Recruiting & selecting the right salespeople-By Saad Elhalafawy

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Saad Elhalafawy 13 th Aug 2016 From: CSE text book SMEI-USA Recruiting & Selecting The Right Salespeople

Transcript of Recruiting & selecting the right salespeople-By Saad Elhalafawy

Page 1: Recruiting & selecting the right salespeople-By Saad Elhalafawy

Saad Elhalafawy13th Aug 2016From: CSE text bookSMEI-USA

Recruiting & Selecting The Right Salespeople

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Agenda

• Introduction • Steps of successful hiring process• Planning to hire• Finding & recruiting applicants• Selection procedures (App form, Testing, Personal interview, Background

verification, Physical exam)• Making job offer• Transitioning the hire• Diverse sales force• Common hiring mistakes• Global sales management• Evaluating the hire process

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Introduction

• Successfully recruiting salespeople is one of the most important functions performed by sales managers

• When a firm conducts its selection & recruiting practices haphazardly, the company will experience:• Higher turnover rates• Higher recruiting & training costs• Dissatisfied & lost customers• Lower revenues

• One Sales-industry expert calculated that the sum of the various costs of hiring the wrong salesperson can exceed $300,000!!

• Companies are discovering that every competitive advantage they have –except high performing employees- can be duplicated by their competitors

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Successful hiring requires to follow a process

1. Determining the number of salespeople needed

2. Identifying the unique skills, knowledge & attitudes a salesperson needs to do the job successfully

3. Attracting a sufficient number of good applicants to form a pool of potential hires

4. Conducting an interview process that accurately assesses the applicants’ qualifications for the position

5. Offering a sales position to one or more applicants

HR or Sales manager, Knee-jerk, methodical hiring process

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PLANNING TO HIRE

• Mistakenly firms & SMs too often view the selection of SP as a process that’s initiated once there is a sales opening.

• Ideally firms should have a selection process in place before vacant openings, one that consider factors such as:• Firms strategy• Predicted sales force turnover rate• Growth or shrinkage of sales territories• Promotion & retirement of SP

• The longer the territory goes without a good SP working it, the more the revenue the company can lose to a competitor

• Good SP are hard to find & turnover rates are generally high in the profession because many potential candidates have negative perception about working in sales

• In life insurance business 300% a year. US employees 22%5

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A. Calculating a (TO) turnover rate

• Turnover rate: is the annual percentage of SP that leave the firm for both controllable & uncontrollable reasons

• Controllable reasons: Retirement, promotion, transfer, termination, change• Uncontrollable: Moving, marriage, death, quitting, changing career, study• Annual turnover rate = Number of SP that left the firm during the year/av sales force size during the year

• A far more difficult task for the SM is determining exactly why SP are leaving the firm. To understand that he has to ask himself some questions:

1. Who is leaving the firm? Men, women, minorities, young, old?2. How long has the av SP worked for the firm? Are new SP seeking opp

elsewhere after a short period of employment with the firm? Or are older….3. What is the level of performance within the sales team? Stars are leaving?4. What specific reasons did the SP give for resigning? Salaries, working

conditions, better positions, increased responsibility….

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TO rate

• Answering the questions may reveal unpleasant truths about the firm, but it is very important to enable the SM & HR to address the root causes of the turnover

• Computing the TO rate is the starting point for understanding how many SP left or terminated during a certain period of time.

• If more among newly hired reps, then more training & use mentors to increase their self-confidence during the first year on the job

• If more seniors, then alternate career plans can be developed to encourage them stay.

• If they are moving to positions in career fields outside of sales, so wrong selection, and perhaps the firm’s current recruiting & selection isn’t showing a realistic view of what a sales job really entails.

