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Hiring Better: Your Business – The Movie

Published with the permission of OMS Distributor Harry Lakin, Founder of Hire Capacity

A great film director once said “90% of my job is casting. If I cast the right actors in the right roles, the movie will be amazing and I can take 100% of the credit for just 10% of the work.”

Hiring for your business works in a similar way – the right people in the right roles means higher productivity, greater quality, and a better overall experience for everyone. Let’s just say…a bigger take at the box-office!  And you, lucky hiring manager, get to reap the rewards and take credit for a job well done.

You see, my friend, you are the casting director for the movie that is your business. The tricky part is figuring out just who should slot in what roles when hiring time comes around.

Cast The Right People In The Right Roles!

Tom Hanks and Morgan Freeman are both Academy Award winning actors, with tons of talent; but suffice it to say each actor is more qualified for certain roles than the other.

Shawshank Redemption would have been an entirely different movie if Tom Hanks had been Bobby Dufresne’s prison friend Red and frankly, I can’t even imagine Morgan Freeman as Forrest Gump. Can you?

The same holds true for your business. It’s incumbent upon you to match the right candidate with the right role, often with only a resume and an interview as your guide. Wouldn’t it be so much simpler (not to mention faster) if you had more and deeper information…like a way to peek inside of your candidate’s heart and brain to help you figure out which candidates are best suited to the rigors of the positions you need to fill?

BOOM!

Done.

Behavioral Assessment makes the hard work easy, so you have a meaningful way of matching candidates with positions.

Of course, the flip side is the need to completely understand exactly what the position you are trying to fill calls for in a candidate. Every role requires behaviors that high achieves will possess. You need to understand what those qualities are…before you even talk with your first candidate.

We can’t start filming until we have a script.

Just as a director would never start awarding parts without a script, you should never begin to hire without building a job model for the role at hand. After all, if you don’t have a target, how do you know what you’re aiming for? 

More often than not, jobs are a lot broader than what’s written in a simple job description.  Often, we wear a lot more hats than just the one with our title on it. For example, some sales roles also demand a lot of the functions customer service typically provides when something goes awry. Likewise, a delivery tech may also be required to deal with workplace safety from time to time. And we all know that hiring managers also have to have some measure of HR ability. In short, job descriptions are not all-encompassing and are not really what candidates should ultimately be measured against. What we really need to do is build a great job model to compare candidates to.

Creating a job model is not as daunting as it sounds. In many cases, using the right tools a comprehensive job model can be created in less than an hour.

Once this job model is in hand, you can begin to objectively compare candidates against the role and indeed individual candidates against each other to find the best of the best for your company.

So, while you may not actually end up hiring Tom Hanks or Morgan Freeman – if you hire the right people for the right jobs, you’ll be well on your way toward business stardom yourself!

Though if Morgan Freeman does walk through your door, hire him. Don’t even do an interview, just hire him.


With OMS you can gain a competitive edge by combining personal decision-making skills and know-how, scientific measurement techniques, and web-based organizational diagnostic tools into a comprehensive decision-making system for all your managers. With OMS your executive team can develop strategic initiatives far more likely to succeed, and make faster, better-informed operating decisions leading to higher individual and group performance, greater retention, and lower costs. Learn more: http://2oms.com/start/

Originally published on LinkedIn

8 Ideas to Help You More Successfully Hire Salespeople

When hiring, we weigh known facts along with many unknowns, and frequently to do that within a framework of assumptions. What should be failsafe is verifying the facts – for example, dates and timelines; positions held; involvements; and schools attended. Where we are far more likely to stumble is over the unknowns, which mostly relate to what the candidate has personally accomplished in previous jobs and how, and to what talents and personality traits the candidate possesses.  More ill-defined and open to interpretation, these are frequently left to the vagaries of inference and personal opinion. When we factor in some assumptions about job requirements, more likely based upon beliefs than upon analysis, we create an even bigger obstruction. It’s no small wonder then that the hiring process seems so haphazard in so many instances.

The Cost of the Wrong Hire Continues to Escalate

Since success in many sales jobs is greatly dependent upon personal attributes, it’s not surprising that the list of unknowns surpasses those of most other positions, making these hiring decisions more fraught with uncertainty and risk.  Although the past 50 years have spawned a great variety of hiring tools and techniques, across the board they haven’t seemed to move the ball forward. With more complex and more demanding sales jobs, turnover is no less a problem today than it was in the past, and the costs associated with hiring mistakes have escalated substantially. The net result is that every bad hire today is more expensive and disruptive to a company’s business than it was a generation or two back.

Hiring, like so many other matters in life, comes down to using common sense and doing right things. Based upon my 50 years of experience implementing hiring and candidate assessment systems in all types of sales organizations, I believe that the solutions are simpler and more obvious than what people might expect, and that any company can make a dent in the problem if it incorporates these eight recommendations.

 1. Add Insights and Objectivity with Psychometrics

Use a valid psychometric as part of the assessment process. They offer objective as opposed to subjective information about behavior and motivation, and the good ones can discern small but often important differences among candidates. Even the best interviewing techniques are still subjective in nature and can’t measure traits or personality attributes with any degree of precision. Our studies have shown that the actual differences between top and middling performers are often a matter of degree, so subtle and nuanced that they are indistinguishable in an interview. The Law of Small Differences – small differences in input are accountable for large differences in output – applies to job performance, so you had better be able to measure those small differences.

2. Simulation Exercises… Hold Tryouts for Your Candidates

Use simulation exercises to observe how your candidates behave in important job-relevant situations. Simulations, when properly constructed and used, are the equivalent to a tryout in the world of sports. They are your opportunity to see how the candidate’s personality, intelligence, knowledge, and skills work together in high-impact sales activities. Such simulations don’t have to be lengthy or overly complex, either. Many years ago, based upon our assessment center experiences, we helped pioneer the concept of mini-simulations – 20-minute exercises where the interviewer roleplays with the candidate while observing and documenting. Use three and you’re done in an hour. Particularly important, you can also correlate your observations with the results of your psychometric, an extra layer of behavioral validation.

3. Question Assumptions and Stereotypes

Make the effort to question accepted beliefs and stereotypes and to look at your sales job with a new pair of eyes. Don’t blindly accede to notions such as our sales job is the same in every territory right across the country, or our people must be competitive hunters who are motivated by closing. They might be true, but they might not be. These are just simple examples, but repeatedly over the years our studies have produced findings that have challenged such assumptions. There are, in fact, plenty of sales jobs where too much intensity and drive to win are counter-productive; there are also poorly structured sales jobs where the traits necessary to perform well against one criterion actually produce lower performance against some other criterion! Talk about a no-win situation! And finally, avoid, the service-sales pitfall. Realize that sales motivation is not similar to service motivation, so don’t expect that one person can perform well on a sustained basis against both expectations. You will either have a bored, unengaged sales person who will leave, or a frustrated service personality who hangs in but never achieves the sales goals.

