In a Tight Labor Market, Are You Hiring for Failure?
The process of hiring great sales talent, often discussed, is critically misunderstood. This article is written to assist business managers and in-house recruiters. The good news is that there is an almost infinite supply of great salespeople available. The bad news is that there are a few corrupt players that are great at fooling you into thinking they can sell. There are also a few that genuinely believe they can sell but can’t. Finally, there is a large group of people who can sell but if onboard thoughtlessly, they fail. The process outlined here will help you avoid the high expense of bad hires in sales. I developed these steps while at Confio Software (now a part of Solar Winds – an info tech tools company), over three years, with the help of my CEO, Matt Larson. This process is mostly timeless since it relates to the behavior and experience of humans, unrelated to any pop culture or generational thinking about personal sales productivity. I did not cover the legal elements to hiring as this is better handled by your legal counsel since each state has its own rules along with the Federal laws.
If this helps to do one thing, I hope it reduces the number of companies using a “revolving door” tactic. That is to say; companies should never think it ok to hire anyone using only a few qualifications (e.g., hire anyone working on a particular industry in sales positions) and fire any that don’t work out, keeping the ones that work. This tactic demoralizes your existing sales team as they don’t like seeing wasted time and resources hiring bad reps. This also hurts the people who fail as most of them are expecting to make a career and income to support their families (i.e., they plan to succeed). Finally, this tactic is expensive to companies in time and money, not to mention the discomfort faced by explaining the high turnover rate to management or board members.
This process is for sales role hiring only. Salespeople are a unique type of employee. The search for them is different from other functions in the company – I’ve commented to some business leaders that a great salesperson may not be someone you’d want as a regular friend (owing in part to their unusual behavior characteristics – although, some may find the combo attractive). I am not saying that other positions do not deserve an equally thoughtful and unique process.
The topics discussed here are:
· Where you find producing salespeople
· Recruiters, for those who must delegate
· Screening out the duds
· Discovery Interviews, the Early Screening Process
· The Pitch, locking down all candidates early on your position. Skip this step and risk losing good candidates at the end of the process (e.g., in the offer stage)
· Formal interviews and the more in-depth screening process
· What candidates should and shouldn’t be asking
· Reference calls, how to do them and the reasons they are valuable
· Behavior testing, identify the people better suited for sales and understand how to motivate them individually
· The Counteroffer discussion locks down prospective reps and avoids wasted time with failed offers
· The Offer, its parts and the steps to deliver it effectively
· Criminal Background and credit check and the risks this step eliminates later
· Onboarding ensuring the highest probability of success
Where you find producing salespeople
Finding candidates can be a daunting task, especially if you leave it for that time you need new people. The simple way to avoid being caught unprepared is always to be looking for prodigious reps (e.g., networking events, accepting LinkedIn connection requests from reps, open positions published to your website). Be sure to share your hiring plans with your org as posting a new job without informing the team runs a high risk of “water cooler” talk.
The very best source of candidates I have found is inside of your organization – specifically, friends of current employees. What makes them best is that they have a pre-screen built-in. Your company’s current employees will hesitate to offer any names that might be questionable. You will need to enlist the 7×7 rule though (personal rule: communicate 7 times 7 different ways before assuming your message is delivered or that you might be ignored). Some employees are careful about offering any names to you as they see the risk of your non-acceptance reflecting on their character judgments. By using the 7×7 rule and asking across the entire organization, you should have more names to work through than needed. Where I haven’t seen this work is inside of dysfunctional cultures.
I would avoid any incentive systems to encourage compliance with this request as it leads to lower quality candidates. Enlist your people to help with building a better company, their knowledge, and circle of friends has a value that’s immeasurable!
The Prospecting Pyramid
With today’s social internet resources, you should also work to find prospects on these services you’re using. I use LinkedIn extensively for this as well as Twitter.