• A zero% TO rate should also concern the SM• SM should also compare the firm’s TO rate with the industry standards, if

higher then may be firm’s environment or market forces

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B- Conducting a Job Analysis

• Job analysis: is an “objective profile” examination of the duties, activities, responsibilities & behaviors of currently employed SP

• Generally one recent study found that SP should have:1. Good listening skills2. Time management skills3. Ability to follow up with customers4. Adaptability to change & stress5. Tenacity (ability to stay on the task & keep pushing)6. Organizational skills (administrative work & handling scores of small accounts)7. Successful experience in the same industry

• If the SM is busy or lack the technical expertise, then HR should be contacted for assistance

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• A comprehensive SP analysis should provide the hiring manager with an understanding of:1. What a SP currently does on the job2. How the SP should ideally spend his or her time

• To answer these questions the person performing the job analysis should:1. Interview current salespeople & their supervisors2. Conducting field observations3. Looking at sales reports 4. Keeping filed diaries (reports)5. Getting feedback from customers6. Observing how the more successful SP prioritize their time & activities

• All is to avoid the misunderstanding about what is expected of a person on the job. When the expectations SP have about their jobs don’t match the realities they face, their TO will increase

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C- Writing a job description

• A job description for a SP should address the following:1. The nature of the product & services the SP should sell2. Customer types & the frequency upon which they should covered3. The SP’s specific tasks & responsibilities4. The relationships between the SP & other people in the organization5. The intellectual & physical demands of the job6. Environmental factors affecting the sales position (travel..)7. The compensation method used (base salary + commission or commission only)

• Once the job description has been created & approved , the document can be utilized to develop a statement of job qualification: the necessary skills, knowledge, experience & attitude required of applicants

• Short term training will seldom correct the SP core deficiencies • So, some firms only hire experienced applicants with proven track records

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FINDING & RECRUITING APPLICANTS

• Recruiting: is the process firms use to find & hire the best qualified candidates for an open position. The recruitment step is based upon accurate information gathered in the planning stage from 1- Computing TO rate, 2- conducting a Job Analysis, 3- writing a concise Job Description & Job Qualification.

• Number of applicants needed = number of open positions/ % of applicants selected x % of acceptances

• When too few or low quality applicants are generated, it is likely there is a problem with the sources utilized to find them. So most firms are looking at different origins, including internal & external sources

• Internal applicants; are potential candidates for open position that currently work for the company in another position or department

• Internal applicants are well known to SM, have more technical & knowledge more successful according to one study looked the pros & cons

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External applicants

• Internal sources seldom produce either the quality or the quantity needed• External applicants; are candidates for open positions that are generated

from a variety of sources

1. REFERRALS; “It’s not what you know but who you know”• Networking; is the practice of forming relationships & consulting with other SP,

executives, educational institutions & friends to learn about positions that may or may not be publicly advertised.

• Ethics part; When should a SM raid his competitors Sales Force?• What is important is who contact who!• Business networking through LinkedIn & Ryze• Bonus for referring applicants & their remain for a specific period of time• Customers are also a source of referrals

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2. ADVERTISEMENT: in newspapers, magazines or online to generate a sufficient number of qualified applicants for an open position

• Most contain a format of information that include:• Title of the job opening• Minimum job qualifications• Preferred job qualifications• Location of the sales territory• Expected travel time• Discussion of pay & benefits• Statement of core company value• Who & how to contact the hiring firm

• BLIND ADVERTISEMENTS: offer only a limited amount of information about the vacant position, tends to generate a big applicant pool with wide range of experience & qualifications.

Often these jobs pay commission only without basic salary, so those SMs prefer blind ads so as not to disclose any potentially negative info because they would prefer to talk to candidates personally to sell them the more +ve aspects of the job

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• Generating too large an applicants pool can result in costly screening activities• The more precisely the ad describes the minimum acceptable requirements, the

higher the probability of attracting qualified applicants

3- PRIVATE RECRUITERS: “Career counselors” or “Headhunters”• For more complex sales positions like technical & international sales• Some headhunters may specialize by industry of company type• Mostly firms turn to them for higher positions like SMs & SEs more than for

finding entry level or territory SP• Being criticized for being expensive & not generating long term employees• They receive a significant % of the 1st year salary as a compensation for the

screening & selection process• To improve the likelyhood of success, SMs must provide private recruiters with

