own volition for new opportunities, either because sales had declined in their sectors or because they were made more competitive offers.
  • Of the responding high-performing sales professionals, 15% left because of compensation changes implemented to make up for sales losses. At one company territories were reduced and top sales people were shifted from a 30:70 ratio of base salary to bonus [shifted to what? Need a comparison]; the company lost half its sales force within six months, most of them high producers.

    SPI CEO Keith Eades isn’t surprised by the study’s findings. Eades points out that companies typically use strategies or initiatives that drive cutbacks. Sales management at some companies downsize the bottom 20% of the sales team each year regardless of the economy, while others use market conditions as an excuse to make basic changes to their go-to-market strategy. Some sales professionals usually find the changes disagreeable, so they leave.

    Nevertheless, a small minority of sales organizations experienced little or no change in 2002. A hard business climate made many companies intent on retaining their entire sales team and getting them refocused for the expected upturn in business.

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