Manage your payroll in the next 18 months or pay the price
Managing your payroll should be one priority in the next 18 months, and that doesn't mean firing your employees. It means making employee engagement your priority.
Read the full article: Disengaged sales team insights - manage your payroll or pay the price.
Imagine 20 percent of your HR staff quit tomorrow. Would you panic?
How about your managers and leaders? IT staff? Most of us would.
According to CSO Insights, on average, turnover rates in your sales department are on par with 20 percent.
When I look at this statistic, I think it is a dangerously expensive stat if we go with an average replacement cost of 150-200 percent of a sales employee's annual salary.
As we move into a recession predicted to be far worse than the last, you should worried about managing your payroll.
STATISTICS SHOW WE HAVE AN ENGAGEMENT PROBLEM
Let me hit you with some hard facts: your sales leader, sales manager, and every CEO must be made aware.
The statistics come from Work Institutes' 2022 Retention Report | How employers cause the great resignation and other reports:
More than 47 million employees will quit their job voluntarily in 2021.
The great resignation is absolute. Period.
In 2021, more employees voluntarily left their jobs than in any other reported year. Voluntary turnover in the American workforce doubled in the last ten years. For some added perspective, that is fifty-million people in the American workplace.
The key word here is VOLUNTARY turnover. Millions of actively disengaged employees left positions looking for better job prospects.
You may think – well, out of my entire organization, my sales department is paid the best and therefore least disengaged, least likely to leave – you're out of touch and in trouble.
The average sales turnover is 35 percent, higher than the average.
HubSpot reports that sales turnover is nearly three times higher than any other industry.
SiriusDecisions data also shows that almost half (45 percent) of B2B sales organizations have turnover rates above 30 percent.
Sales is inherently competitive. As companies grow, their need for additional salespeople also increases.
Sales reps can work almost everywhere, and the talent competition has skyrocketed despite the lack of genuine talent.
22% of your employees are leaving for career reasons.
Work Institute's survey looked at employee turnover finding that 22% of employees in America left their respective jobs stating career reasons.
Career reasons included leaving the position for:
Other categories of interest include:
10.9 % of job leavers cited that they voluntarily left their job due to job dissatisfaction, including stress, availability of resources, training, job characteristics, or products.
8.1% of employees left their job due to management issues citing issues with professional behavior, support, knowledge and sales skills, or communication.
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Only 9.5% listed the reason for leaving as related to base pay, benefits, bonuses, or commissions.
The survey highlights that disengagement is not salary fixed and is rooted in psychology.
It's also important to note that more than two-thirds of employees cited multiple reasons for leaving their position in the same survey – to improve employee engagement and retention rates, it's essential to look at all department areas.
In 2021, the turnover cost to employers exceeded $700 billion.
It costs an employer 150-200 percent of a sales team member's salary to replace them.
The estimated cost to replace a sales rep was around $150,000 in 2017. In 2021, Hire Velocity estimated it at 1.5-2 times what you'd typically pay a sales representative in that current role.
And that's not the worst part.
New salespeople take an average of 3.2 months to ramp to complete productivity. If the average tenure is 18 months, that leaves you with less than a year and a half before you pay those replacement costs again.
The cost of turnover for employers has doubled in the last ten years.
The Work Institute breaks down these costs into areas such as:
OPERATION COSTS
REPLACEMENT COSTS
TRAINING COSTS
LOST PRODUCTIVITY
It takes an average of 6.2 months to fill an open sales position.
Research from DePaul University shows that it takes over half a year to fill a sales role for most sales managers and reps.
That doesn't include the time it takes for a new salesperson to ramp fully.
And you may think, I have a sales manager or top performer that can cover that position till then.
No. Your productivity and revenue will take a hit. Period.
Do you need help with a disengaged team? Get a Team Assessment
Optimize your sales team with Kolbe and PRINT® assessments to identify team-member strengths and motivators and even illuminate bad-fit placements.
Let me be clear, if you were going to find the solution to your engagement problems, you would have solved them by now.
It's likely you need support and help to solve them.
I am solution-focused, so if you want me and my team to reengage your team, we will do so with our team assessment.
Concierge Family CFO for Founders
2ySolid insights my friend! Miss you, hope you, Ms Rose Garden, and the little one are well. Love to catch up if your down for it soon.