These people resources come in all shapes and sizes. Most do not specialize, but many do, and those are the ones you want. When you have an immediate need (e.g., a critical position was just made vacant, and you have nobody waiting on the wings), a recruiter can be a godsend. Also, when you have a high existing workload, a recruiter is your best option. And finally, many people use recruiters to augment this process. The pyramid’s reference is only related to hard dollar cost, the total cost when time is considered can make them the best option. Use the pyramid as a reference to all sources available only.
The key to their effectiveness is how their specialization matches your positional need. The worst fit would be someone who doesn’t specialize and has never helped to fill a sales position. Do not be fooled into thinking that all recruiters sell people so they should naturally know how to find you a great salesperson.
Recruiters will work on different pay structures with the most common being 10-20% of the employee’s 1st-year target earnings. If you’re building a team fast or from scratch, you might consider negotiating a flat rate contract. You’ll also want to know what their policy is for hires that don’t stick around. Most will cover you for one year and provide replacements for anyone that skips out before then. Many will not hold to this policy for people that you decide to release.
Some recruiters will ask for an exclusive agreement. There are several forms of this type which seeks to tie your hands on getting prospects from other sources. The most common form forces you to pay the contracted amount for any hires regardless of source. In the case of higher-level positions, this type of agreement is somewhat common. However, in the case of individual sales contributor hiring, I can think of only a few reasons to get tied down to one recruiter. A better option is to hire an on-staff recruiter(s) when dealing with fast growth organizations. Be sure that you understand any internal recruiter’s experience (with hiring salespeople), so you’ll know when to offer them guidance. It’s my experience that many in-house recruiters are new to hiring salespeople.
Screening out the Duds
The first step should be to screen out whom to talk with from the resumes you receive. This step is simple and fast if you define a few “deal breakers.” One screen that I use for all but those just out of school is 4-year terms with prior employers. I will remove anyone without at least one place they stayed around for 4(+) years (this help to ensure the person is capable of committing). I will also remove anyone that leaves off their phone number, their address, or has many spelling or grammar errors (after all, sales is a communications role where details matter). I would disqualify my mother on any of these items (disclaimer: I love my mom).
Discovery Interviews, the Early Screening Process
Now with your screened resumes, you’ll want to call them and introduce yourself as the hiring manager (you’re doing this as an unscheduled task with them intentionally). The purpose of this call is to identify the fit with your current opening (keep in mind that this person might be a good fit for something later, so keep an open mind as you start these conversations and leave a positive impression regardless of their outcomes). Set aside 10-15 minutes to talk with each person. If they match what you’re looking for from the list below, offer them a date to meet/video conf or give them instructions on how the next steps in the interview will proceed (e.g., when you have someone in HR or an admin that will help with the scheduling details).
1) Is the person still looking for a position? (Obviously, you don’t want to move forward with anyone that just accepted another position – don’t make excuses for this to yourself either, anyone that will drop a new job will do it with you too, the “grass is greener” logic shows a lack of maturity you don’t need in your team)
2) Do they seem comfortable speaking with you? Do not make excuses for them, like you just caught them off guard. (Talking to strangers is a critical part of any sales job. Anyone not easy to talk with is someone you must avoid)
3) Are they asking about details relating to compensation or benefits? (Although this might seem logical, it’s a sure sign of a salesperson that’s inexperienced) Tell them they’re not an ideal fit and close down the call.
4) Do they seem desperate? (Desperation kills sales, anyone who shows this feeling also risks doing the same selling for you). Don’t fall for any logic that might counter this, e.g. they have an urgent family need due to medical bills. You don’t want them explaining their life’s problems to each prospect to justify their desperation. I risk sounding cold hearted here but remember that unless you’re the owner of the company, you are working with other people’s capital. You don’t have the right to use other’s resources for philanthropy (that’s just stealing).
5) Why are they looking for a new job? There are a few answers you should avoid like anyone fired because he or she was in a fight. Being fired because they didn’t get along with their manager isn’t a reason to exclude in my opinion. Most people leave due to their manager. Avoid anyone who doesn’t offer a simple, quick response to this question. Dwelling on the negative is a bad sign.