4. Job Analysis Is an Absolute Must!

The fourth recommendation is really an extension of the above point. I never cease to be amazed at how few companies make the effort to undertake a comprehensive job analysis periodically and produce a job behavioral profile or screen. Disinterest, a lack of time, over reliance upon intuition, or a know-it-all attitude, whatever the reason, too many companies fall back on those simple stereotypes that may be well off the mark and have little in common with their sales jobs. To quote Lewis Carroll, “If you don’t know where you are going, any road will get you there.” You need a target, not the proverbial broad side of a barn! Good job analysis is a collaborative activity and it takes time. You need to get into the weeds, distinguish the trivial many activities from the vital few that drive performance, and then build a behavioral profile based upon what is essential to top performance. When your profile is complete, you must reality-check it against top and bottom performers to test your hypothesis and/or to validate it. It’s not easy, and it took us years to refine our JAX tool that does this type of analysis for our clients. The bottom line is that, regardless of how good your assessment tools may be, their value is greatly diminished if your job models aren’t rooted in robust, factual analysis.

5. Understand Can-Do Versus Will-Do Motivation

Understand the motivational differences in the people you evaluate for sales roles in your business:

a) can’t do the job and is not motivated to do the job;
b) can’t do the job but is motivated to do the job;
c) can do the job but is not motivated to do the job; and
d) can do the job and is motivated to do the job.

This advice may sound like it comes from a grade school primer, but time and time again we encounter recruiters and hiring managers who just assume that if a person can do the job, he or she will stay in the job. It’s just not so. There are lots of jobs people can do but do not want to do or do not want to do for more than a short period of time. Outbound call centers in particular hire many people with high potential who depart within a few months. It’s mis-hiring – they want salespeople with some degree of sociability, some degree of personal drive, and some degree of urgency, but lacking precise assessment tools, they hire people with too much of those qualities to be comfortable in the more limited and constrained call center environment. In your business figure out who can do the job and then figure out what attributes will motivate a person to actually stay in the job. If those two elements cannot be reconciled, then you need to make a trade-off: will you settle for higher performance or lower turnover?

6. Train, Train, Train

Regardless of the size of your business, train your salespeople. And not just any sales training, because all the marketplace offerings are not alike. Specifically, you need training that is relevant to your selling context and model, and that addresses the necessary behavioral adjustment issues new hires are expected to understand and make. There are millions of salespeople in this country and it’s just incredible how many have had little or no training and how few have even read any books on selling. The notion that if you hire someone with sales experience, the person is likely to be more successful is a fallacy. The reality is that you may be hiring someone who has learned the wrong things, or someone whose sales experience is not relevant to the critical factors that drive sales in your business. Even if candidates can claim some training, don’t assume that you can just bring them on board and turn them loose on your valuable customers and prospects.

7. Managers Need to be Skilled Coaches

In partnership with training, recommendation number seven is be dead certain that your field sales managers really know how to coach and are measured on their coaching performance. As Jim Collins said, getting the right people on the bus is essential to business success, but that’s only part of the performance equation. When they are on board you have to do the right things with them, and that means regular, personal, performance-related feedback and possibly behavioral redirection. I always challenge assumptions, and one of the big ones is that if you are a manager you can surely sit down and coach someone else. Coaching is not some universal human talent, and the reality is that most managers for a variety of personal reasons struggle with it. Some avoid disagreement, some never ask questions, some are too controlling and give solutions, and others perform a one-and-done. The process gets derailed in a million ways. So, if you want to protect the investment you are making in your sales representatives, make certain your managers really know how to coach and don’t simply follow some 5-step process that vendors claim works with all managers. Nice idea, but one size does not fit all.

 8. Go with the Odds… A Winning Strategy

My final recommendation is that when you use a psychometric, really use it. Don’t just pay lip service to it, referencing it only when it supports your personal interview impressions. We see this a lot with tests. Many interviewers and recruiters think they are smarter than a test, and they disregard it when it conflicts with their interview perceptions. They fail to understand that there are so many variables that affect sales performance that hiring decisions really come down to playing the odds. Studies make it clear that good psychometrics, even though they may account for only 40 to 50 percent of performance variance, are more predictive of job performance than interviews. After all our experience with both psychometrics and with interviewers, I’d put my money on the psychometric any day when it does not align with the interviewer’s or even interviewers’ personal impressions. Just like gamblers, for the best outcomes over the long haul, your best strategy is to go with the odds.

I hope that some or all of these ideas help you in your future hiring. They are the product of thousands of observations with interviewers and in the field with sales managers, a myriad of statistical analyses using psychometrics, and the common sense that causes you to just shake your head when you hear some of the outlandish things that people believe and say about evaluating and hiring candidates. At the very least, I hope I have caused you to think about and even question some of the things you may have taken for granted about hiring and developing salespeople.

That Time Your Lawyer Was Glad You Used A Hiring Assessment

Published with the permission of OMS Distributor Harry Lakin, Founder of Hire Capacity

Inevitably, if you’re in business long enough, it’s going to happen to you.

You will pass on a candidate and it’s going to tick them off to such an extent that they’re going to threaten to sue you.

They may claim racism, sexism, ageism or a host of other “ism’s”.

What do you do?

Even if you’ve been extra thorough about interviewing, resume investigating and reference checking, you know, some attorney somewhere will be willing to take the case.

You and your company are not racist or sexist or ageist…but that really doesn’t matter now does it? This person and their mouthpiece want their pound of flesh, er…payday!

Are you paying close attention, because I’m about to give you your “Get Out Of Jail Free Card”.

It’s imperative that you use an objective NORMATIVE hiring assessment as a regular part of your hiring process.

Below is an example of the output from our OMS Assessment. It compares a candidate’s behaviors to those from our JAX Job Model (name redacted). Can you tell from this graph if the candidate is man or woman? Can you tell if they are Asian or Anglo or Native American? Can you tell how old they are? Can you tell if they’re in a wheelchair, or blind?

The answers are most definitely no.

The only information one can discern is about them behaviorally. And, the right behaviors are something you can and should be looking for from the best candidates for your positions.

Further, so long as you’ve clearly created a job model that the candidate has been reliably measured against, you can honestly (and easily) say they’re either a fit or not…and that other candidates (i.e. the ones you progressed with) were a better fit. Add to the mix solid statistical validation and their “ism” assertions become weaker by the minute.

In the instance above, the candidate is in red and the job model required behavioral traits are in black. Clearly, as anyone can see, this candidate is not a fit for this role.

Don’t get me wrong. They may still sue you, but the more arrows in the quiver that’s your defense, the better off you’ll be in front of a judge or jury (should things progress that far).

All of this, comes on top of the added BONUS you’ll get by having a phenomenal way to tell which candidates you should actually BE hiring.

That last sentence there is a feeble attempt at tongue in cheek humor. Of course you should implement a sound assessment strategy as part of your selection criteria for actual hiring.

