Salesperson retention has historically been a pain point for many companies. But the issue has been exacerbated recently due to the impact of COVID and widespread talent shortages.
With retention rates hitting a record low in 2020 and 87% of HR experts considering retention to be one of today’s top priorities, it’s definitely an area most companies will want to address head on. The question is, exactly how should you go about it?
While there are a wide array of tactics that can be used, here’s one particular strategy that can increase salesperson retention by a staggering 41%.
According to research, pound for pound the number one thing you can do is take strong initiatives to hire internally. A study from LinkedIn found that creating a culture of internal mobility is often the best way to keep your top talent around for the long haul.
“Our data shows that employees stay 41% longer at companies that hire internally compared to those that don’t,” explains Mark Lobosco, vice president of talent solutions at LinkedIn. “As companies continue to experience the benefits of internal mobility, we’ll begin to see it shift from an ad hoc solution to an essential corporate strategy.”
To add a bit of context, this quote was taken from an article about 2021 recruiting trends where experts gave predictions on the direction they believed businesses will take post-pandemic. And I think he really hit the nail on the head. The numbers speak for themselves, with salespeople staying, on average, 41% longer when given a chance to move up the company ladder. But what I found really interesting is that we’re seeing a new mindset where businesses no longer do this on an ad hoc basis out of necessity, but strategically make this part of their overall recruitment strategy.
And it totally makes sense. Given the current recruiting landscape where high level reps are at a premium, we can see why a growing number of companies want to recruit from within and build a framework that positions salespeople to grow. “This will lead to HR and L&D partnering closer than ever before to better understand existing skill sets, address skill gaps in their organization and build more robust internal mobility programs,” Lobosco adds.
Unpacking This Trend Further
Generally speaking, there’s a correlation between length of time at a job and lower retention. This graph shows that one year after being hired, a salesperson has a 76% chance of still working for the company. But that likelihood steadily drops, until after three years, they have just under a 50% chance of remaining, and after five years, it’s only 38%.
That’s bad news if you’re trying to build a tight, cohesive team of sales rock stars because, based on these figures, barely over a third will still be with you after five years. If, however, you focus on internal mobility, your chance of having a solid team increases considerably. For example, LinkedIn states that “employees who were promoted within three years of being hired have a 70% chance of staying on board,” while “those who were not promoted and who did not change jobs internally only have a 45% chance of remaining.”
By examining this data, there’s no denying that internal promotion boosts retention — and it does so by a significant margin. So if your company has been plagued by chronic turnover or has suffered from the backlash of talent shortages, I suggest making this a key strategy moving forward. While it’s not always realistic to promote every single rep — especially the mediocre performers — it’s certainly worth the effort to give top talent advancement opportunities.
One Last Important Point
You probably have a general idea of why internal promotion increases salesperson retention. Reps are naturally more likely to stick around for longer when they know there’s the opportunity for career advancement. That’s pretty obvious.
But is there anything else to it? It turns out there is.
Roy Mauer, online manager/editor of SHRM mentions that employee empowerment also factors into the equation. “Employees also stay longer at organizations perceived to be places where workers have influence,” he writes. “After three years at one of those employers, there’s a 47% chance of retention, while employees at companies viewed as less empowering only have a 35% chance of still being there after three years.”
The takeaway here is that salespeople like to feel they genuinely have a level of control over their own destiny. Otherwise, it’s easy for them to become disengaged, where they, in turn, are more likely to explore other career opportunities.
In terms of specific ways to empower employees, here are a few ideas:
Create a continual communication loop where you provide them with feedback and encourage them to share their feedback with you
Sales recruiters have their work cut for them. The combination of COVID, talent shortages, and record low retention have created some real difficulties. But it’s by no means an issue that can’t be overcome with the right strategy.
Establishing a culture of internal mobility where you hire from within whenever possible can have a dramatic impact on salesperson retention and increase it by as much as 41%. This along with empowering reps should ensure you maintain a strong, highly skilled team that’s poised to thrive no matter what happens.
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