We met this morning with a sales manager from one of our clients and had an interesting discussion about turnover. This company is in an “old-line” industry and has an established salesforce. In fact, the newest salesperson has been with the company for more than 5 years. Most have a 10 to 20 year tenure – retention is not a problem since this is a good employer.
The problem is this – their business has had to change over the past year to match the marketplace. There has been no layoffs, but some restructuring and new management has been added. These changes, according to our sales manager, have caused much angst amongst the team.
The team consists of some strong performers, but there is much dead weight. The company has offered sales training and many of the established salespeople have openly resisted. These same salespeople have declining performance.
One significant issue in this culture is the fact that there has been little turnover. 5 years ago they did have some targeted layoffs, but no new blood has been brought into the team. As strange as it sounds, turnover often has some benefits. Much like properly pruning a plant, sales turnover can eliminate the under-performers and bring in stronger, fresher talent.
I’m no fan of the Jack Welch approach to eliminate your bottom 10% of performers every year (especially with the current market). But his approach is not without some merit. Our customer would benefit greatly from the energy that will come from new salespeople taking over old territories.