Barbara Corcoran: Hiring or firing, these are the keys to create a killer sales team
When it comes to hiring great salespeople, the statistics do not paint a pretty picture. In the U.S., roughly a third of all salespeople leave or are fired from their workplace every year. What’s more, while these salespeople are working, 57 percent fail to meet quotas. If this many salespeople are underperforming and being let go every year, what could employers be doing to make better hiring decisions? Is there a better approach to managing sales teams?
Barbara Corcoran — the Shark Tank investor who turned a $1,000 loan into a multi-million-dollar business — believes she knows how. In her Big Think+ lesson, Corcoran talks about her experiences deciding which salespeople to hire.
I am very good at hiring, because I’ve made a lot of mistakes. I’ve learned to look at the specific individual and look for the most important traits and then ignore everything else, especially the resume. It sends you in the wrong direction. I learned through trial and error what makes a great manager, what makes a great salesperson, and that’s who I always hire.
Improving your quality of hire
It’s important to have a system when making hiring decisions. Often, just relying on first impressions or bullet points on a resume can result in low-quality hires. In particular, having a data-driven strategy to inform your talent management decisions is crucial. Keeping track of the quality of a hire can help hiring managers improve their process and track which methods work well and which do not — and there’s few domains in which hire quality matters more than in sales.
Unfortunately, quality of hire can be challenging to measure. According to a LinkedIn report, 50 percent of companies measure hire quality through performance evaluations, 49 percent on turnover or retention statistics, and 43 percent through the hiring manager’s satisfaction. But only a third of the surveyed companies felt that their methodologies were strong. Clearly, there’s room for a more data-driven strategy in the hiring process to ensure high performance and avoid excessive turnover.
Learning to fire better
When managing a sales team, it may be tempting to think that more is better, but this is not the case. A commonly cited statistic that illustrates this is the Pareto principle, or the idea that 20 percent of your efforts generate 80 percent of your results. Studies have shown that this is borne out of sales teams, as well; about 20 percent of salespeople generate 80 percent of sales.
That’s why managers shouldn’t be afraid to let underperformers go. Nobody likes firing their employees, but Corcoran argues that doing so is probably better for everyone involved. “I never fired a salesperson who didn’t love me for it,” she says, “because I allowed them to move on to something potentially that would make them happy.”
Still, letting an underperformer go can be difficult to do. “The very managers that are great at hiring are terrible at firing,” says Corcoran. “Nobody’s good at it.” That’s why it’s important to rely on a system when making firing decisions, rather than letting emotions dictate whether somebody stays on or is let go. Making these kinds of decisions in an objective fashion is what separates the truly great sales teams from the just so-so.