6) What’re their thoughts on cold calling? (The only wrong answer here is “I’d prefer not doing cold calls”) You might choose to ask, “how many calls do you make in a typical cold-calling day.” Anything under 50 calls should be a red flag for you and warrants more questioning. Anyone in sales who doesn’t understand the need for cold calling hasn’t been selling long enough or wasn’t exposed to enough selling behaviors which means you will likely have to teach/coach them. Consider that you calling them was a cold call, what they’re saying is that they aren’t interested in doing what you just did!
7) Tell them they don’t seem like a good fit. Yes, you heard that right. If they argue that you’re wrong, they’re worth entering your next screening process (reread this part). If they fold after one objection, they were never worth your time. If they argue with you, let them know that was the purpose of your statement, and they passed with flying colors.
Closing this call, you want to connect to them on LinkedIn regardless of the call outcome. You will do this in case they become a better fit later and because they can still supply you with contacts from their associations that might be a great fit now or later. Do your best to make every call end on a positive note. They did spend their valuable time with you; they deserve your respect for that.
The Pitch process
Before putting your prospects into the “interrogation,” be sure you have done some selling of your own. The interview isn’t just about you; it’s about the candidate. They have a choice to make too. If you leave their needs out of the discussion, you may find the perfect candidate who will never accept the offer you give them. So, be sure you have sold them on the position. If they only know what the position is from the job posting, your website, or answers to questions they ask you then you’re more likely to fail in your offer. You must sell them on the job and you must do it early in the process.
They must understand their benefits, working for you, for your company, and in your marketplace. They won’t just want to know how much money they can make but how working for you will improve their career in the long-term. Consider they will ask themselves things like, “how will I improve my selling skills by working at this company?”, “will I be coached into a better salesperson here?”, “will this company make my resume better worse or the same as it is now?”, “what am I going to find out about this company after I start that won’t be to my liking?”, “I wonder whom I can talk to that will tell me what’s going on inside their business?” The PITCH for why anyone should work for you at your company must be substantial. If you don’t have any pitch, you need one. If you are working for a company that forces you to lie to have a halfway decent pitch, you need to find a new place to work!
Shoot for 100% conversion on your offers, so make your pitch strong and early in the process.
The Formal Interview and Screening Process
The interview process should include more than just you. Shoot for 3-4 people that would regularly interact with a new rep and avoid anyone you perceive is going to present you or the company in a negative light. You may choose to have everyone do interviews in a serial process, where each of your interviewees takes 30-60 minutes of time to ask questions. You also might consider having them interview with more than one person at a time. Multiple-interviewers is a preferred method with B2B since it’s more closely matches the B2B sales model. The added stress caused by having two people interview your candidate will help expose their typical behavior during the sales process you’re hiring them to execute. Sales is a stressful role, allowing your interview to create stress will help you understand the candidate’s true colors when they are under the gun in the position you are filling.
Many people follow a free-form interview, using the resume as a source to generate questions. I have found it more useful to create a list of questions and ask each candidate the same ones, keeping a matrix of how solid each candidate’s answers are to my questions. Questions to ask in an interview for salespeople need to center on the person’s motivations and values along with their process and prior results. Most people focus just on job process questions. So I have chosen only to make a couple of comments related to process questions in this writing (you can get lists of sales process questions on hundreds of websites already) It is essential that the responses you should ask for are specific past examples, with details. If they answer process questions in vague terms, you should expect they haven’t encountered the types of roadblocks/processes you’re presenting to them (i.e., they aren’t strong candidates since experience is weak). Sales process questions like “describe a recent cold call, it’s flow and specific outcomes?” help to expose sales experience and knowledge. There is one process question always worth asking, “How long did you spend preparing for this interview?” This question tells you how much this person wants the job, or tell you how little value the person puts on researching during a sale (if they spent little time). The ideal answer is, and yes this is an exaggeration, “all the time from the moment I heard of the position up to this very moment.” Preparation should be viewed as a process that never ends.
