The Hidden Costs of Recruiting Sales Teams

Published on Apr 10, 2019 by Michael Hanson | 7 min(s) read time

Sales teams end up recruiting new employees far more often than other areas of business. In fact, the annual turnover rate for salespeople is around 20%. If the rate is that high in your organization, that means you’re replacing your entire sales team every few years.


What causes employees to decide to make changes and move from company to company? For some salespeople, it’s because the sales field is competitive. Because of the always-on, proactive nature of sales, ambitious and driven team members are highly valued and can command the salaries they desire at multiple companies.


For others, it’s burnout: work-related stress and exhaustion that can affect their overall physical and mental well-being..


Between burnout and the competitive nature of the field, managers of in-house sales teams can end up spending a lot of time recruiting, hiring and training new salespeople, just to keep their teams fully staffed.


While it can be personally and professionally frustrating to lose good salespeople, it also has a big impact on your business finances. Working with an outsourced sales team allows you to skip right past these additional expenses and focus your time and resources on achieving your sales goals, rather than on continuous recruitment of new sales team members.

Training

The average onboarding and training time required to get a salesperson fully up to speed is nine months. Combine that with the burnout and turnover rates seen in many sales groups, and you can see how costly keeping your sales team staffed can be.


And, the expense of training isn’t just a time-based expense for your new staff members.


One of the biggest costs associated with recruiting new teams is the expense of taking yourself or your valuable sales team members out of commission to provide training for the new team members. Every hour that you’re not working toward your sales goals can really cost you in the long run.

Finders Fees

Some recruitment expenses are par for the course. For example, you’ll need to cover salaries for your HR team, and you may need to spend money on advertising, whether through traditional means like industry magazines and newspapers, or through social media, online job boards, and other similar channels.


One big cost associated with finding good sales professionals quickly is finder’s fees. More technically referred to as retained search contingency fees. These costs are regularly around 25% of the guaranteed annual salary of the salesperson you're seeking to hire.

 

Finders fees

 

When your staff turns over regularly, that 25% on each new hire can add up and can hinder your ability to function efficiently.

Background Checks

While background checks are not a prohibitive expense, they can run between $10 and $200 each, depending on the level of detail and information you require. Running these checks for multiple candidates can add up, particularly if you have high turnover.


It can also be expensive if you run background checks for offers, then have the candidate back out, leaving you to start the process over. And, according to the EEOC, there are regulations regarding safeguarding and safe disposal of background check information and candidates’ personal data; additional regulatory work usually means an additional expense as well.

Retention

As previously mentioned, training and onboarding new sales team members costs valuable time. Another negative effect of the new employee process can be the psychological impact on your current employees.


It can be frustrating to see old team members leave, to be asked to pick up the slack when you’re in between hires, and to take on training responsibilities. Seeing former coworkers winning prestigious titles and salaries at other firms, or seeing new team members join with more experience and upward mobility can both be very frustrating.


If you’ve already seen high turnover, you may see the trend continue as frustrations mount and your current employees begin to look for excuses to leave or begin to be recruited by former coworkers and friends. Fifty-one percent of sales employees plan to look for a new job within a year, which means half of your staff might be searching and leaving you high and dry if they feel overwhelmed and underappreciated.

 

Retention-1

 

All this information paints a bleak picture of the frustrations that come along with keeping a fully staffed sales team. Is there a solution?


You can’t just stop selling; your business won’t survive. However, you can sell smarter by finding a partner in managed sales, someone who can take on the burden of managing the sales team, allowing you to focus on building a successful sales strategy.


Managed sales teams are outside partners that help you generate and nurture leads; they provide a conduit for sales success. By outsourcing some of your sales functions, you can be more efficient and grow your business without the added stress and expense of continuous sales recruitment.

Zero Downtime

If you lose a salesperson on your team, the recruitment, onboarding, and retention cycle starts all over. If you’re working with an external sales team, any attrition on their side is seamless for you.

 

They maintain the resources on their end to plug in a new salesperson, and they also have training and quality resources on hand to help them avoid downtime or loss of productivity on your behalf. In many cases, they can even surpass your current efforts by offering 24/7 connectivity through sales chat, to make sure you collect and act on every potential lead.

No Hidden Training Costs

According to the Society for Human Resources Management, it can cost six to nine months' worth of salary to get your new salespeople up to speed. If you have a $50,000 employee on staff, that can mean carrying an extra $30,000 to $40,000 in training costs for that employee alone.

 

Seamless-1

 

When you work with an external sales team, their training resources are rolled in to your overall expenses.

Reduced Mental Load for In-House Team Members

When tenured in-house sales team members are expected to wear many hats, they’ll probably comply out of loyalty to you and the company. But it may have a long-term adverse effect, leaving them engaged, but exhausted.


They’ll do anything for you and the company, but without some relief and support, they’ll also see a toll on their mental and physical well-being. And according to the Harvard Business Review, they’re the most likely to be ready to consider a move to a more promising company in the future.


How then, can bringing on a managed sales team take away some of the effects of hidden burnout? By working with managed sales, you can determine what your employees actually enjoy doing, then divert their efforts to those areas.


Instead of tasking these valued in-house team members with sales-related tasks that are mentally and emotionally draining, find out what energizes and excites them, and give them an opportunity to really shine in those areas.


The managed sales group can provide support and take on tasks that you designate, giving your in-house team members the chance to focus on areas that engage them and help them to shine.


And, rather than piling work on them to pick up the slack when another team member leaves, the managed team will keep those efforts rolling forward and give your internal people some respite.

Focused Strategy

When you’re managing all your sales efforts internally, your talents are split. Instead of being able to go full steam ahead and develop a meaningful strategy, you’re spending part of your time digging into the business side of your work, then, probably at a meaningful moment, being pulled away to focus on personnel and recruiting issues.


This switch lessens your overall productivity and takes away from the time you need to focus on reaching goals. With a managed sales team taking care of the backend personnel issues, you can instead spend your time researching, preparing, and learning, giving your strategy the attention it needs to help you grow and generate additional revenue.


The hidden costs of recruiting don’t have to affect your business success. Whether you choose to outsource a portion of your efforts or to work with a managed team to build an all-encompassing strategy, you’ll have the tools at your disposal to be more efficient and productive when it comes to building and maintaining a successful sales team.

 

What’s the biggest issue you’ve had to overcome when it comes to recruiting and retaining sales teams? Feel free to share it in the comments below:

 

 

Ever thought about outsourcing sales:

Getting Started with Outsourced Sales

Topics: sales