But, If a great assessment tool has the added benefit of being your out, when a disgruntled candidate starts rattling sabers…

Well, what’s piece of mind worth?

Sorting Out the Junk Science in Psychometrics

Valid psychometrics are highly beneficial tools. By helping us objectively measure and describe human attributes, they offer us important insights into candidates and employees, which are otherwise very difficult to pull from either interviews or work observations. By comparing test results to accurate job profiles or benchmarks, potential context-relevant job behaviors can also be predicted. And if those psychometric tools use a normative design to compare respondents to a broader population, as they should do if used for decision-making applications, they further enable us to more precisely compare candidates.

Today, under the growing influence of big data and with AI (machine learning) knocking on the door, it is not surprising that some test vendors are seeking competitive advantage with these and other fascinating scientific developments. Behavioral economics, being all about numbers and predictability, certainly holds the promise of some exciting changes in psychometrics, but it is important that we distinguish what are real advances from the mere illusions of junk science.

One constant over the years is that we all look for silver bullets to simplify our decisions. However, not all decisions can be simplified and not all simplifying solutions are what they are touted to be. We live in a world of exaggerated claims and all sorts of products and services fall short of their marketing hype. In some areas that’s no big deal, but with people decisions, when careers and management plans are on the line, the consequences and costs can be very significant.

The issue is all about prediction. How precisely and accurately can we use a psychometric to predict job fit, behavioral differences among people, or job performance. Since more and more test vendors are claiming they can provide these answers, it’s worthwhile to take a hard look at the veracity of these claims.

Junk Science in Psychometrics

Actually, junk science crept into the field of psychometrics many years ago, but we just never called it that. The most obvious example is the deceptiveness of face validity. Any vendor website insinuating that a sampling of test respondents who are in high agreement with their test results connotes meaningful validity is either ignorant or deceptive. Reading the works of Dan Ariely or Daniel Kahneman on the irrationality of behavior will make it very clear that validity has no relationship with agreement or personal likes and dislikes. Validity is a statistical measure not an emotional one, and emphasizing face validity, which is not validity at all, likely indicates that the vendors don’t have real validation or certainly don’t want you to see what numbers they do have. Take a pass!

Another scientific stretch has to do with the job profiles that many tests use in a rather absolutist way. Job profiles are critical to accurate decision-making, but with too many tests, a simple set of generic templates or stereotypes replace actual job analysis. Having undertaken literally thousands of job analyses over the years, many employing content and criterion validation methodology, there’s simply no question that one size does not fit all.

Job Analysis Should Be a Context-Relevant Process

For the more complex jobs for which behavioral assessments are generally used, job analysis should be a context-relevant process taking into account unique situational variables, for example, the personalities of the “boss” and the other people involved, along with variations in cultures, performance standards, job expectations, management styles, training, quality of supervision, etc. In our experience, we have found numerous instances where, because of such variabilities, seemingly similar positions in different organizations required very different personalities. Granted, some jobs can be cloned, but they tend to be task and specialist roles and/or entry level, including service functions, non-transactional retail sales, data entry, and reporting roles, etc.

Getting the job right – understanding both nuanced and unique factors that drive performance – is at least 50% of a selection decision. But all too frequently, simple assumptions and inference supplant what should be a thorough analytical process, resulting in inaccurate job profiles that lead to flawed candidate searches.

Test Design Matters

Fitness for purpose is yet another area where claims are sometimes misleading. Such is the case with normative and ipsative tests. Simply stated, a normative instrument uses a questioning format (for example, yes and no response variations) that enables norms for some population to be developed and individual responses compared to those norms. One candidate might score at the 80th percentile in a certain construct and another at the 40th percentile, so we have a statistical basis for comparing the two people.  The variance in their scores further provides us with a means of determining how their behaviors would differ in specific situations. Since the intent in using a psychometric in decision-making applications is to objectively compare people, this manner of test design is essential in applications such as hiring, internal placements, and succession planning.

Ipsative instruments use a different questioning format and are intended for different purposes. Using variations of forced choice questions (for example, Most or Least like me), MBTI, and the many versions of DISC, provide only a relative indication of traits or attributes as opposed to a score measured against a statistical norm. Ipsative means self-referent, which translates to using oneself rather than others or a defined population as a norm. So, although ipsative tests indicate how one individual prefers to respond to problems or people, etc., they offer no meaningful correlation of comparative strength or visibility of traits when attempting to compare that person to another. If a respondent scores high in dominance, for instance, that simply means that dominance is a more prominent behavioral factor than the person’s other traits, but it cannot be said that the person is more or less dominant than someone else with a similar test configuration.

Suitable for coaching or other self-awareness applications where comparisons to others are unnecessary, ipsative tools are neither designed for nor adequate for decision-making purposes like hiring. But in the marketplace, it’s a case of the blind leading the blind: many vendors either do not understand or choose to just ignore the limitations, and buyers do not really understand what they are buying or using.

Knowing how excited people are to get on the big data train and find that silver bullet, the latest trend is for vendors to attempt to translate what is essentially descriptive data into a single, simplifying comparative number. One vendor, for example, claims that they can provide a number score showing how each candidate compares to the job. It sounds good, and it may attract some buyers, but claiming a degree of predictive precision that is not psychometrically possible is a real stretch of the imagination.

False Assumptions Result in Inaccurate Results

The problem is with the assumptions that are being made about the data being used, all of which have no margin for error. The first assumption is that the job benchmark is accurate and complete. We know that if it’s a standard job template or a stereotype rather than a context-relevant creation, the target is questionable and might even be way off the mark. How meaningful is a predictive value if the candidates are being compared to the wrong target information?

The second assumption, also about the job profile being used, is that in its entirety it captures what is behaviorally significant in the job. The reality is that this is very unlikely. Over the years we have undertaken scores of criterion studies on diverse jobs and in these analyses, we correlate test constructs with the objective performance data for a group of people. We generally find anywhere from one or two to maybe a handful of statistically significant correlations out of almost 50 possibilities. So, whereas individual traits or combinations of several traits may be predictive of some aspects of performance, the entire personality syndrome is not. Thus, comparing a candidate’s test results to a behavioral profile, even if it is accurate, means comparing characteristics that may have little or no relevance to actual performance, and which may actually run counter to the several characteristics that actually do matter. The bottom line is that the predictive value assigned to that candidate’s results may be attenuated by other characteristics that have little bearing upon job performance!

The third assumption tends to gloss over the fact that psychometrics, at best, is an imperfect science, and there are practical limits to what can be predicted and how precise the prediction can be. Start with the well-accepted general assumption that behavior (traits, whatever) account for maybe 40% of performance variance in most jobs. That variance factor can be lower in some jobs, for example a nuclear physicist, and higher in others, for example retail sales. So, behavior is an important decision-making consideration, but it cannot stand on its own.  Even the most positive or negative potential effects can be countered by such factors as knowledge and skill, cognitive ability or intelligence, attitudes, as well as physical and emotional constraints. Factor in the effects of randomness, which is always a consideration in measuring human abilities, and you then realize how unrealistic and unstable any specific number might be. A more plausible approach would be to use ranges of compatibility, for example, highly compatible or low compatibility, because that is about as close to the target as you can reasonably get.

