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Best hiring practices for predicting sales performance

The future for sales professionals looks promising. At least if we believe the projected demand for sales jobs in 2022. This optimism should, however, not cause sales leaders to overlook the importance of recruiting the right sales person. They should be aware that besides engaging and motivating, it is important to avoid making bad hiring decisions. Therefore, they should consider to adopt predictive and evidence-based hiring methods proposed by academic researchers.

BRIGHT future for sales professionals: high demand on the horizon

stapelupp_iconDespite the issues of sales talent shortages and low engagement levels among sales representatives, the future of the sales profession looks promising. According to a ranking by Business Insider, sales representatives are among “The Best 20 Jobs of the Future”. When they looked at the median salary and future job openings, sales representatives were ranked as the 18th best occupation of the future. If the forecast is accurate, this means sales representatives can expect a bright future.

BAD hires are costly

This optimism, however, should not cause sales leaders to overlook the importance of selecting the right sales person for the right role. Unfortunately, traditional practices such as: hiring top reps from competitors, evaluating resumes and conducting face-to-face interview are poor predictors of candidates’ future sales performance. Did you know that Yahoo! recently made a bad hiring decision with an estimated cost of around 100 million dollars? A recent blog post “The Cost of a Bad Hire” discussed Yahoo!’s Marissa Mayer recent failure when the company recruited a new COO – from Google – who had to be let go only after 15 months on the job. This example clearly illustrates that any company can fall in the costly trap of making bad hiring decisions.

Besides the obvious monetary losses, poor hiring decisions have other implications. In fact, a recent survey suggested it can negatively impact productivity, employee morale, customer relationships and revenues. The challenge of predicting candidates’ success for different positions has captured the attention from academic researchers. Based on scientific evidence, academic researchers have developed objective and predictive methods to improve hiring decisions.

Scientific measures TO make better decisions

siffrorWith the help of 1994 experiments, researchers J.Scott Armstrong and Philippe Jacquart discovered that higher pay does not lead to the selection of better executives. In “Are Top Executives Paid Enough? An Evidence-Based Review” they concluded that higher pay might actually have a negative impact on performance. According to Armstrong and Jacquart, higher pay “fails to promote higher performance. Instead, it undermines the intrinsic motivation of executives”.

As a result, researchers recommended recruiting firms to go beyond offering high salaries as a way to selecting top talent. Instead, they advised practitioners to adopt objective and predictive methods. One method is “the sealed bid”.

THE SEALED BID METHOD

With this approach, the hiring committee receives anonymous applications which they objectively review. All information in the application is solely related to candidates’ ability to perform the job. For example, a candidate may include a description of what they can do for the company, their skills, salary expectations and the length they expect to work for the company. After an initial screening, a test and an assessment session, candidates are given a score. At the end, the candidate with the highest score – based on an index – gets the offer. The bottom line is that the decision is made purely on the candidates’ ability to perform the job.

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While the research dealt with hiring decisions for executive positions, evidence from ProSales research suggest that the findings are equally applicable for B2B sales professionals. Driven by the curiosity to understand what leads to higher sales performance, ProSales discovered that extrinsic motivators such as bonuses and high salaries do not guarantee high sales performance. What actually drives sales performance is sales managers’ ability to accurately allocate the right sales person to the right sales role. Salespeople driven by financial rewards were shown to perform better when involved in routine tasks that involve selling simple products and services. On the other hand, in complex sales situations that involve customer understanding and consultative selling, salespeople driven by financial rewards tend to underperform.

Overall, there is plenty of scientific evidence to suggest that objective and evidence-based assessments should be applied when recruiting sales professionals. While I am not saying that traditional methods should be abandoned, I strongly believe in the benefits of the above-mentioned practice. The benefits of complementing common sense and gut feeling with factual evidence overweight the costs of bad hiring decisions. At the end, sales leaders will be in a better position to make accurate decisions by using both subjectives and objectives methods.

3 measures to HIRE the right salespeople 

Drawing inspiration from several articles such as “Avoiding the wrong hire: keys to recruiting successful employees” and “Hire for Attitude” we present the following 3 measures to avoid making bad hiring decisions.

1. Consider complementing face-to-face interviews with objective measures

Why not consider complementing interviews with predictive and evidence-based methods? Resumes and interviews only tell you half of the story. By combining gut feeling with quantifiable measurements, sales leaders can increase the chances of selecting the right sales person.

2. Practice collaborative interviewing

Instead of interviewing candidates on your own, consider conducting group interviews or use a hiring committee. A collaborative hiring effort provides a wider perspective as each participant provides unique insights depending on their roles. Moreover, collaborative hiring minimizes the risk of individual biases or preferences. In general, group interviews lead to better-informed decisions.

3. Hire for attitude

Consider hiring salespeople with the right attitude and soft skills. Ask yourself if the candidate is a good fit the company, if they are intelligent or if they have a strong work ethic. The technical skills can be acquired via on-the-job training.

What is your approach to hiring?

Are you recruiting the best sales talent? No single organization is immune to making bad hiring decisions, therefore, organizations should adopt measures to predict future performance. Assessment tools that use objective data to predict sales performance should be used as a complement to subjective methods. What is your approach to hiring salespeople? Share your thoughts and opinions with us either via LinkedIn or during our seminars (available in Swedish for members)

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