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The Ugly Truth of the Cost of a Bad Sales Hire

When you ask a CEO or sales manager about the cost of a bad sales hire the first thing they are likely to bring up is the actual cost of hiring. I.E. on-boarding, training and benefits, and while this may be very expensive most companies seem to leave it at that. The fact of the matter is that the true cost of a bad sales hire will go far beyond the initial costs (which are typically equal to one year’s salary for said employee). To really understand this, you must look at it a little differently.

Let’s say for the sake of this example that you hire three sales reps at the same time. Person A, B and C, Rep A is a rock star in terms of sales. They blow every goal you set out of the water and routinely exceed expectations. In their first 18 months with the company they generate 1.5 million in revenue. Rep B is an average performer, they meet most goals but do not typically exceed the goals or expectations that are set for them. They generate 755k in revenue their first 18 months. Finally, we come to Rep C, they are a “bad hire” an under performer who never seems to meet goals and falls far below the benchmarks set by Rep A and B. Rep C only generates 388k in their first 18 months.

Rep C may be under performing for any number of reasons but let’s assume that everything in the market is equal and that they are failing because they are not cut out to be a building product sales representative. They lack motivation and the communication skills to be a success in the field. This is unfortunately a common occurrence, the problem is that many people can talk the talk in the interviewing process, but then when the rubber meets the road walking the walk seems to be a major issue for them.

Look at the numbers, they speak for themselves. Your most recent “bad hire” has cost the company not only the initial hiring expenses, they have also cost the company 367k over that of Rep B and a staggering 1.1 million in lost sales compared to Rep A. When you look at it this way it becomes quite clear that the real cost of a bad hire is far beyond that of the initial costs. These figures don’t even begin to consider the potential of lost accounts or missed opportunities either. A bad hire will likely be nowhere near the level of customer acquisition and retention costing you any number of existing accounts and potential new customers.

So why should you chance it? You can see very plainly now that the cost of a bad hire for your next building product sales representative goes far beyond the initial costs but reach into almost every aspect of sales and revenue potential. The answer is that you shouldn’t. You should leave the process of finding your next rock star sales rep up to professionals who have years of experience weeding out the good from the bad. Schedule a no-obligation discovery session with Building Gurus at today, don’t let your company struggle with a sub par sales rep, let the professionals find you the best.

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