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Influencers Invited Sales Blog

Predictive Analytics and the End of Bad Sales Hires

Sales organizations are experiencing stagnant growth, sooner rather than later, because they consistently make the wrong hiring choices at every level of the organization, especially at the top. The people, processes, and tools companies use to evaluate sales candidates are deeply flawed and susceptible to unconscious bias at every data or touch point. Too often, gut feeling, rapport, and pleasant encounters, which have no correlation to job performance or future success, are key reasons sales candidates are hired. Further, the evolved sophistication of sales candidates have compromised the reliability of Applicant Tracking Systems (ATS) and pre-employment assessments. As a result, a sales organization, where 70 percent of the sales representatives are mediocre or poor performers, is commonplace. Meanwhile, the average tenure of a VP of Sales has shortened to 17 months.

The cost of mis-hires, particularly in a sales organization, can be devastating as well. According to one study by Smart & Associates, the cost of a mis-hire can be 6 times the base salary of a sales representative, 15 times the base salary of a sales manager, and up to 27 times the base salary of a VP of Sales. This takes into account hiring costs, compensation, maintenance costs, opportunity costs, severance, and disruption costs. Such costs threaten an organization’s very existence, let alone its ability to compete.

The use of Artificial Intelligence (AI) and machine learning, more specifically Natural Language Processing, have proven successful in mitigating risks associated with mis-hires. The science linking the use of one’s language to future behavior and performance has proven significantly more reliable than other methods of evaluating candidates. As people subconsciously reveal aspects of their personality, preference, and future behavior, through the language they use, solutions incorporating this science provide Talent Acquisition Executives, and the constituents they serve, a way to more reliably predict which sales candidates will be top performers and the best culture fit.

Making the right hire, and replacing mediocre and poor performers, with top performers, not only reduces turnover costs, but delivers desired outcomes that come with significant and sustained revenue and profit growth.

In two weeks time, Sales VP’s and their Directors will engage in the quarterly ritual of mining their sales pipelines for those one or two sales opportunities that will save their quarter and, like the previous quarters, they will don their delusion-rimmed glasses and attempt to, either, resurrect mummified sales opportunities or prematurely force newer opportunities to the bottom of the funnel. We know how this story ends, save for a few miracles.

The discussion in the Managers’ Meetings to follow will include oft-used explanations that are re-purposed and spun for the consumption of Chief Executives, whose level of frustration will increase and intensify with each passing quarter. To relieve the mounting pressure, Sales VP’s and their Directors will caucus to determine whom, among their low performers, will be sacrificed. Finally, after this process repeats itself enough times, and after hundreds of thousands of dollars in misspent compensation is invested, the Sales VP is mercifully shown the door.

There is a better way!

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