As I stated right at the top of this piece, psychometrics can be very informative and very beneficial in so many applications, but they need to be used the way they are intended to be used and within a framework of reasonable expectations.

With OMS you can gain a competitive edge by combining personal decision-making skills and know-how, scientific measurement techniques, and web-based organizational diagnostic tools into a comprehensive decision-making system for all your managers. With OMS your executive team can develop strategic initiatives far more likely to succeed, and make faster, better-informed operating decisions leading to higher individual and group performance, greater retention, and lower costs. Learn more: http://2oms.com/start/

The eight week career, or Why do so many call center sales people leave so quickly?

This article, by Harry Lakin, was originally published on LinkedIn.

Very, very long story short, I was looking through the applicant/assessment data base for a client of mine as part of a project when I came across a name that I recognized. The name, I believed, belonged to one of my eldest son’s childhood friends. It’s an unusual enough name that I thought I’d do a bit of digging on LinkedIn to see if this young man was actually now working for my client.

As a result of my snooping (bear in mind, I did not actually contact him directly), the young man sent me a connection request via LinkedIn, and we proceeded to have a bit of an email exchange.

Turns out this fellow did not work for my client but the subsequent conversation that came from this trip down memory lane could only be described as “eye opening.”

Seems this fellow had applied with my client to be a “sales manager.” To be honest, the behavioral traits of this young man, as revealed by assessment, were not aligned with those that my client has defined as necessary for success in their sales role and so they’d passed on him.

But what he shared next (unprompted mind you), really blew me away. The names have been changed to protect the innocent but otherwise, the quote is verbatim.

XYZ seemed like a really solid company, but had they chosen to hire me I probably wouldn’t have stayed long because I am itching to get back into the health & wellness industry. I am actually meeting with the Regional Director of ABC Gym for a GM spot. I managed a number of 123 Fitness locations for the 1st 1/2 of my 20’s and have missed the industry ever since I left in 2011.”

Am I living in a parallel universe?

Mind blown…!

Let’s dissect his statement:

1.      This young man was applying for a job he really wasn’t all that interested in because he’d really have preferred something else….in an entirely different industry!

2.      He implies that if he’d have been offered the job he’d have taken it.

3.      Had he hired on, he immediately knew he wasn’t going to be there long.

4.      He had an idea in which direction he actually wanted his career to go and was pursuing that path simultaneously.

Now let’s take a deeper dive:

First off, there is absolutely nothing wrong with candidate’s pursuing multiple opportunities simultaneously. In fact he’d have been remiss not to. And, it’s truly a good thing that he had an idea of the industry and role he really wanted. We should always pursue our passions, particularly when they mesh with our innate traits.

But, that’s the only part of his statement that makes a lick of sense to me and sadly, this young man’s thought process is not unique.

Before, I go any further, let me state for the record, this fellow is a millennial. and if this sounds eerily like what Simon Sinek discusses in his recent and oft shared video about millennials that’s making the rounds, don’t shoot the messenger!

You have people, applying to work at your company today, that are of the same mind set of this young man. Your business (and call centers in particular) is nothing more than a stepping stone along the path to their next job or their “dream” career.

Frank Gump’s excellent article “De-Linking Call Center Performance and Turnover” posits that nobody ever went to work in a call center because it was their lifelong dream to do so.

My client dodged a bullet, as the assessment was the thing that weeded this guy out. That’s not to say however that every assessments catches every “short term” applicant. Some will manage to sneak by.

What would hiring this guy have cost my client? There is a significant hard cost to hiring a candidate, not to mention the soft cost of “opportunity lost.” Further, what does turnover do the “morale” of any business?

So, what’s a well intentioned call center manager or business owner to do?

A. Be honest with yourself. Accept the fact that the job you are trying to fill may be just that, a job…and not a career. Too often, what we believe in our own minds is vastly different than reality. Don’t get lost in the sauce.

B. Do everything you can to maximize employee performance while they are working for you. Knowing they may be with you for only a short while…try to get the most out of them while they’re there. To do this first create a job model of what the ideal candidate looks like within the role – within your business. The emphasis is on YOUR. Don’t hire based upon what you think your competitors are hiring. Be diligent and strict that those you do hire adhere to your job model. This is a must even if the pressure is severe to put butts in seats. Doing otherwise will diminish return.

C. Get creative. Find new ways to engage the best of the best that end up coming to work for you. Think about real career paths and make it known to those you hire that exceptional performance will be rewarded with the opportunity for a career not just a job.

You’re never going to reduce turnover to zero. What you need to do is figure out what is an acceptable number for your industry or company is and then do everything you can to be beat it. Be vigilant about hiring the RIGHT people for your roles and let the chips fall where they may.

About Hire Capacity

Hire Capacity is a foremost company in the Hiring Assessment Space. Using the Organizational Management System, Hire Capacity helps organizations develop hiring selection and retention strategies. Learn more here.

How is Today’s Higher Turnover Hurting Your Business?

 

As more and more millennials enter the workforce, some of our traditional measures of corporate performance are losing their importance or even becoming moot. Certainly near the top of the list is employee turnover, which traditionally has been a leading indicator of employee satisfaction, the quality of work life, and the quality of management. Human resources surveys have frequently cited high turnover as an obvious symptom for a wide variety of corporate ills. In a more tangible way, turnover has always been considered as a profit improvement opportunity as well as an ancillary measure of HR effectiveness.

Why is Turnover Ratcheting Upwards?

We know that turnover is increasing, yet somewhat surprisingly, it is no longer a meaningful bellwether of corporate performance. What’s interesting is that the very reasons it is on the increase are also the reasons for its disassociation with corporate performance.

turnoverThe employment psychological contract that for so many years framed the employer-employee relationship has been dissolving for more than twenty years and now is little more than an affirmation of at-will employment. To respond to the cost and ever-changing competitive challenges, employers pursue greater workforce flexibility by focusing on today’s jobs rather than tomorrow’s careers. More and more people are hired to do jobs, with little consideration given to either their development or their careers. Call centers, driven primarily by economics, have transformed sales in a great many organizations, creating jobs with systemically high turnover along with minimal prospects for career advancement.

Another equally understandable tack to address the rapid, ongoing marketplace changes that companies face is to seek out new employees offering broader and more diversified experiences rather than emphasize internal moves and promotions as was previously the norm. While this expands the employer’s knowledge base and may add fresh ideas, the downside is that it chips away at advancement expectations and encourages current employees to then pursue external opportunities themselves.

