The 3 Biggest Reasons Why Top Performing Salespeople Leave (And How to Lower Turnover)

Published on Sep 28, 2020

Turnover. It’s one of the biggest causes of stress and frustration for employers. And if left unchecked, it can waste time, erode profits and bring company growth to a grinding halt. 

What’s concerning is the sheer number of people leaving their jobs these days. “The percentage of US employees quitting their jobs is at an all-time high,” says Gallup. Further, “67% of US employees are disengaged at work, and 51% say they’re actively looking for a new job or are open to one.”

In this post, we’ll get to the heart of why top performing salespeople leave and go over some specific steps you can take to address this problem. 

The 3 Biggest Reasons for Turnover

SiriusDecisions, a global B2B research and advisory firm performed extensive research to identify the main reasons why top performing salespeople left the companies they worked for. 

Here’s what they found:

  1. Insufficient compensation – This was the reason why 89% of salespeople left
  2. A lack of connection with leadership / Incompetence of leadership – 60 – 80% 
  3. Concerns about their company’s ability to meet market needs – 75%

Note that a certain amount of turnover is normal and shouldn’t cause any major disruptions to your business. Currently, the average turnover rate for sales organizations is hovering just under 35%. But if the number gets much higher than that, like it does for one in 10 companies with a turnover rate above 55%, it’s definitely a cause for concern and something that should be addressed right away. 

Now let’s take a closer look at these three main reasons for turnover and discuss some potential solutions. 

#1 – Insufficient Compensation

Above all else, not being paid what a rep thinks they’re worth is the number one reason why they head for greener pastures. And this is nothing new. 

Just like with nearly every other industry, those in sales are quick to jump ship if they can earn more somewhere else. This is especially true for SaaS salespeople where there’s been an explosion in the number of companies that were launched in recent years. 

So, what exactly is considered adequate pay? According to recent data from PayScale, the average salary for a salesperson in 2020 was $45,676

If you’re paying well below that, especially in a larger market, high turnover is an inevitable issue that’s going to plague your company. The solution though is quite obvious — pay your reps more so that it’s competitive with other sales organizations in your area. 

And if possible, consider offering your top performers rewards like bonuses, health benefits, and recognition awards, which collectively help boost your employee value proposition (EVP). A study by Gartner found that effectively delivering on your EVP can lower annual turnover by 69%

#2 – Leadership Issues

The second biggest culprit for high turnover is when there’s either A) a disconnect between sales reps and company leaders or B) a perceived incompetence among leaders. Liz Ryan of Forbes chimes in on this saying, “Turnover is a leadership problem. When you as a manager are told over and over again that your employees will get raises and over and over again, the raises don’t come through, you become part of the problem.”

Admittedly, this isn’t usually something that’s a quick fix and often requires a fundamental cultural shift. That said, there are some specific techniques higher ups in your company can take to become better leaders. Lolly Daskal, President and CEO of Lead From Within, offers some great insights, including:

  • Accepting criticism
  • Being open to feedback from salespeople
  • Being authentic, honest, humble, and transparent
  • Taking a “practice what you preach” approach to leadership
  • Constantly striving to improve communication skills
  • Being quick to praise reps for a job well done

#3 – Concerns About a Company Meeting Market Needs

“‘Marketplace needs’ is a marketing concept that relates to the functional or emotional needs or desires of a target market,” explains college marketing professor Neil Kokemuller. “Generally, a successful company identifies when a segment of customers is not effectively served by existing providers and develops and promotes products or services to match.”

But when a company fails to do this effectively, it can create concerns for salespeople, where they have anxieties about its long-term growth and success. And this is understandable given that nearly 400,000 startups close their doors each year. 

Couple that with the negative impact COVID-19 has had on the economy, and concerns from salespeople are definitely justified. 

By these numbers, it’s clear that companies need to have a pulse on market needs — both functional and emotional — and be constantly evolving to stay relevant. It’s also important to develop a strong unique value proposition (UVP) and offer products that give your brand a clear edge over the competition. Not only is this important for carving out a sustainable niche, it lets your salespeople know that they have job security, which reduces the likelihood of excessive turnover. 

Keeping Turnover In Check

Turnover has become a serious problem for many of today’s organizations. BambooHR found that nearly a third of people have quit a job within the first six months, and 68% of those people left within the first three months. 

While there’s no magic bullet for turnover, understanding the root causes we’ve discussed here should help you gain a better understanding of what compels top salespeople to quit. Then, implementing solutions like offering competitive pay, developing better company wide leadership, and better meeting market needs should help you get it under control.

And with the right effort and focus, you can keep your most elite salespeople around for the long haul. 

Another big part of increasing retention is improving your recruiting process. Find out how you can use HireDNA to attract and recruit better candidates using science-based sales assessments. 

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