August 26, 2020

Don’t Waste Millions of Dollars on Bad Sales Hires

By Mike Kunkle, VP Sales Effectiveness, SPARXiQ

Making poor hiring decisions is expensive. The U.S. Department of Justice (DOJ) suggests that replacing a bad hire costs 30 percent of their total compensation. Considering opportunity loss, I’ve seen replacement costs as high as a million per person in an enterprise B2B complex sales environment. That’s a painful reality. So how can you minimize it?

The solution is a sales hiring system. In this article, I’ll highlight just a few of the eight key components in my sales hiring system. If you’re interested in exploring them in detail, you’ll find a link at the end of this article.

Assessing Competencies & Traits
Determining the competencies (skills and behaviors) needed for sales success in each of your roles is foundational. So list them all and create a library. It’s OK that some roles may overlap and other competencies may be unique.

It’s also important to determine the traits (e.g., attributes, characteristics, and mindsets) required to support the above competencies and thrive in your various sales roles. Selling requires certain mindsets and traits – more like being an Olympic athlete than an accountant. These desired traits may also vary by role.

These competencies and traits inform virtually every other component of the sales hiring system. Use them as you build job descriptions, design interviews, and configure a statistically-validated hiring assessment you select to evaluate candidates.

Interviewing: Behavioral & Hypothetical
As you move into the interviewing and selection phase of hiring, the tendency is to look at things more subjectively. However, this is where staying rooted to our foundational competencies and traits can make a huge impact.

Behavioral interviewing is a well-established, effective, yet underutilized method for hiring. Behavioral questions ask the candidate to share experiences that can reveal strengths or weaknesses within your competencies. A simple example:

“Tell me about a time you couldn’t get a response from a key prospect, and what you finally did to break through and land a meeting with them.”

In addition, hypothetical questions can also help establish what candidates would do in certain difficult situations they are likely to face when selling for your company. This can be especially helpful when they haven’t faced the exact behavioral situation, or if you’d just like to see if they think like your top producers. Establish some challenging hypothetical scenarios (preferably built from real examples your sellers encounter) and prepare questions and best-case responses to assess candidates’ answers.

Keep in mind that hypothetical questions help you determine the candidate’s judgment about what to do in challenging situations and whether they think like your current top producers. Still, they do not assess behavior, skill, or the ability for the candidate to do what they say.

Validating Skills
Would you hire a musician without hearing them perform? A dancer without an audition? How about a baseball player without seeing them play?

Although we can’t observe sales reps from other companies the same as we can with the above performers, you can orchestrate ways to validate their skills and “see them in action.” You can create role plays or simulations to verify that candidates can demonstrate the skills they claim to have.

  • For candidates who would be doing a lot of prospecting, have them email you, call you, and leave a voicemail. Provide a case study and see what they can do.
  • For account managers, provide a situation and have them run a meeting or give them some simulated account information and ask them to present an account plan.

Use your imagination but keep the tasks and sims as real-life as possible – and see how candidates handle themselves.

Putting It All Together
When implementing a sales hiring system, it’s critical to have a structured, logical process for executing and to link each component of the system. Different companies require different levels of sophistication, but the core components apply to any sales organization. I hope this gets you started on the path to hiring more effectively for your critical sales roles.

Mike Kunkle is VP of Sales Effectiveness Solutions at SPARXiQ. You can download the ebook of The Sales Hiring System here.