As I write this, the Department of Labor’s official unemployment numbers are in the 5% range, but in real terms, unemployment and underemployment are at historically high levels. Despite the numbers, there has been such a rapid transformation of workplace knowledge, skill requirements and cultural values that demand greatly outstrips supply, and many, many companies cannot find the talents they need! It’s no small surprise then, that with today’s extensive communication options, people are readily aware of job opportunities and quick to move on to something they perceive as more advantageous.

A fourth causal factor is very much a generational phenomenon. Supported by an expanding framework of social services, millennials perceive work and the role of work in their lives very differently from preceding generations, including those of their parents and grandparents. The silent generation and the baby boomers in particular, having faced unemployment and retirement uncertainty without all of today’s safety nets, were motivated in part by insecurity that is alien to the experiences of younger workers in 2016. In fact, social conditions have altered values so much that a great many millennials seek out less structured, more situational types of jobs that are part of the gig economy, such as driving for Uber, doing contract work like coding and consulting, or holding down several part time jobs as opposed to one full-time job. They have less angst about their careers or how they will manage their retirement someday, and they certainly don’t fear quitting one job to move on to another.

What Are the Consequences?

With forces in motion that are pushing turnover numbers continually higher, we have to ask, what does it mean for business? Are we potentially better off, worse off, a combination of the two, or simply running on the spot? Since we’re still in a transitional phase with respect to many interdependent workplace changes, including the matter of turnover, there’s more conjecture than certainty in answering the above question, but some effects are apparent right now.

As people more frequently move to new organizations for money, hiring bonuses, additional perks, or advancement, the net effect is that work is evolving into a more transactional relationship. The “old” psychological contract is being replaced with a new tacit agreement in which the employer says, “I need you today, but won’t make any promises about tomorrow,” and the candidate responds with, “I understand, because I don’t know if I will be here tomorrow, either.”

What’s really in danger of being lost here are employee commitment and engagement, the holy grails of so many HR schemes and initiatives.  As they come down, they knock over the productivity domino as well. Going right back to Herzberg’s KITA (it’s fascinating – look it up!), we have always known that there are clear limits to what we can buy. Much as a passionate guerilla force has a powerful psychological advantage over paid mercenaries, employees with a longer-term commitment are a sure bet to outperform those with a resume that gets updated daily.

Another apparent casualty is the training, development, and preparation of future managers. Business organizations once upon a time made substantial investments in future management knowing that what they spent would have valuable and essential payback at some point in the future. Long before turnover rates accelerated, it was actually in the early 90s that major businesses began to send so many seasoned and longer term employees packing as they pursued major cost reductions. Not wanting to develop talent for their competitors, companies have never replaced what they discarded, and today hope they can acquire much-needed management knowhow in the marketplace. What they are really acquiring are people who may have been a lot of places, but who never settled in one spot long enough to receive the training and longer-term mentoring that is fundamental to grooming managers. With our current emphasis on greater collaboration, the nature of management is changing, but with almost 50 years of observations in 2000 entities, my personal view is that the quality of management today is not on a par with what it was twenty-five years ago. Most experienced executives I have spoken to feel the same way.

Perhaps even more disturbing, in many jobs where knowledge and genuine expertise can only be accumulated over time, competency is deteriorating. This is tough to prove, of course, but it comes down to common sense. Cognitively demanding jobs may not require the full 10,000 hours as Malcom Gladwell has purported, but it’s highly doubtful most can be mastered in a year or two. Whether it’s teaching, writing, undertaking statistical analyses, building cabinets and furniture, or rebuilding an old Ferrari engine, experience is a big part of success.

Increasingly, younger workers don’t stay in one place long enough to move far enough up the learning curve to develop the insights and understand the nuances that have such impact upon either decisions or the quality of the work. When someone’s resume shows many different jobs of short tenure, as so many do today, it is questionable how much expertise and knowhow the person has really acquired. But here’s the kicker: as the phrase goes, they only know what they know, and in their minds they actually believe they have mastered all they need to know to progress. Sadly, employers are facilitators! Hungry for talent, they are quick to hire, because just good enough is good enough.

How Do Companies Survive?

To remain competitive, or maybe just to survive, companies with high turnover, where much of it is systemic, for example, outbound sales call centers, need to decode what the high turnover message means about their business. Many such organizations do not differentiate between turnover they can and can’t control, wasting resources and time filling perpetual vacancies when they should in fact be analyzing every facet of their selling model to address the systemic problems. In some businesses, the recruitment tail is clearly wagging the dog, and no sales organization is able to sustain success when it can’t attract and retain a solid core of high performers. Systemic turnover is not the problem in itself, but rather, it is a symptom of bigger, more serious issues with the design of the jobs or with the organization.

We all know there’s no turning back the clock on change. As work relationships become more transient, there are certainly employers and workers who will embrace the changes that are happening, particularly new businesses employing mostly younger people. Work plays a less prominent role in the lives of Generation Z, and primarily through social media, they are finding new ways of building relationships at work and maintaining them when they depart. They are coping well. But, for others, the overall quality of the work experience is becoming less satisfying and less meaningful as they lose the sense of community at work that has been an important part of their identity. It’s not a question of right or wrong, but transformations with such consequential impact need to be understood if they are to be managed successfully.

The Costliest People Mistakes We Make

For as long as I can remember, executives and HR department administrators alike have struggled with the problem of turnover and the associated costs. For some companies, turnover is merely an annoyance, but for others, it’s a huge and costly problem. Whereas turnover is currently the headline grabber, a far more consequential issue involves poor people decisions, which never show up in the turnover metrics.

How Many Bad Apples Are in Your Barrel?

Many, if not most, organizations employ marginal performers in critical positions when they shouldn’t be there! Like the proverbial bad apple in a barrel, the entire organization pays the price when this happens. Understandably, the ramifications vary given the variety of different contexts in which they may occur, but the ensuing consequences dramatically outweigh the more clearly measurable costs of turnover. As immense as turnover costs are, the damage is minor when compared to the implications of keeping underperformers in place, a problem that undercuts revenues, growth, and profits today and tomorrow and can even challenge an organization’s business stability.

It’s not surprising at all that business and government organizations make questionable people decisions and, for a variety of reasons, continue to live with them. Sometimes underperformers are skilled politicians with well-honed survival talents; in other instances, there are blind –spots – performance and relationship issues that are plainly visible to subordinates but don’t show up on the radar of managers. The halo effect can also be a factor when reputation or past performance tend to color what the boss and others choose to see. Or, as behavioral experts tell us, many people simply cannot admit to themselves that they made a mistake, and they will stick with their choice, irrespective of the facts. Peter Drucker best summed up the pervasiveness of the problem in an article in the July-August 1985 issue of Harvard Business Review:

Executives spend more time on managing people and making people decisions than on anything else – and they should. No other decisions are so long lasting in their consequences or so difficult to unmake. And yet, by and large, executives make poor promotion and staffing decisions. By all accounts, their batting average is no better than .333: at most one-third of such decisions turn out right; one third are minimally effective; and one third are outright failures.