“specific applicant skill info” that is derived from the job analysis & job description• Firms tend to reuse the same private recruiter when high performing job

candidates are hired & retained

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4- EDUCATIONAL INSTITUTIONS: from Colleges & Universities• Excellent for firms seeking entry-level SPs• College graduates demonstrated an ability to complete projects, solve

problems & remaining focused on achieving long term goals• Many colleges & universities nowadays maintain a career management

centers that actively cooperate with potential employers• College graduates normally require basic sales training & mentoring• However some colleges offer undergraduate majors in professional sales that

include courses in sales management, professional selling, B2B marketing plus performing a sales internship

• Hilti, is hiring new SPs from Univ. Sales Center Alliance (USCA) school• Recent study reported that professional sales graduates were in high demand

& earned significantly higher salaries than marketing majors

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5- JOB FAIRS/CAREER CONFs. & TRADE SHOWS• Job fairs are career confs. Jointly conducted by trade groups, student

organizations, universities, cities or business consortiums• Through participating in the fair, having sales or HR rep at the booth to meet &

talk with applicants• Job Fairs provide a good opp for firms to conduct initial screening interviews with

a large number of potential candidates & to identify a pool for further formal interviews

• Recruiting in this way can be accomplished at very little cost to the company

6- E-RECRUITING: • Is becoming increasingly common• Can quickly & economically generate a large pool of candidates• Applicants can go to firms websites or Job data banks available in other sites• Firms use key words to evaluate & sort qualified from unqualified applicants• The quality of the applicant pool is significantly more important than the size of

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SELECTION PROCEDURES

• After identified the pool of potential applicants, it is important to follow a “Formal interview Process”

• 5 stages of the selection process includes”1. Having the candidate complete an application form2. Testing the candidate3. Personally interviewing the candidate4. Verifying the candidates background info5. Conducting a physical exam (if necessary)

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APPLICATION FORMS• Application form is an electronic or a paper form that asks the job candidate to

provide a standard list of info about his education, background, work experiences…etc

• Reasons behind the importance of the app form although CVs are available:1. Completed app forms provide SMs with consistent & standard info about

candidates that may not be mentioned in their CVs2. App forms have to be signed by the candidate, thus granting the firms legal

permission to verify they provide3. Completing an app form requires the candidate to read, follow directions, respond

to questions & express themselves, which provide an initial impression about the applicant

4. SMs can use the info gleaned from app forms to develop & formulate questions during the personal interview

5. App forms provide SMs with the opp to find the inconsistencies in dates or other questionable entries that can be probed during the personal interview

• App forms should not ask questions about marital status, gender, religion, race, age or handicap, otherwise firms will be accused of illegal discrimination

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Legislative acts prohibiting employment discrimination

• Civil Rights Act (1964); prohibits disc against any individual because of race, color, religion, sex or national origin, with respect to privileges of employment

• Age Disc in Employment Act (1967); Prohibits disc against old individuals 40-70

• Equal Employment Opp Act (1972); amends the CRA to prevent any person from engaging in any unlawful employment practice

• Rehabilitation Act (1973); require firms that employ 50 or more workers & that bid on federal contracts in excess of $50,000 to hire & promote handicapped workers

• Vietnam Era Veterans Readjustment Act (1974); require employers with federal contracts or subcontracts of $25,000 to provide equal opp for Vietnam-era veterans, specially disabled veterans & veterans who served on active duty during a war, campaign or expedition

• Uniform guidelines on Employee Selection Procedures (1978)• Americans with Disabilities Act (1990)

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TESTING THE CANDIDATE

• Testing offers managers another perspective of the applicant, by confirming what they have learned about the candidate during the interview process

• A PSYCHOLOGICAL TEST; is a method of sampling small, representative sets of behavioral responses gathered under uniform conditions. The samples are then scored based upon predetermined rules or formula

• Psychological tests including: Personality, Intelligence, Ability, Aptitude & EQ tests • PERSONALITY TESTS; are designed to measure personality traits that motivate

SAs. Since it is difficult to identify specific traits for a sales positions, personality tests are the most difficult to validate.