Knowing process is critical for success, but the motivation that springs from a person’s values and maturity is equally essential and can’t be taught or changed easily (because values change slowly over time). Value-based questions aren’t commonly in use today but I suspect will after people start seeing their power. If you are a coaching manager, you’ll want to ensure the candidate has the right core values to work with, in addition to specific knowledge of sales processes. These questions will help to uncover an individual’s values.
Value / Maturity based questions:
1) “Who are your heroes?” Most people will answer with their mom or dad; a smaller set will offer famous or historical figures, avoid ones who say “that’s a great question, I’ve never thought about it.” Seriously, what kind of person has no heroes? Moreover, those with many heroes are real keepers; they are the kind of people that pay attention to what others are doing that they want to model (i.e., they are looking to improve quickly)
2) “What is your philosophy on the topic of money?” This question I took from Andrew Carnegie’s book called Business. He only wanted to hire people who thought about money enough to have a philosophy about it. The only wrong answer sounds like, “I’ve not given it any thought.” Avoid them because they’ve had others take care of money or lived with a silver spoon that’s still in their mouth. My answer might be “money gives me the freedom to choose, and the more money, the more choices I have.”
3) “What was the last book you read?” The best response is if someone pulls out the book they’re reading (I have had this happen once). The worst is if they give you a blank stare then say something like “I’m not sure that I can remember.” One way to look at this question is using an example where you’re selecting a doctor, in that situation would you choose someone who’s got years of experience and never opened a single journal to keep up to speed with the latest research after 40 years? Sales is a profession that deserves professional attention, don’t you think?
4) “How do you like being managed?” Taken from The Art of the Sale, by Philip Delves Broughton. If changing your style of management has crossed your mind, a great way to manage differently is to recognize what motivates each person best. There’s little chance of getting a wrong answer to this question, but it’s possible I suppose.
5) “What do you want out of life?” I’ve asked different forms of this question for many years in interviews and even customers and prospects. If you take to heart what Dale Carnegie says about the core motivation of people being that we want to feel important, the answer to this question will offer you tools to work with, if you hire someone. I would suggest that you avoid anyone who is hearing this question for the first time (I have had a few who’ve told me this was the first time they’d been asked this or thought about it). How could a person who’s never considered their purpose in life be suited to help others improve theirs? You can also argue that without this insight you could be hiring someone who has no idea of how passion drives their prospective customers.
6) “What does your internal dialog sound like?” This is another question that I recently took from Philip Delves Broughton – thanks, Philip. I am looking for someone that’s got a balanced conversation going on. I’m looking for people that understand the power of an internal voice and that they can control it, to some extent. I’m looking out for overly negative or positive dialog.
7) “What variable compensation plans have motivated you?” I’m want to see if they’ve been motivated by compensation plans similar to what we are currently using and hunting for anything new that I may not be aware of that I can use. Avoid anyone who hasn’t been part of a standard sales compensation plan unless it’s an entry position and you can accept the work training someone on variable compensation plans.
8) “If you wrote your job description, what would it say?” You want an answer that exposes their experience in sales and doesn’t include many things that aren’t part of a selling position. This question will help to reveal many people who think they know how to sell but don’t (e.g., they will add things that aren’t core to a selling position). You will also uncover specific candidate weaknesses by paying attention to what they leave off.
Prior Results Questions
1) “Of the group of other salespeople, how did you do when ranking your results against theirs?” (Target only those achieving in the top 10% – NO EXCEPTIONS – unless you plan to hire average salespeople). When I think of an “A-Player,” I think of anyone who’s in the top 10% of their peer group.
2) “What was the average selling price of your prior positions?” The target should be in a close range with your current price. A lot more or a lot less is a likely indication of a different selling process which will add the risk of failure but indeed require more training.