In no other area of management would we put up with such miserable performance.

We Have People Problems

To play with Drucker’s analogy for a moment… In baseball, a .333 average is pretty darn good, but a .200 hitter, a reliever with a 5.2 ERA, or a starting pitcher with a 3 and 9 won-lost record are not going to propel the team into the playoffs at season’s end. If the manager can replace any weak link to strengthen the team, he won’t hesitate for a moment. But with many jobs in business, it’s not nearly so obvious when someone may be a .200 hitter, or even if the person’s hitting ability should be suspect. Interdependent relationships mean that we operate with much less personal visibility than the players on a baseball team, and consequentially with less individual accountability. In business, there are more places to hide than there are on a baseball field.

Quite apart from the issues of why and how, dubious people decisions occur more frequently than we may be willing to admit, and that’s why so many things don’t work and we encounter so much apparent dysfunction in every aspect of business and life. My sense is that the ratio of these “minimally effective” decisions is even greater now than when Drucker made his famous remarks 30 years ago, and for predictable reasons… A dearth of qualified people (demand greatly exceeds supply), inadequate and misdirected candidate assessment, shortened tenure (read experience and knowledge), and insufficient management training likely account for most of these occurrences.

It is interesting to note that only one of the reasons above is primarily outside the control of the organization: the supply-demand problem, which is a huge issue. Organizations like to think that they hire the best people out there, but in fact, in some areas, managers often settle for the best they can find at that time. There are limits to how long they feel they can leave a key function unattended, so increasingly, employees are being hired out of exasperation rather than exuberance. Sometimes, just to move forward, it’s even a matter of settling for the best of the worst.

Causes and Solutions

If it weren’t enough of a challenge just finding quality people, hiring problems are compounded by the fact that a great many managers muddle around with their people decisions. Certainly, some are very perceptive and astute in reading people, and others have occasional insights, but across the board, most managers aren’t particularly knowledgeable about that which is at the core of their jobs: human behavior, motivation, traits, and how they affect job performance. For years, employee surveys examining satisfaction and engagement have made that very clear. These managers don’t really know why people are or are not successful, or what they should be looking for when they need to replace people or fill new jobs. What happens is that they simplify what they cannot understand, they seek quick, easy answers, and they generalize about and stereotype their job requirements.

Several years ago, I asked five sales managers in completely different industries to describe for me what they were seeking in their sales candidates. Among them, one of the businesses was technical sales, another an outbound call center, and a third involved financial services. I asked for as much detail as they could provide, but what came back were brief, remarkably similar general descriptions. Their responses indicated that they were seeking the same type of candidate, despite all the great differences in their products and services, the nature of their jobs, the sales processes and job activities, their buyers, their selling cycles, and their reward structure. The sales managers were experienced, yet they could only express generalized notions like “strong communication skills” and “closing ability,” apparently failing to see and articulate the behavioral subtleties and nuances of their sales roles.

The solution to this knowledge gap is training – giving managers a more scientific understanding of workplace behavior. In particular, managers need to learn how to understand the motivational and behavioral differences among individuals and how these differences affect job behaviors and performance. Such training can enable more accurate performance predictions. That’s what we offer with ourMaximizing Human Performance training. It’s not theory, it’s not about abstractions such as leadership. It’s empirical, it’s working knowledge about what makes people tick and why they do what they do.

Using the Right Tools to Get Better People and Productivity

Even if we arm managers with the knowledge that they need to better understand individual behavior, they still need the right tools to assess job candidates. Rigorous job analysis, to identify performance-relevant behaviors, is at least 50 percent of the hiring process and is an absolute must for identifying those behaviors that will likely improve job performance, and those behaviors that will prove to be counterproductive. But generating this level of specificity and detail for all jobs requires more time and collaborative effort than most time-pressed managers want to invest. This is why organizations resort to:

  1. simple functional descriptions, which are valueless in hiring
  2. lists of competencies that are too long and too vague
  3. behavioral profiles that are so superficial and general that everyone can fit in somewhere

As the phrase goes, the devil is in the details, and there is no substitute for having a clear picture of what’s important in a job, and how much is necessary.

Interviews Alone Won’t Tell You the Whole Story

Unfortunately, interviews just don’t help much when it comes to matching candidates to job requirements. They are useful for certain purposes, but we must understand their practical limitations. No matter how structured interviews are, or whether individuals or panels are involved, they are still subjective and open to the variances of personal interpretation. The interview atmosphere is often artificial and not necessarily job-relevant. Candidates play roles, and many are often very good at selling themselves; a smart candidate is generally more than a match for a smart interviewer. Responses, then, are often times embellished and can always be fabricated, with little opportunity for verification. An all-too-common outcome is that interviewers with only their general perceptions of what a job requires know to look for only a narrow range of attributes, and they make up their minds when they believe those attributes are or are not present. This is a variation of the halo effect, and it is a major factor in bad decisions. I am still looking, but I have yet to find any bona fide study showing meaningful correlations between interviews and subsequent job performance.

Somewhere around 40 percent of organizations augment their interviews with behavioral testing, but for various reasons, the testing process is hit and miss. Having some objective means of measuring and calibrating candidate behaviors is very beneficial, so long as the instrument is valid and reliable, can be linked to job analysis tools for job-relevancy, and has been developed for decision-making applications. This generally requires a normative design, as opposed to the ipsative personal assessment tools, such as Myers-Briggs or DISC or even simple raw score tools.

To avoid mistakes, combining quality behavioral assessments with job-relevant and appropriately administered simulation exercises is a particularly powerful one-two punch. Combining the two means that the assessor’s observation of behavioral skills and talents can either verify what the test predicts or show how the candidate’s experience and cognitive abilities augment performance potential. Going through the candidate evaluation process and being able to generate this type of insight is pure gold, and goes a long way toward eliminating mis-hires.

Will beefing up assessment procedures completely prevent the problem of hiring marginal performers? No, but it’s a start. At a minimum, there are two other areas to investigate and self-check:

  • Assuming that employees with sound-byte résumés have really gained the experience and know-how you are seeking
  • Assuming that candidates coming from a managerial background have the management skills necessary to be effective people managers

Job-hopping seems to be the new normal, especially with Millennials. According to the BLS, their job tenure averages 3.1 years as opposed to 4.6 for all employees, and over 5 years for Boomers. A quick look at the 500 largest public companies shows that about 100 have average employee tenure of 2 years or less! The issue here is knowledge and competence. Other than exposure to more people, how much do people really learn about industries, problems, solutions, carrying projects through to completion, living with the consequences of their actions and decisions, and developing their replacements, when they ride the bus for just one stop? Not much, I contend, and certainly not enough to be strong contributors in the brief interval they plan to remain with your organization.