• E.g. Mutiple Personal Inventory & Gordon Personal Profile• INTELLIGENCE TESTS are used to estimate the quality of info acquired & used by

the applicant• It measures applicants’ memory, reasoning & verbal ability• E.g. Wonderlic Personnel Test & Otis self-Administering test of mental ability • A few firms also ask applicants to list their SAT reasoning test scores

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• ABILITY TESTS; are designed to identify the current strengths & weaknesses of an applicant to effectively perform specific tasks, e.g. abstract reasoning & complex problem solving

• E.g. Customer Contact Aptitude Series (CCAS) is an ability test that measures the core reasoning capabilities related to sales & customer service

• APTITUDE TESTS; similar to ability tests, measures • An applicant’s style of work• How the person interacts with other people• Whether the person has an interest in or ability to perform certain tasks, like selling

• E.g. The Compbell interest & Skill Survey (CISS) that can be compared to the scores of the firms current successful SP (www.pearsonassessments.com/tests)

• So, it is less appropriate for applicants who have no sales experience

• EMOTIONAL INTELLIGENCE (EQ) testing; is an individuals ability to process emotional info as it relates to the perception, assimilation, understanding & management of emotional emotions

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• Tests experts recommend that SMs should base their hiring decision on COLLEGE GRADES as well, which is considered a more recent measures of a person’s aptitudes including (ability to learn & what he actually worked on & did learn)

• International Risk Management Institute(IRMI)-Dallas, Texas, pioneered additional test that predict success in specific sales positions by identifying the traits a SP needs to be successful

• The results of the test provide interviewers with the common Top & Bottom traits sales candidates have, as well as ‘Red flags” or concerns about the candidate

• IRMI claims that the exam goes beyond personality testing & determines whether candidates have the “thinking orientation to be good in sales & like it”

• SMs like it because: 1- it prevents them from hiring people with the wrong personality for sales jobs, 2- the test generates questions that allow them to customize the interview process for those candidates who are a good fit, 3- the managers are also provided with appropriate answers for each question so they can compare candidates’ answers

• Regardless of the test done, the firm must ensure it is valid• The test must differentiate applicants based upon who will be successful &

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• Researches shown that no one personality or mental ability test will determine a SP success

• Testing should be utilized as a confirming factor in the selection process, not an eliminating factor

• No applicant should be denied employment based upon a personality or mental ability test when all other factors paint an entirely different picture of the applicant

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THE PERSONAL INTERVIEW• Considered by many people to be the most important stage of the hiring process

because managers heavily rely on it, especially because testing applicants can be expensive

• After completing multiple interviews, it is important for the SMs to compare the info they gathered during the interviews & come to a consensus about that info

• Typed of interviews are: • Structured interviews• Semi-structured interviews• Others done in conjunction with structured or semi-structured interviews;

• Stress interview (Role playing or Field exercise) by placing the applicant in an unstructured situation to see how well he will perform

• Group interview; a group of applicants are placed in a group or open forum & encouraged to ask questions

• Panel interview; placing a single applicant before a panel of 2 or more reps , so the applicant will need to maintain his composure & eye contacts with the panel members. If too stressful, the applicant may be discouraged & look elsewhere

• A field observation or attending a social company function; traveling with another SP & observing sales calls on current clients. Is it the type of job the candidate wants to do everyday?

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STRUCTURED INTERVIEWS

• Prior to meeting with applicants, the SM or interview team prepare a list of standard questions along with a range of acceptable answers to be asked to all applicants

• The Q&A should be around the applicant’s background, work experience, sales experience, formal education & hobbies

• Advantages:1. For new interviewers, it offers confidence & structure to the process2. It ensures that important areas are covered during the interview3. Standard questions make it easier to record & compare applicants’ responses4. When multiple interviewers conduct an interview, a structured interview more readily

allows them to compare their notes & discuss the answers applicants provided

• Criticism:• Less experienced SMs may simply focus on reading the questions & recording the

applicants’ responses rather than critically evaluating the answers, probing & taking sufficient notes with which to compare applicants later