3) “How many deals would you usually expect to close in a month or quarter?” (same reasoning as #2)
4) “How long was your typical selling cycle?” (same logic as #2)
What candidates should and shouldn’t be asking
Moreover, what questions are red flags and show possible issues. We want candidates that ask great questions. However, don’t take candidates lack of questioning as a weak sign – at least not during the interview – they may have asked one of your associates and done great resource. Add this to your list of things to ask when you reconnect with the other interviewers.
Good Question (from them)
– Describe the sales process
– What percent of the team is hitting quota?
– What’s the next step in your hiring process? (THIS IS A CRITICAL ONE, HIRE PEOPLE WHO LOOK TO UNCOVER PROCESS)
– …anything related to them having researched you or the company…
– …anything pertaining to sales challenges or competition.
Reg Flag Questions (from them)
– What’s the compensation for this position?
– When does your company pay employees?
– Are you guys open to flex time?
– What company does your healthcare?
– Does your company do a 401K match?
Any of the Red Flag questions should have you pointing the candidate to the door. Just imagine this person asking inappropriate questions of those leads you just paid marketing $600 each to set a call going into the circular file!
Almost done, you’ve found a great candidate. However, before you write the offer, you’ll want to talk to prior managers.
You will be calling prior managers only for references (min 2, the ideal is 3), anyone else is a waste of time. You will call for only the most recent managers (go back no more than ten years – more is a waste of time in most cases for salespeople). During your interviews with the candidate, you will ask who their manager was for each of their prior jobs in this time frame. You may also want to ask what these managers will say about them (a good test for self-awareness) DO NOT ASK IF YOU CAN CALL THEIR MANAGERS! DO NOT ASK THEM TO PREPARE ANY PRIOR MANAGERS. DO NOT CALL THEIR CURRENT MANAGER (reason here is obvious). You will tell the candidate at the end of the interviews, assuming they’re a “keeper,” that you will call their prior managers. Don’t do this in advance because it will affect how they answer. You will find the numbers to call them yourself, don’t accept the candidates help on this one. When you call, the only thing you need to know is if they saw the same results as the candidate told you – i.e., if the candidate says they were in the top 10%, will the manager confirm that?
A few companies out there won’t talk to you. They present a unique problem. Without confirmation of the sales performance of your prospect, you cannot hire the candidate. So, if you run into this barrier, start by telling the manager you can’t recruit without just a little input. I will go so far as to say “without your confirmation, I can’t hire this person, so let me tell you what they told me and if you agree then just say something like have a nice day and if you don’t agree just hang up.” I have told some managers that this policy will keep me from holding any resumes from your company, including the manager who might be interested in another job someday. Net-net, don’t let this obstacle get in your way, with aggressive intent you should swat this one down every time! If you don’t, you’ve just given your power away to company lawyers.
Behavior testing allows you to look for hidden traits you typically won’t see till after you hire. For this reason, I say this is a requirement for any sales hiring regardless of experience. It’s too quick (typically online lasting less than 10 min), and inexpensive (the system that I use is $400-600/candidate) depending on how much help you need to understand results, to avoid doing whenever hiring salespeople.
Understanding results after the 1st few are something most can handle themselves, so the lower price is all you’ll likely pay, post the 1st few. The traits that I have learned having the most significant impact are high dominance/aggression (because we want someone who will direct prospects to positive outcomes, 17% of the population has this trait). The next most important characteristic is empathy (versus logic because Spock would make a terrible salesperson, but Commander Troy would make a good salesperson). Finally, a low propensity to conformity (low value is better because a rep must be open to conforming to the customer as much as to their employer), and have a high energy level are both significant. I use a service delivered by Bob Kreisberg’s at opusproductivity.com, but many provide this testing (DISC being the most popular form used today).
The time to do these is just after the interview process, so this becomes a final check to ensure your selection matches what behaviors the position will need. I socialize this test with the candidate during the first few days on the job, to prepare them for coaching processes. I also offer the full results to any candidate when I introduce this step to them to help avoid concerns or rejection of this requirement. However, I never provide them with the full reasoning behind my decisions given the litigious world we live.