What managers know today about management pales in comparison to what managers used to know, and this is not simply a maudlin look back to a bygone time. When people used to remain with companies for many years, employers invested significantly more time and resources in developing their managers, and they got payback. Today there is added emphasis on skill and technology training, and on such areas as managing change, critical thinking, and innovation, but the fundamental management skills like goal setting, coaching, performance management, and developing people seem to be assumed or taken for granted. Some people I have encountered actually believe that, in this supposedly more sophisticated era, such training is unnecessary.

There are two messages here: Look at your own management training (not leadership training!), if it exists at all, and see if you are really teaching your managers the fundamentals that are so vital to their effectiveness. Just remember, people leave managers, not companies. A sampling of articles from those who write about their work experiences carries the common theme of poor managers who don’t really understand what managers should do and how they should handle and communicate with their people. The results are employees who feel devalued, mistreated, and unrecognized. Bad people drive good people out the door.

We all like it when things work as they should, especially our own businesses and those organizations upon which we are so dependent – government, airlines, home builders, and manufacturers, to name just a few. But things don’t happen the right way when incompetent people avoid discovery and occupy important positions.

It was almost 50 years ago when Dr. Lawrence Peter wrote his famous “The Peter Principle,” which explained why people were promoted to their levels of incompetence and remained there. Back then, they tried to bury the problem and turn it over to someone else by bumping people upstairs. Today we allow marginal performers to walk through the front door, and increasingly, the consequences affect our customers. That’s hardly progress!

How to Calculate the Real Cost of Turnover

What do your employee recruitment selection mistakes cost your business? In the course of my business, I have frequently asked this question of managers about specific positions for which they were hiring; for example, sales. Given the wide variety of jobs and industries, the considerable variance in the answers I have received regarding the costs associated with such hiring mistakes has not been surprising. What has been the real eye-opener, however, is my realization that the responses are most always conjecture!

Virtually everyone admits that turnover costs are exceptionally high, but the reactions I see tend to be more blasé and reflect little if any shock. In fact, I get the impression from many managers that they accept this as a cost of doing business and would rather not know just how expensive their turnover has become.

There are the simple cost guesstimates of which we have all heard; for instance, that turnover costs one times an employee’s annual salary, or something approximate. The DOL, obviously averaging all jobs, has said that it costs one-third of an employee’s annual salary or wages. Others make the claim that turnover costs 25 percent of the combined annual salary and benefits.

These estimates are probably not even close to the truth. Depending upon a number of variables, we can generalize for some jobs that turnover costs vary between 100 percent and 150 percent of the annual salary. From a slightly different perspective, an HR publication noted a while back that a major technology company calculated a minimum cost of $600,000 when an upper-level manager died, a number that would be many times higher today considering current compensation levels. The point I want to emphasize is that, although we can catalog some of the obvious line items, what is far more consequential is that turnover is a significant constraint on organizational performance, and merits priority attention.

If you really want to drill down and lay bare all your costs associated with turnover in your business, take into account this surprisingly long list of the cost factors.

You have costs associated with an employee departing or being terminated.

These include:

  • Temporary replacement costs, which may involve employing temporary personnel, or enlisting present employees to perform tasks of the vacant job as well as their own, and which may include overtime (less the salary and benefits that would have been paid to the departing employee).
  • Lost opportunities and lost productivity, as a result of either replacement personnel, or if the job remains vacant for more than a short period of time. This might vary from a 50-percent loss, with fill-ins to 100 percent for a vacant position. For sales territories that are vacant, multiply the quota gross margin by the number of weeks the job remains unfilled.
  • Administrative costs, including the costs of conducting an exit interview and terminating payroll, benefit deductions, benefit enrollments, handling government and legal compliance notifications and administration, and simply processing the paperwork for a resigning employee.
  • Additional management costs associated with the necessary work-arounds.
  • The cost of the training and education and even certifications, which are lost along with the departing employee.
  • The impact of the event on the entire department’s performance and productivity. A lot of wasted time and downtime often accompanies terminations and unexpected departures (this is very difficult to measure but is particularly expensive in more senior roles).
  • Severance costs and the continuation of benefits provided to employees who remain eligible for coverage under these programs.
  • The substantial costs of lost knowledge and skill sets. This might be the most significant cost of all, considering the impact on the company’s operations if there is no immediate way to fill this void.
  • The costs of unemployment insurance – a rise in premiums and/or time spent preparing for an unemployment hearing, or the costs paid to others who may handle the unemployment claim process on your behalf.
  • The costs associated with losing customers or clients that the employee may take with him or her, or the extra costs you will have to assume to retain those customers (another significant cost consideration that needs to be taken into account, yet one that you may only be able to estimate).

Then you have recruiting expenses…

  • Direct costs such as agency fees (15 to 30 percent of the annual salary), advertising, referral fees, job-board costs, and the like.
  • Pro-rated costs for the recruiting process, including the recruiter, clerical assistance, management and supervision in the department, which might require from one to two weeks per hire, given all the tasks associated with the process. Also include the time needed for résumé review and processing along with possible candidate travel expenses.
  • Costs related to interviewing internal candidates, along with the fiscal and opportunity costs associated with preparing for those internal candidate interviews.
  • The costs of conducting background checks, drug screens, reference checks, and employment testing for the short-listed 2, 3, or 5 candidates.

And now you have to train your new hires again…

These costs include:

  • All orientation expenses.
  • All training and certification costs, including time off the job, and associated costs, materials, programs, any related travel expenses, and instructor expenses. These costs generally run much higher in sales organizations and contact-management centers.
  • Take into account an expense factor for instructional equipment and materials needed, including company or product manuals, computers, or other equipment used in the delivery of training.
  • Supervisory or management costs linked to training, learning, review, etc. This can add up to the better part of a full day every week for the manager, for a number of weeks.

Of course, with new employees you will always have ramp-up costs, which include:

The new employee learning the job, the company policies and practices, etc.; the new employee is, as a consequence, not fully productive. Use the following guidelines to calculate the cost of this lost productivity:

  • Low productivity – the new employee is performing at maybe 25 percent for several weeks or a month, so the cost is 75 percent of the new employee’s full salary for that period.
  • For month two and possibly month three the employee is performing at a 50-percent productivity level. The cost is calculated at 50 percent of the full salary for that time.
  • During months four and five the employee is contributing at a 75-percent productivity level, resulting in a cost of 25 percent of the full salary.
  • The cost of coworkers’ and supervisors’ lost productivity due to their time spent on bringing the new employee up to speed.
  • The cost of mistakes the new employee makes during this elongated indoctrination period.
  • The cost, if relevant, of lost department productivity caused by a departing manager who is no longer available to guide and direct the remaining staff.
  • The cost impact, if relevant, associated with the completion or delivery of a critical project in which the departing employee was a key participant.
  • The cost of reduced productivity during a transition period for a manager or director who loses a key staff member or an assistant.

