When Lack Of Sales Employee Turnover Hurts Your Company

By September 18, 2018 Uncategorized

Most every company recognizes thata problem exists if they can’t keep sales employees around. In fact, they usually try to shrink the employee turnover rate as low as possible. After all, who wants to spend a bunch of time training and investing in their sales reps just to see them leave?

But if your sales team has an employee turnover rate of 0? While you may be tempted to be proud of this accomplishment, the hard fact is that you may just be losing money.

Let’s break down the dangers of an extremely low employee turnover rate and talk about what healthy turnover should look like for your sales team.

What Is Healthy Employee Turnover?

It may seem counter-intuitive to consider low turnover a problem. After all, isn’t high turnover rate an indicator of an unhealthy environment?

Sure. But that doesn’t make the opposite extreme healthy either.

The fact of the matter is that a static workforce is sending you a glaring message:

If nobody’s leaving your sales team, there are people on your team that are underperforming. Click To Tweet

Now, we should be clear: we’re not talking about your leadership team. If your leadership team is turning over, you need to really evaluate your company’s values, message, and direction. Leadership turnover is usually an indicator that there’s something out of whack with the health of your entire organization.

But for the rest of the sales team, you should expect an employee turnover rate between 20-30%. If it’s less than that, chances are you have folks on board who aren’t delivering what you expect of them.

The 80/20 Rule: Who’s Contributing?

It’s actually a fairly well-studied phenomenon: the 80/20 rule. Also known as thePareto Principle, the basic premise is that 80% of effects are caused by 20% of causes.

If you translate that to your sales team: that means that approximately 80% of your sales are coming from the top 20% of your sales reps, as a rule.

With that in mind, consider your team. Is it fair for the top 20% of the team to carry the underperformers at the bottom? Is there any reason to keep the bottom 80% around at all?

Well, the goal is to take the bottom 80% of your sales team and bring them up to the level of your top 20% of performers. Conventional wisdom would say that you should invest in the bottom tier performers and try and elevate performance starting with your weakest link.

However, consider this:

Phil Mickelson is one of the greatest golf players of all time. Only Jack Nicklaus and Tiger Woods have more top-3 finishes in major tournaments. But Mickelson has only won 5 majors, a mere 22% win rate. When you compare that to Nicklaus’ 56% win rate and Tiger’s 67%, you recognize Mickelson as a serial 2nd place finisher.

Now, imagine you could influence a PGA performer and improve their performance. You could boost the play of the lowest ranking member of the PGA tour, or you could boost Mickelson’s performance. Which do you think would have the bigger impact?

In the same way, look to your sales team and find the serial 2nd place finishers. What’s holding them back from greatness? Improving their performance can prove to be far more influential to the team, and to that rep, than trying to drag up the lowest performers on your team.

How can you build a team with a healthy employee turnover rate, that continually tries to improve the performance of the team as a whole?

One word: accountability.

How Do You Hold Your Sales Team Accountable?

When you hold a team accountable for their performance, it enhances the productivity of the team as a whole.

Think about the company culture that you’re trying to create within your sales team. You’re looking for a way to set goals and expectations that are healthily in line with your values, and help keep the team on track to achieving those goals, from leadership on down.

You want accountability on every level of your organization. Your sales team should hold leadership accountable for living up to the company’s values, and the leaders should hold the individual team members accountable for their performance. When they don’t, some sales reps end up doing more work than others, and carrying the bulk of the team on their shoulders.

This obviously isn’t fair, and it can lead to resentment. Resentment is a cancer on a sales team- so don’t let it get that far!

One thing to keep in mind: accountability is not the same thing as micromanagement. Don’t just ride your team members for every little thing- it’s a guaranteed morale killer. Instead, have very clear goals and very clear key performance indicators (KPIs) to measure progress toward those goals.

How Does Your Team Keep Growing?

If you have an employee turnover rate of zero, or close to it, you’re relying on the top 20% of your performers to carry the rest of your team… who aren’t being held accountable.

If you’re in this position, you’re not growing. And when it comes to sales, if you’re not moving forward, you’re moving backward. So how do you re-direct your team toward success?

Keeping the bottom 20% of performers on your workforce may be dragging your team’s performance down. If you have a clear plan for success with clear benchmarks and goals, and are holding your team members accountable for attaining those goals, it should be clear who is committed to moving forward and who isn’t.

You’re not doing anyone a favor by keeping a team member who isn’t committed or able to contribute to the growth of the sales team. If they can’t live up to the benchmark, it may be worth transitioning those employees out of their roles and looking for replacements.

Keep your goals and benchmarks in mind when moving forward and hiring new members of your team. Have a standard and an assessment to compare candidates to, to get a good idea of where they would land on your team, performance-wise.If they wouldn’t land in the top 20%, then find a candidate who will.

If you are intentionally growth-minded and build your sales team’s culture around staying accountable for that growth, you will find your team naturally falling in line with healthy turnover rates… and a healthy bottom line!

If you’re looking to build a top notch sales team by hiring the best sales talent, EAM Staffing would love to talk to you. We partner with our clients to build benchmark sales teams for every industry.Learn more about our recruiting process and let us help build your best sales team.