Mitigating Hiring Risks

By Jeremy Miller

Hiring the wrong sales people is an extremely effective method of burning up cash. A sales force can cost up to 40% of a company's total revenue. This is very evident in business-to-business markets where the lion's share of the sales budget is spent on sales staff salaries, commissions and expenses. Hiring the right sales people makes all of the difference in corporate performance.

For many people, hiring great sales people is considered an art. It's not. It is a structured business process that must be defined and maintained to effectively acquire and grow your most important assets, your people. Developing an effective hiring strategy is a 3 step process.

Step 1: Job Profile - Defining the traits for success

The majority of hiring managers enter into the interviewing process blind. They may be equipped with a job description, but the true characteristics of success in the position are not clearly defined. As a result managers look for archetypal traits of sales people without any indication of what defines success in their environment. Sure a candidate might be a go-getter, have great communication skills and a track record of selling above plan, but is that enough?

Hiring people is an emotional process. The first step to mitigating hiring risk is to develop a clear picture of success for the role. You will improve your hiring accuracy by 50% by clearly defining the critical incidents and traits for success in a position. A typical job description just does not provide enough relevant information to help a hiring manager go beyond the surface to what really matters for the role. The key component missing in a sales job description is the Selling Dimensions.

Each sales environment is unique. A customer's buying patterns provide key indicators to identify the duties and skills required for the position. Customer purchasing patterns should be divided into four primary phases:

Interest creation is the universe of companies that can be targeted. Does the position target a broad market requiring extensive cold calling, a narrow market reliant on relationships or a competitive landscape of companies switching from one vendor to another?
Pre-purchase phase is the traditional view of driving an opportunity through the sales funnel. What steps do your sales reps take to move a prospect to a customer? Are they working with existing customers trying to up-sell services? Do they take prospects through extensive discovery and value creation phases to build the business case to purchase?
Purchase phase is the steps a customer takes to make their final decision: choose the solution, negotiate and complete the appropriate buying commitments. In a tendering process the sales people may not have any influence on the purchasing phase, while in a more competitive environment the sales person might be negotiating heavily over price and deliverables.
Purchase phase is the steps a customer takes to make their final decision: choose the solution, negotiate and complete the appropriate buying commitments. In a tendering process the sales people may not have any influence on the purchasing phase, while in a more competitive environment the sales person might be negotiating heavily over price and deliverables.
Post-purchase is the delivery and implementation of the solution. Is the sales person involved in the implementation? Are they separated from the account after the purchase phase? Do they provide first level support to identify problems before they are reported to a technical support group?

By defining the key activities that drive a customer through each phase provides critical information for the selection process. It allows the hiring manager to have clarity on the type of experiences that are relevant to their selling environment.

Step 2: Behavioral Profile - Success comes from within

The makings of great sales people are in their internal programming. The components for a person to be successful in a role is 45% behavioral profile, 25% intelligence, 20% motivation and 15% skills. With that key insight it is critical to go beyond the resume to find what makes a person successful in a position.

Behavioral assessment tools are an effective method of identifying the traits for success. It is very common to incorporate an assessment tool like PDP, DISC or Myers Briggs into the hiring process, but if a candidate's profile is not compared to an "ideal profile" then the information is largely irrelevant. To develop an ideal behavioral profile, scan your top performers and group the common traits that these sales people possess. By developing an ideal behavioral profile an assessment tool becomes very powerful. It is used to focus the hiring process on the candidates with a 70% or higher match to the position's profile. The tool should not be used for final selection, but provide the baseline requirements of who should enter the shortlist.

Step 3: Structured Interviewing - Picking out the top performers

Interviewing is a two-way dynamic process. On the one hand you are marketing the opportunity, and at the same time you are qualifying the candidate for the job profile. Sales people are savvy interviewers. Just by reading books like Spin Selling, Strategic Selling and Selling to VITO, a candidate will be able to demonstrate an understanding of solution selling methodologies. They will articulate that they sell to "C-level," they use strategic account planning and they make 25 cold calls per day. The information will sound great in an unstructured interview, but this information is simply peripheral. It does not demonstrate any connection to the requirements of the selling dimensions listed in the job profile.

A structured interviewing approach that combines a variety of questioning techniques is most effective for sales positions. The basic structure is a reverse-chronological interview. Start at the point the candidate entered the workforce, usually after completing university or college, and move forward. Use the historical view to identify trends. With each position ask questions such as:

1) What were your responsibilities?
2) What was your starting salary and finishing salary? Be sure to break down compensation into base salary, on target earnings and actual earnings.
3) Why did you leave the position?

Use these questions to not only develop trends, but to see how the candidate reacts to the questions. In combination with the structured interviewing questions incorporate behavioral and situational questions to compare a candidate's track record and experience to the job profile. Behavioral questions are structured questions to identify a candidate's past career track record, while situational questions are experiential or "what if" questions. Use a set of up to five questions for every position to develop a baseline for comparing candidates to one another.

Putting it all together

An effective hiring process is systematic, objective and thorough, but it must also be fast. In a hot job market, top talent does not wait. Every company is competing for a limited pool of qualified candidates. The key to mitigating hiring risks is to bring clarity to the position. The job profile and behavioral profile provide human resources with the search criteria to build a pool of applicants, and the hiring managers with the selection criteria to consistently hire the right people. When the process is focused onto the right field of talent the hiring process moves from a gamble to a strategy. Organizations are not naturally equipped with effective selection skills. The onus is on the senior management team to implement best practices and processes for building top performing sales teams.

Jeremy Miller (Jeremy.Miller@LEAPJob.com) is a Partner with LEAPJob (www.LEAPJob.com). LEAPJob is a recruiting and sales force consulting firm that helps companies achieve their growth targets by building top performing sales organizations. You can reach Jeremy at 905.281.3090, Ext. 22.