Sample behavior profile and analysis
If you’ve never searched the Counteroffer topic online, do it now. You will find many resources on this topic. What you’ll have a hard time finding is anything that’s positive about counteroffers from employers. So, before I hand anyone an offer, I have this “Counteroffer Discussion.” It helps to immunize the candidate against any irrational behavior by their current employer or the candidate. The conversation goes like this – “we want you on board and think you will find this place great for adding to your career objectives. However, one area we can’t be there for you is when a counter offer is made by your current employer. So, we’d like you to do a quick search on the topic to see what the internet has to say.” Usually, that’s enough to get the point across without causing them to feel you’re playing any dishonest games.
The Counteroffer Process
This immunization is good for you and the candidate. The implications of taking a counteroffer are very detrimental to the candidate. The negative impact to you is straightforward; you will have wasted all your time with this candidate when they take a counteroffer. Not spoon feeding them yourself on this topic will ensure the candidate doesn’t perceive any bias on the subject from you.
The Offer Letter
Not much to cover on this, even if you’re new to hiring, it’s an easy task to repurpose a previous offer letter to ensure the content and structure is correct. Be sure to call the candidate before you send the offer letter and review its elements, closing by asking if it sounds good. You can also spare yourself time editing the letter if you know it’s acceptable before you send it.
Imagine yourself getting an offer letter that’s not what you expected. You might think, “are they for real, don’t they know….” (blah, blah, blah). You have just opened the floodgates of ill feelings, and you’re not there to answer for yourself. Bad feels aren’t static; they grow every moment they’re unanswered. Just like objections in a sale, they require immediate attention or risk the entire deal! Avoiding them from the start is vital.
The added benefit of making the pre-offer call is that you’ll know with near certainty if your offer is going to be accepted and when you can expect their signed acceptance. You will look like a magician to your organization as you put out offers that always get accepted.
I strongly suggest that everyone does a simple check for outstanding warrants. This one check will prevent your organization from being violated by the men in blue in the middle of a workday to pick up your latest hire and walk them out in handcuffs. It’s inexpensive for organizations of any size and shows you respect your other employees enough to help prevent a killer from being in their midst (exaggerated for effect). It also spares you the blow to your organizational power base, unless you think everyone’s opinion of you would be unaffected by this action playing itself out.
Adjacent but equally important is a credit check. It was said by Andrew Carnegie, the measure of a man is how he deals with money. In my experience, a person with very poor credit will be distracted in their job and should be avoided. The measure of how bad their credit can be before eliminating them each person will have to decide. Certainly, the size of prospective salespeople to choose from plays an important role in this decision too.
80% of success is picking great candidates. The other piece is how salespeople are prepared to do their jobs. This writing wasn’t intended to cover the topic, but a few things worth mentioning. Selling new solutions to new customers doesn’t mean salespeople are all good at figuring out your sales flow. Whom you sell to, why people buy your solutions, how prospects approach the buying process, and how you find these prospects are only a few things you don’t want new salespeople figuring out on their own.
Elements to a proper onboarding process are:
· Training on the product or service
· Training on the market and buyers
· Mentor assignments
· Sales process training, e.g. presentations
· Roleplaying, i.e. practicing the sales process
· Competency testing on all of the above
The steps needed to ensure selecting good salespeople aren’t a secret. Following this process or similar ensures your organization is setting itself up for long-term success. Using this process, Confio experienced lower than 3% annual turnover in sales with everyone delivering against an aggressive initial sales goal’s forecast.
The process is straightforward, starting with finding candidates and/or using recruiters. Then screen out the duds and do a quick call to ensure fit before committing to the full interview process and locking them in with a pitch on you/your company/the position. Move into the formal interviews and be sure to test for value fit. Get input from all your interviewers, test for behavior, check references, criminal and credit checks then create an offer for the candidate(s) that qualify.
Onboard your candidates well and you have upped the game your company follows scaling the size of its producing sales team.
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