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SEMI-STRUCTURED INTERVIEW

• Allows SMs to ask a series of open-ended questions that applicamts can address in their own words

• Allow the interviewer to gain insight about the applicant as the discussion moves along a natural, logical course

• May include asking detailed questions about actual situations• The SM or interviewer must identify the areas that require more probing & be

able to redirect the discussion• According to one study, structured interviews are twice as reliable as semi-

structured interviews in predicting how well a person will perform on the job• More often used when interviewing candidates for higher-level SM jobs, to

gain a sense of his overall strategic sales vision for the firm

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BACKGROUND VERIFICATION

• Because the past performance of candidates is a potential indicator of the person’s future performance, and because it is usual & routinely for candidates to exaggerate & even lie about their past performance, educational requirements, salaries, working hours & time working for former employers, so, SMs, HR or “independent background checking firms” must verify the info given by the sales applicants on their app form

• One way to gauge the honesty of the applicants is to ask “judgment-neutral questions” on the app form, e.g. starting & ending dates of employment, positions & ranks held, accounts managed, level of sales, sales training completed & salary earned

• If background checks showed that the applicant has given false info, this raises questions about his basic honesty, trustfulness & reliability

• Also contacting the references is very important• It is helpful to ask applicants to provide different categories of referrences,

business, financial (bank), educational (prof)• For more independent assessment, we can ask the reference himself about

other references who are familiar with the candidates work • Conducting credit checks

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PHYSICAL EXAM

• A final step of the selection process• It was used from some firms to require drug tests & physical exams as a

normal hiring procedure, but the American disabilities Act 1990 prohibits preemployment physicals

• Once a job offer has ben extended, the employer can require all applicants to complete a medical exam that focuses on job-related physical requirement if needed

• A job offer can not be made conditional upon the results of the medical exam• It is prohibited for the firm to ask whether the applicant has a disability or to

ask about the severity of an obvious disability

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MAKING JOB OFFER

1. The SM or interview team ranks each applicant in terms of their fit & potential for joining the firm

2. The SM contact the top applicants to make the job offer, calling them over the phone & asking them if they are still interested in a sales position with the company

3. If the answer is ‘yes’ then the SM describes the position responsibilities & make the job offer

4. Sending a 1st class letter containing a formal offer of employment. The letter should clearly state:• A deadline for accepting the position• Info concerning the responsibilities• Starting salary• Allowable moving expenses• Formal training dates• Time before his first formal performance evaluation• When he will be eligible for a raise• The number of vacation days allowed for him

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TRANSITIONING NEW HIRES

• Tour in the area in which they will be working, to provide them understanding of what life would be like if they accepted the offer

• Showing that your company is unique, exciting place towork, emphasizing on the selling points of the job itself, the career development opp, selling the company’s image & brand

• Ask what persuaded the person to say ‘yes’ & what he thought about each of the company contacts & the interview & hiring process

• Sending company handbooks, product sheets, work materials, & other job & company info that can ease the new hire’s transition

• Sending a welcome package of apparel, pens, etc. with the company name or logo can help the new hire feel that their decision is official & help to build commitment

• If joining the new hire will take few months, regular calls & emails from the coworkers & Sms can help maintain the person’s enthusiasm for the job

• Inviting the new hire to celebrations, meetings & other activities can help in transitioning the recruit to his new job

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WHY DIVERSE SALES FORCE IS IMPORTANT

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AVOIDING COMMON HIRING MISTAKES

• Rushing to hire someone

• Failing to conduct a proper job analysis

• Not generating a sufficiently large applicant pool

• Poor interview planning

• Not conducting a comprehensive interview

• Failing to perform a background check

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GLOBAL SALES MANAGEMENT

• Who should be hired to represent your company abroad?

1. Expatriates

2. Local nationals

3. Third-country nationals

• Evaluating the success of the firms sales force recruiting & selection efforts:

By using a Matrix to evaluate the sources of your applicants’ evaluation criteria

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