Hiring new salespeople can be the most important decision a sales executive makes on a routine basis. Effects of a bad decision can include lost sales, wrecked customer relationships and the heavy cost of replacing a rep who’s below par. Even average hiring decisions leave money on the table – the money your firm could make by hiring people who have the potential to become top performers.
Expert firms can help you hire better reps by using a variety of test and assessment methods. The Internet allows more kinds of tests to be given much more economically and earlier in the recruiting process. But the bottom line is, Does the test you’re using improve results? The best recruiting experts should be able to demonstrate that their methods work – that they raise the average sales of new hires and reduce the costs of turnover from bad hires.
Shooting for 85 Percent Success
Recruiting assessments conducted by The Gallup Organization focus on five primary areas, according to Benson Smith, global leader for Gallup’s Sales Force Effectiveness. The first area is motivation. “The best salespeople are simply more motivated than nine out of 10 people,” Smith emphasizes.
The second area is the candidate’s ability and willingness to ask people to do things. Reps must get customers to make commitments.
Relationship skills, which primarily mean gaining trust, are next. Sometimes trust must be gained in a very short time, in other cases it must be maintained over years. Gallup wants to ensure that the potential rep has the skills to fit the market.
Gallup also looks for the ability to organize, plan and administer. Many people go into sales because they dislike paperwork, Smith says. “Yet in every sales job there is a certain amount of paperwork that has to be done.”
Finally, every sales job requires presenting information, listening to customers and solving problems. Gallup thus wants to know how well recruits take in and process information – that is, how well they think.
Gallup starts by looking for the role-specific behaviors of top performers in each sales force. It then develops questions designed to spot differences and behaviors in either interviews or tests. The results predict the probability that each candidate will match the level of a firm’s best salespeople.
Gallup has been studying the relationship between candidates’ abilities and the traits of companies’ top performers for 40 years. Gallup’s senior analysts develop test or interview questions for each client. These veterans have both doctoral-level education and extensive experience in conducting at least 10,000 job interviews. It is cheaper to use generic questions and tests, Smith acknowledges. But accuracy increases dramatically when only the best question for each sales role is used.
Gallup’s questions can be asked in a number of ways, in an automated telephone interview for initial screening purposes, through a Web-based test, or during in-depth telephone or face-to-face interviews.
Smith’s confidence in Gallup’s accuracy is rooted in his experience using the firm for 20 years in his own career, which included the presidency of a Fortune 500 medical company. He says Gallup’s prediction of top-performer potential and actual performance of new hires correlated at about 85 percent. When even the best managers tried to predict success without using Gallup results, they got it wrong about half the time. Good tests and interviews “are simply much more reliable than even the best sales manager’s gut instincts.”
What is accuracy worth? Smith puts his case simply: “What would your sales results look like if 75 to 85 percent of the people you hire next year perform at the level of your very best producers?”
And assessment can save money in the recruitment process itself. Why waste the valuable time of senior managers on interviewing candidates who do not fit the needs of your sales force?
Recruiting Globally on the ‘Net
Profiles International offers a psychometric sales profile that also focuses on five key qualities, according to CEO Jim Sirbasku. Profiles looks for competitiveness, persistence, self-reliance, energy and a combination of these qualities that Sirbasku calls “saleS drive.” Once profiled, the likely behavior of each candidate in seven critical areas can be predicted.
“For example, we are looking for the way a candidate will prospect,” Sirbasku explains. “What kind of closer will they be, how reluctant will they be to make calls, are they self-starting, can they play on a team and build and retain relationships?”
The 75-question profile is given over the Internet and takes 15 to 20 minutes. It is available in 12 languages, and the questions have been customized for local cultures. “If you are hiring a German, you want to use German cultural information.” Results are immediately available to U.S. managers in English.
Tests are customized for each client, by sales position. “We build a job match pattern for hiring and coaching, validated against the top reps and the lowest producers,” Sirbasku says. Attempts to ‘fool the test’ are countered by asking questions with socially desirable answers, calculating a ‘distortion score’ and adjusting results. The profile retails for $50 to $75, with discounts for higher volumes.
With 700 reps selling the profile and Internet testing available 24/7, Sirbasku says, “we are high tech and high touch.” Since 1991, he has worked for firms such as Snap-on Tools, Deluxe Checks and American Income Life. Sirbasku is especially proud of having done validation tests with more than 117,000 applicants and of an 80 percent retention rate by a huge client base.
Looking for Committed Professionals
Objective Management Group has been testing sales candidates as part of its larger services of evaluating and improving sales forces since 1989, according to test developer Dave Kurlan. The result of an Objective Management test is a straightforward recommendation to managers on whether a potential recruit should be hired for a specific sales position.
“We have developed our own criteria of elements that a person must meet to be successful in sales,” Kurlan explains. “Then there is a second set of criteria based on what the client tells us is necessary for success in their business.”
