15 Statistics that prove that Sales Turnover is Exploding. And Some Useful Tips for you to Reduce this Turnover at your Organization
9 minutes read
When players keep changing constantly, it’s impossible to win as a team. But unfortunately, this reality is staring in the face of many organizations today. I’m sure a lot of you reading this are experiencing it yourself.
This is a symptom of a global phenomenon known as the Great Reshuffle– a time of unprecedented turnover that’s particularly affecting sales teams. This is forcing the sales leaders across the world to spend most of their time hiring and onboarding new reps as opposed to focusing on strategizing and executing sales strategies.
So, what can you do to avoid this fate? By keeping yourselves informed about the current sales turnover scenario, you will be able to create strategies to overcome various problems.
So, in this post, we are going to share with you some statistics that outline the problems related to sales turnover and also help you with some useful tips to overcome this problem.
Statistics related to Sales Turnover
1. In 2020, about 58% of companies have seen a higher voluntary sales turnover.
A study conducted on more than 2,000 sales and revenue leaders found that more salespeople left their job over the past couple of years. Unlike other roles, where employees chose to stay in their current job, sales reps have been actively looking for new jobs and new roles throughout the pandemic.
2. In the last three months, turnover amongst sales professionals has gone up by 39%.
According to the insights drawn from the LinkedIn Economic Graph. Globally, job transitions have globally gone up by 28% over the last three months across all roles. While this is a big number on its own, it’s even bigger for sales professionals, at 39%.
3. In the technology/ software industry, voluntary sales departures are highest at 67%.
While the trend of sales reps leaving organizations is common across all industries, a few industries have particularly experienced a higher turnover. The technology/ software industry is one such industry that has recorded a 67% of sales turnover during the pandemic.
Why? The reason for this high turnover is because sales in the technology industry are mostly carried out virtually. So remote working and virtual meetings made it possible for sellers to seek new job opportunities at any time and from anywhere.
4. The average sales tenure in the top 10 biggest tech companies is 1.8 years.
According to HubSpot, the average sales rep tenure is 18-20 months. This is problematic because typically sales reps hit their peak performance between two and three years in their role. This means that most of the reps are leaving before they even reach their maximum potential.
We could partly put the blame of this on competitive recruitment but there is also a generational factor that is acting here.
The younger generation of employees (as in the Millennials and the Gen Z) are more likely to hop from one job to another. The reason for this is
- The millennials have entered the workforce during the recession
- And many Gen Zers saw their parents lose jobs during the recession
This made them value job loyalty less than the older generations.
5. Across the world, right now, sales professionals’ role is in the second spot in the most in-demand jobs category
While there are a lot of reasons why the turnover of employees is high right now, one main reason explains why the turnover amongst salespeople is even higher. It is because there’s a massive demand for their skills.
According to a report by LinkedIn Talent Solutions, sales reps are the most in-demand in the world today only behind software engineers. This means that if your sales reps want to leave, it’s likely that they won’t have much trouble finding another job.
6. It costs $115,000 to lose a salesperson.
Want to know what’s the cost of losing a rep? According to a study by DePaul University, it costs around $115,000 in the United States for an organization when they lose a rep. This cost includes the cost of,
- Acquiring a new sales rep
- Training that rep
- And also the opportunity cost of not having a person in the seat during that time
7. Recently, the global employee burnout rate rose by 9%
Glint’s September Employee Well-Being Report, found that the burnout rose to nearly 9% between April and July 2021. What does this imply?
This means, even if you retain your sales team, you risk them burning out which will greatly affect their productivity. So not only is it important to avoid turnover but also to engage your sellers and bring out the best in them.
8. On an average, to fill an open position, it takes about 6.2 months of time.
DePaul University’s research reveals that it takes over half a year to fill a sales role. And this doesn’t include the time it takes for a new rep to get to full productivity. Your productivity and revenue are still going to take a hit even if you get your other reps to fill in and cover for that position.