Don’t forget to account for your physical and materials costs too…

These can include:

  • the cost of putting the new employee on the payroll
  • establishing computer and security passwords
  • issuing identification cards and business cards
  • releasing internal and external publicity announcements
  • establishing voice and email accounts
  • other costs such as credit card accounts
  • leasing other equipment such as automobiles, cell phones, and pagers

Small wonder many managers don’t want to to know what employee turnover is costing their business! The costs generally add up to a lot more than what simple estimation methods suggest, and when revealed, would likely warrant moving the issue to the front burner, where there are already so many problems competing for management attention.

Turnover is most often expressed as an expense factor; for example, “It adds this percentage to our costs…” But what is a more dramatic statement of the costs of turnover and a real attention-getter is to express turnover costs as a percentage of profits. When it’s understood just how much of the bottom line turnover chews up, there’s a lot more incentive to address the problem.

If you want to reduce some of the calculation work, or even play around with the numbers, to estimate what your costs might be, we can help you. On our website, one of the tools we offer is a turnover calculator.

Go to http://2oms.com/2011/12/how-much-does-turnover-cost-your-organization/

_________________

For more than forty years, Frank Gump has been helping corporations become more productive and profitable by helping management teams identify and hire top performers and manage them most effectively. Developed and refined through extensive experience in more than 1200 organizations in the United States, Canada, England, and Australia, ADGI’s Organizational Management System (OMS) is a finely calibrated, technologically advanced decision-making process offering the potential for enormous payback. Contact ADGI for more insight and connect with Frank on LinkedIn. Follow ADGI on Twitter @ADGIGroup. Like ADGI on Facebook and follow us on Google+.

 

De-Linking Call Center Performance and Turnover

Originally published on LinkedIn

Call centers, especially outbound sales centers, pose one of the most frustrating recruiting challenges in business today. Many variables account for the high turnover of staff, and not all of them are within your control. In order to tackle the turnover problem more successfully, a smart first step is to distinguish between those problems you can do something about and those you can’t.

Unless your organization is prepared to make wholesale structural changes to the call center role, which is unlikely for most established businesses, the predominant causal factor driving high turnover is the job itself.

What It Means When a Job is Just a Job

Sit down and talk with a group of engineers about why they wanted to get into their field, and you will hear a variety of reasons:

  • It’s a professional job with good career opportunities
  • The pay is good and competition for graduates drives higher pay
  • They want to build things
  • They want to make a greener, more energy-efficient world

The list goes on. When we ask people in both education and healthcare why they wanted their chosen professions, we will hear altruistic motives – the expression of a personal need to care for others and help others, as well as expressed security needs met through either growing demand or tenure. What jobs like these have in common is that they require career forethought along with serious education – careers in these and similar fields don’t just happen.

Now, take time to discuss jobs and motives with a group working in call centers, and it becomes very clear why staffing a call center is like trying to bail out a badly leaking boat with a small bucket. It does not take long to realize that the best you can hope for is simply to keep the craft afloat. Systemic factors make call center jobs inherently unattractive, and there is little that even the most skilled recruitment team can do to address this turnover cause in a sustainable way.

Consider that people do not set out at the start of their working lives with the goal of working in call centers. Those who seek careers need not apply.

Continue reading De-Linking Call Center Performance and Turnover

Everybody Can’t Be a Consultative Salesperson

file8871263244366Sales managers are increasingly rebranding their salespeople as consultative problem solvers, and many managers actually refer to their representatives as consultants rather than salespeople. On the surface, this seems like a good idea. Consultative selling sounds more professional, more prestigious, and more customer focused (to both job incumbents and customers) than do traditional labels, such as transactional selling or features and benefits selling. In particular, recasting sales roles in this way reduces recruitment resistance from Millennials, who, by identifying themselves as problem solvers, believe they are able to dodge the growing stigma their generation attaches to selling.

But bona fide consultative selling occupies only a small corner of the selling universe, and requires a set of personality attributes that are neither very common nor widely dispersed. These people tend to operate at higher levels, where the sales involve more zeros, where access to the buyer is more restricted, and where solutions and products need to be either created or significantly enhanced. We’re talking about the sale of consulting, engineering, and architecture services, marketing services, and some areas of advertising. Additional examples include sophisticated financial solutions, as well as computer networking and communication systems.

In all of these fields, the top performers exhibit strong creative abilities, innovative thinking, a concentrated focus on their goals, the capacity to effectively coalesce varied resources, and the ability to project both confidence and credibility. Once they table their proposals, they strive to close quickly and persistently.

Beware the Hidden Costs of Rebranding Sales Staff

Despite the improved image and motivational advantages associated with relabeling sales roles as consultative selling, several costly consequences more than offset the apparent advantages. As an example, hyping a transactional sales job as consultative can attract candidates who are seeking that which the job cannot possibly deliver.

Most workplace turnover occurs within the initial six months following hiring, and most voluntary turnover is triggered by what we call mismatched expectations. Once a high-potential salesperson with problem-solving and consultative talents understands the true nature and limitations of the job, he or she will waste no time jumping ship. It is very common and also very expensive.

The second issue, the lost opportunity cost, is actually even greater than the replacement costs associated with turnover. These are top-line dollars, those sales that could have been made, but never were. Once new hires make up their mind to leave, they disengage. Their lack of commitment rubs off on all their colleagues, undermining any possibility of building an esprit de corps, which is so fundamental to every highly performing sales organization. People want to be part of a winning team, so when they feel positive about who they work for and who they work with, they have an added competitive incentive to be the best they can be. As the saying goes: Higher water lifts everybody’s boat.

Effective sales management means hiring people who are motivated to do the job and stay in the job. Mismatched expectations, which account for so much turnover, can be, to a large extent, avoided by:

a)    really understanding the type of sales style that works best in your business (given a whole host of considerations, such as your products or services, your marketplace, buyer knowledge and awareness, your marketing strategy and competitive conditions, the nature of the selling process, your selling cycle, and your incentive system, to name just a few)

b)    calling that sales style what it is rather than rebranding it to make the style more palatable; recognize the talents incumbent in that style, and how they contribute to your sales performance

c)      having the assessment tools to differentiate the style that works for you from other selling styles less likely to perform at the same level on a consistent basis

High-performance cultures are fragile. When sales people see a revolving door of new hires constantly coming and going, they understandably become suspect of management, more cynical, and less engaged personally. There you have it: High turnover has the added cost of affecting the performance of the entire sales force. It’s self-defeating to employ initiatives that drive turnover even higher.

__________________________________________________________________________13259f4For more than forty years, Frank Gump has been helping corporations become more productive and profitable by helping management teams identify and hire top performers and manage them most effectively. Developed and refined through extensive experience in more than 1200 organizations in the United States, Canada, England, and Australia, ADGI’s Organizational Management System (OMS) is a finely calibrated, technologically advanced decision-making process offering the potential for enormous payback. Contact ADGI for more insight and connect with Frank on LinkedIn. Follow ADGI on Twitter @ADGIGroup. Like ADGI on Facebook and follow us on Google+.