What’s the impact of making a hasty hiring decision? Think about the cost of a bad sales hire in your organization by completing the table below. You will need to calculate costs using your best estimate. Consult with others in your organization for help as needed. For example, human resources may have numbers on costs for recruiting, hiring and training a new salesperson.
Assume that the ineffective salesperson remains in the territory for three months.
While the poor sales performer is in the job for three months: | |
1. Lost sales revenue in territory (Calculate what the territory should be producing versus what a poor performer actually produces.) | $ |
2. Value of manager time, dealing with poor performer’s issues. | $ |
3. Cost of recruiting and hiring the poor performer. | $ |
4. Cost of training and coaching the poor salesperson. | $ |
5. Cost of low morale on team, caused by poor hire (think about burnout, turnover, and negative attitudes). | $ |
6. Value of human resource’s time facilitating the termination. | $ |
7. Other | $ |
When the poor performer leaves the organization: | |
8. Revenue drops in other territories while salespeople are covering the open territory. | $ |
9. Time and dollars spent repairing damaged customer relationships or making good on promises made by the poor salesperson. | $ |
10. Dissatisfied customers who left for a competitor (lost accounts). | $ |
11. Other | $ |
Total estimated cost of a bad sales hire: | $ |
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