The test identifies the number of success criteria met and the number failed, which are the candidate’s weaknesses. “Depending on the income level of the sales position, we will allow no more than a certain number of weaknesses for a positive recommendation,” Kurlan explains.
Successful candidates must have fewer weaknesses as compensation increases. “When the target compensation is a quarter-million dollars a year, they cannot have any weaknesses,” Kurlan emphasizes. “But at the entry level, you can have some faults as long as there is a strong desire and commitment to succeed.”
Among the most crucial hiring criteria are desire for success, commitment to success, taking responsibility for results, and the candidate’s incentive to improve any weak areas.
Kurlan calls this approach an execution test. “The crucial question in selecting a new salesperson is, will they do what the client needs them to do,” he says. “We look at what the necessary skills are, what can be taught, and whether the person has what it takes to be consistently successful.” Sales is a tough environment, so Kurlan is always trying to find out, “will they do it, rather than can they do it?”
The company has invited its clients to have independent firms audit the predictive accuracy of its recommendations. “A year later we ask, ‘Is the new person still there, and are they successful in the position?'” Kurlan explains. Measured this way, he says, accuracy is about 95 percent.
The test contains 80 questions and takes a half hour to complete on the Web. Kurlan urges clients to give the test before any interview, to avoid the biases that come from “gut-level opinions” about the candidate. The tool is generally sold through other sales development firms, not directly by Objective itself.
Kurlan offers a free tool that helps managers decide how much a better hiring process can be worth. “We call it a ‘ghost worksheet.’ You can figure out how much your departed sales ghosts really cost you. Even when they are long gone, those ghosts come back to haunt you. A big hiring mistake can cost six figures.”
Simulating Sales Challenges
Upward Motion does assessments for recruiting, selecting and training salespeople, according to the firm’s president, Kim Ades. The company has products geared for real-estate agents and for business-to-business selling. It is about to introduce an assessment for call center staff.
The real-estate tool, which Upward has offered the longest, has three parts: an intelligence test, a personality test, and a simulation of actual selling situations. The B-to-B assessment also includes a simulation of selling in business markets.
“The highlight is the simulation component,” Ades says of the real-estate product. “The candidate interacts with virtual clients through the whole sales cycle, from building rapport to closing, and we compare them to top performers.”
In the simulation of B-to-B selling, candidates deal with typical challenges in this market, including analyzing customer needs, selecting the best course of action and negotiating prices.
Ades calls it a “competency-based model” of sales ability. “We look for four basic competencies: analyzing customer needs, listening and comprehension skills, ability to manage the sales process, and closing skills,” she says. “We believe the best indicator of performance is skills.”
Recruits can also use the simulations to decide if they really want to sell. “Companies put a link on their Website, saying, ‘If you are really interested, try our sales simulator,'” Ades explains. “Candidates get an idea of what a sales career is like, get a sense of the highs and lows, and can decide if they are likely to succeed in it.” Managers use the results to screen candidates and look for areas to probe in interviews or to address in training.
Sales simulation is done over a high-speed Internet connection, as it includes a video component and takes about 75 minutes. The cost per assessment starts at $300 but goes down to $100 for larger volumes. Or clients can purchase a site license for unlimited use. The eight-year-old Upward Motion has been offering simulations for two years.
Ades is convinced this high-tech, reality-based approach is the wave of the future in assessing recruits. She has signed up Abbott Technologies, an auto-parts company, Ciba Vision and a Prudential real-estate unit. All assessments are validated against actual sales performance before they are offered to clients.
Testing for Improvement
Thoughtful Inc. offers consulting and software for performance improvement, according to president Doug Kern. The firm tests the existing staff of a client company, including sales reps, to look for strengths and weaknesses. Sales candidates can be compared to the top performers within each company or to reps in the same industry.
Thoughtful is looking for competencies in specific areas. For example, there is an assessment of persuasion skills that focuses on three competency areas and an assessment of negotiation skills that was developed in collaboration with a lawyer specializing in this field. Another assessment, market intelligence, looks at knowledge of specific markets and industries.
The assessments are given over the Internet and take about 10 minutes each. Salespeople usually take two or three of the assessments, well after the initial screening and interview stages.
Thoughtful’s tests are not offered separately, but are part of its overall performance improvement engagements. The real work is in customizing a broad question list to suit each company, and then making sure the test works and has the managers’ confidence. After that, the Thoughtful assessments can be given very economically for as many recruits as necessary.
Kern says the purpose of testing both current and new salespeople is improvement, rather than simple selection. “You don’t go to a doctor to find out what is wrong with you, but to get cured,” he notes. Salespeople often have their own natural style, and all the coaching in the world will not change it. “We try to make improvements where they are weak and to exploit their strengths.”