Recruiting Driving Revenue

Organizations that leverage best practices in sales hiring will decrease time to fill and increase profits.

By The Editors

The impact of hiring the right sales people at the right time cannot be overstated. Without sales driving top-line revenue, every other part of the organization— including operations, marketing, and finance—will fail no matter how well these departments have executed their responsibilities. Recent research from HRO Today and WilsonHCG shows that while 58 percent of recruiters track the cost per hire of a sales position, they don’t have clarity on the cost of not hiring quickly. This means HR managers are often lacking the information they need to make the best recommendations regarding the urgency needed in hiring sales representatives. 

The study also revealed that HR managers don’t have the information they need to best convey to the C-suite the importance of keeping their sales team fully staffed. Organizations can quickly lose thousands—or even millions—of dollars in sales if there are openings left unfilled for longer than necessary. A fully-staffed sales team is critical to the bottom line.

By applying findings from the study into the Sales Force Recruiting Calculator (a free web-based tool on HROToday.com), the impact on revenue of unfilled sales territories is clear. For example, a medium-sized company with 100 sales representatives would see a reduction in revenue of $4.5 million per year when experiencing average turnover, average days to fill, and average revenue per sales territory.

On the other hand, organizations can see a positive impact on revenue when they reduce the average time-to-fill rate. For example, a company with 100 sales representatives that reduces their time to fill by 10 percent (from the average of 58.1 days) would see nearly $500,000 in increased revenue. The same company would see an increase of $1.4 million if there was a 30 percent reduction.

HR’s use of sales force data in recruiting has impacts in other ways, including:

• Among the 58 percent of respondents that do track cost per hire, the average is more than $4,000. This amount is exclusive of the opportunity cost of lost sales early in a new hire’s tenure, training, first-year salary, and incentives.

• The average time to fill a sales role is 58 days. This means that for every representative that leaves an organization, it takes more than one-quarter of the number of working days in the year to replace them, a huge loss in sales potential.

• Only 17 percent of HR recruiters know the average amount in sales achieved in each territory. This information is a key metric in quantifying the need for optimal sales force recruiting.

• Seventy percent of respondents couldn’t approximate the percentage of time each sales territory has a full-time representative. Those that did know indicated that 91 percent of the time a representative is in place. This means there is 8.2 percent inefficiency in sales territory productivity.

Posted August 17, 2017 in Talent Acquisition

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