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Recruiting Sales Talent Major HR Challenge

Written by: Peter Gilbert

Article Overview: Worldwide companies are dreadfully inept at consistently hiring the right kind of sales talent for the right jobs. There's a higher level of failure and personnel churn in sales than in any other business function. Research indicates that hiring accuracy runs anywhere between 35% and 55%, depending on the sales role. Jobs such as outbound telesales and commission only life assurance sales are particularly problematic. Using the best possible tools greater than 90% hiring accuracy is quite achievable.

Recruiting Sales Talent Major HR Challenge

Our customers have changed. The economics of our businesses have changed. Our markets have changed, and we face new competitors on every front. Is it any surprise that our sales organisations must change to adapt to dramatically changed circumstances? But, in many cases, sales organisations and the HR functions who support them, have failed to respond.

“Irresistible new forces are reshaping the world of selling. Sales functions everywhere are in the early stages of radical and profound changes comparable to those that began in manufacturing 20 years ago… But one change outweighs all the others. The meaning of selling itself is shifting. The very purpose of sales is being rapidly redefined.”
Neil Rackham “Reinventing the Sales Force”

Dramatic shifts in buyer-seller relationships have seen the balance of power swing back from sellers to buyers. In short, buyers have become better at buying than sellers at selling. Sales organisations face huge challenges because there is no longer any sustainable competitive advantage through product superiority. Author Jerry Stapleton points out that a second problem is that the sales reps customers just do not need them any longer. At least not the way that they used to. Traditionally salespeople brought value to their customers by facilitating transactions and communicating information about their products and services. Almost overnight these two core functions of salespeople have lost their value. These functions, once the life blood of selling, are diminishing in value as a new era of selling is replacing the old. Customers will not pay for them and often will not even tolerate them. They are making that known to their suppliers.

The market today is demanding highly professional and highly specialized salespeople who have a new focus: demand creation, philosophical alignment, in-depth understanding of their customer’s businesses, positioning, executive credibility and the delivery of value. These people are in desperately short supply and sales organisations are increasingly turning to their HR functions for help and guidance in recruiting the new sales talent, and finding that the cupboard is bare.

Research is revealing that the calibre of the salesperson has become the single major determinant of whether customers will buy from your organisation or not. So having the knowledge tools and processes to identify genuine sales talent is vital.

Factors Influencing Customers’ Decision to Buy

• Price 18%
• Quality of product/service 21%
• Offering a total solution 22%
• Calibrid of the salesperson 39%

Key Learning No. 1
Sales is becoming increasingly specialised and there are at least 14 different types of salespeople. So it is absolutely crucial to understand what type of salesperson is most likely to succeed in a specific sales role. There are simple tools available to make this determination.

Key Learning No. 2
Really great salespeople are often not much interested in theory and tend to be intuitive rather than academic. They are definitely not stupid, but they have other priorities. In HR Chally’s database of over 500 000 salespeople there is an inverse correlation between academic achievement and sales success, so many organisations who demand rigorous academic standards, often screen out the best sales talent. This is particularly common in banks and IT companies.

Academic Achievement and Sales Success

Key Learning No. 3
Sales is more a talent based than a learned skill. You can teach anybody to play golf, but you could not turn the average weekend golfer into a Tiger Woods. It is the same with sales and the rule of thumb the 20% rule applies for training salespeople. You can turn a 5% into a 6% (a poor investment) but you can turn an 80% into a 96%.

Key Learning No. 4
Hiring accuracy for sales performance is generally poor – often little better than making decisions based on the flip of a coin, because the most common tools used for recruitment are ineffective.

Hiring success rates aren’t much better than a coin toss*

Selection Method Improvement Over “Chance”

Typical Interview 1% increase
Personality Tests 1% increase
Experience 5% increase
Scorable Interview 7% increase
Criterion validated test 25-35 % increase

*“International Personnel Management Association, Feb. 1999”

Key Learning No. 5
Sales managers and HR departments draw up long laundry lists of desirable attributes for salespeople, with no evidence about which are important and predictors of on-the-job performance.
Statistical research (validity) studies on predictors of job success indicates that the single most important predictor skill or criteria, accounts for almost half the total success prediction. Each additional criteria adds around 50% of the value of the preceding one.

1st Factor 50%
2nd Factor 25%
3rd Factor 12%
4th Factor 6%
5th Factor 3%

More than 6 factors actually dilutes the accuracy of selection.

Key Learning No. 6
Evaluating personality instead of job skills has proved ineffective in predicting in future performance in different job roles. This is especially problematic in the popular “short tests” with 20-30 questions. Some tests that fall into this group are: - MBTI (Myers Briggs Type Indicator), DISC (Dominance, Influence, Steadiness, Conscientiousness), PIP (Personality Interview Profiler), PSI (Personal Style Inventory), OPQ (Occupational Personality Questionnaire) and many others. Many of these tests are useful but not predictive.

Any truly effective sales recruitment system would contain the following elements or steps: -

1) Clearly understand and define the specific sales role.
2) Understand that you find different types of salespeople in different places.
3) Define your “disqualifiers” and screen out unsuitable candidates.
4) Develop a preliminary short list and utilize role specific, structured scorable interviews to develop a short list.
5) Consult thorough reference checks.
6) Finally, utilize a criterion validated predictive test to determine the candidates suitability for a specific role.

As a guideline, you should achieve 90% or better hiring accuracy and a 20-40% improvement in sales productivity.

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  4 Building Blocks of an Effective Talent Management System
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  Organizational Talent You Need To Succeed

Article Tags: alignment, balance of power, buyer seller, core functions, credibility, demand creation, dramatic shifts, hr functions, life blood, neil rackham, new era, new focus, power swing, product superiority, profound changes, sales functions, sales reps, salespeople, stapleton, sustainable competitive advantage



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