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The 1 Thing Your Company Can Do to Beat the Average Sales Turnover Rate

Sales has one of the highest turnover rates of any industry. On average, American sales organizations have a 27% turnover rate – that’s twice the average turnover rate of other fields. With more than 20 million workers in the U.S. employed in the sales industry, it means your top talent will always have the option of moving on to millions of greener (and more lucrative) pastures.

The Mixed Impact of Variable Pay Packages on Sales Rep Retention

The most common tactic that sales organizations employ in an effort to retain reps is offering variable pay packages. Ask any sales rep what motivates them and you will most likely hear one common answer: money. So, it makes sense that in recent surveys, 95% of all companies in the United States reported offering salespeople variable pay packages with sales incentives. 

It’s such an easy answer to stopping the hemorrhaging of top talent – just revise their pay packages to offer more sales incentives in the form of money, trips, iPads – you name it companies will put it up on the board as an incentive. 

But the problem is – your competitor is doing the exact same thing.

Nearly 80% of companies revise their sales incentives and variable pay packages every 2 years. The ubiquitous nature of the practice leads to a race to the financial bottom for your company (or top in the minds of your sales team) and incentivizes top reps to job-hop. 

It’s important to maintain competitive variable pay packages, but – as a recent study by Harvard Business School found – while it will increase your team’s sales productivity, offering additional sales incentives or increasing quote-based sales incentives does not increase retention rates.

How to Really Decrease Sales Rep Turnover

We see a common sales management mistake made by companies ranging from start-ups to Fortune 500s: retention efforts are developed with top performing sales reps in mind. Retention efforts should instead be concentrated on the top performers of tomorrow – your junior sales people. 

Studies show that the reps who are lowest on the totem pole are the most underserved and potentially productive member of the sales organization – and the category of sales rep whose retention rates are most influenced by investments in training and coaching. And who says practice doesn’t make perfect? Would Seth Curry go out to the Big Game without practicing? Of course not! So why would you send your sales team out without honing their selling skills through simulated, 3D Avatar role-plays or maybe even testing their knowledge with a simple gamification approach

Beating Average Sales Turnover Rates Starts Pre-Hire

Before you hire a sales rep, use an online sales assessment test to assess a potential hire’s selling behaviors, sales skills and overall fit for your sales organization. One that will also help you predict performance and project sales quota for both new hires and your existing team. Knowledge is power, and the ability to predict quota performance is an invaluable tool for sales leaders.

Next, pull the trigger on a new hire who is predicted to make the cut. Then invest in a top sales training platform that moves onboarding from a dreaded periodic classroom experience into a nimble, on-going, video game-like experience.

Moving from hire and fire to an assess and develop approach can help your sales organization attack that 27% turnover rate – and blow it away.

Author: Nick Rini

Nick Rini, with an extensive tenure in tech as an entrepreneur, has led three companies as CEO, and served as an advisor to several tech company CEOs. Nick’s experience includes raising venture funding, mergers and acquisitions, sales forensics consulting, sales, marketing, and sales management.


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