9. It costs over $2 million for a “bad” sales hire.
According to HR Daily Advisor, while hiring new reps, an average company spends approximately $100,000 which includes,
- $15,000 of hiring costs
- $20,000 in training
- And $75,000 for a typical first-year salary and incentives
Even after spending all this money, it takes time for a new hire to fully ramp. Or in the worst-case scenario, you have to replace that rep again. Now add the average quota for a sales rep to your hiring costs, and you could be missing out on about $2.1 million.
10. Within the next two years, about 44 percent of salespeople plan to leave their job.
Data from Deloitte shows that sales job loyalty is decreasing with the growing number of open positions. Within the next two years, nearly half of the sellers plan to leave their current jobs. And a quarter of them plan to quit their jobs within one year.
11. In the U.S. there are more than 2 million open sales positions.
If you search for sales jobs in ZipRecruiter, it pulls up over 2 million opportunities in the U.S. And this isn’t expected to slow down any time sooner. As economies around the world continue to reopen and reestablish the normal operations, businesses are likely to increase their sales force numbers.
12. Only 1-in-5 sales employees say that they really see a future at their organization.
Glint’s September Employee Well-Being Report shows that
- Only 1-in-5 employees today believe they can meet their career goals at their company
- And that their manager and organization support them in pursuing those goals
13. Professionals globally are increasingly prioritizing flexible work.
What changed the most for sales professionals from the pre-COVID times to right now?
According to a report from LinkedIn Talent Solutions, it’s their preferance for a flexible working environment.
The employees who feel that their organization is providing them the work flexibility, they are
- Three times more happier in their jobs
- And are more likely to continue in their role
14. Today, for sales professionals, their work-life balance matters even more than money.
This is a sign that times truly are changing. Glint found that professionals today care more about their work-life balance than how much they are being paid.
Having said that, compensation still matters for them but it comes second on their list. So, yes, you should keep paying your sales reps well.
But, you also need to consider the following:
- Are your reps expected to respond to emails immediately, no matter the time of day?
- When they go on vacation, do you still require them to take calls from customers?
- Do they have freedom in the week to do things like
- Picking up their kids from school
- Or attending their favorite workout class?
Earlier, sales reps might have been okay with being on ‘working mode’ always, if they were being paid enough. But today, that’s simply not the case. No matter how much you pay your sales team, they will leave unless they feel like they can achieve balance in their lives.
Tips to reduce sales reps’ turnover in your organization
While you can’t entirely eliminate sales turnover, below are some tips for you to improve your sales teams’ retention.
Prioritize your employees’ wellness, and provide them Work-Life Balance: focus on wellness is here to stay. So, allow your salespeople to have,
- Flexible working hours
- Give them reasonable time offs
- Connect with them personally from time to time and understand what would it take for them to thrive in their work etc
Give your Reps the Time to Sell: Your reps can easily get disengaged when they spend more time on administrative activities and less time selling. When your reps spend more time selling, they tend to be happier, and more engaged. As a result of this they perform better. Usage of the right sales technology can help you reduce the time that reps spend on administrative tasks and increase the time they spend on selling.
Develop Clear Career Tracks: Have one-on-one meetings with reps to understand their career goals and create a clear path for them to advance in their career. This will make will increase your team’s loyalty towards your company.
Benchmark Incentives: Compare your sales incentives to the industry data to ensure that your compensation strategies are competitive. This allows you to attract and retain your top performers.
Review and update your compensation policy: Companies’ compensation policies have been one of the top reasons for the sales reps to leave their current jobs. With the increase in recruiting competition, reps have been able to seek out higher pay and faster promotions through job-hopping rather than staying at one company for the long term. So it’s crucial for you to take a look at your sales compensation policy and understand if your reps are happy with the way you are paying them. In case they seem dissatisfied, consider increasing the size of their pay or frequency of payment or any other creative approach that might work for your organization
Frequently provide learning opportunities: Giving your reps the opportunities to improve their skills and grow as professionals, from time to time, can also help in retaining them. So, train them, coach them and provide them with the resources that they can use to learn by themselves. This way when you show interest in helping them to grow in their career, it fosters their loyalty to your business.
These measures will help you
- Prevent employee burnout,
- Keeps your reps’ engagement high,
- And increase their sales retention
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Published on Mon Jan 10 2022