Every week more numbers come out to reveal another level of ugliness in this economy.  Today comes this article from CNNMoney.com.  The state that speaks volumes:

Every state had an unemployment rate in October that was higher than a year ago, and every state has lost jobs over the course of the year.

The recovery from this recession is going to take a long time as the hole keeps getting deeper.  I think it is safe to say that the unemployment rate is higher then what is being reported:

Unemployment rates, which are taken from a separate survey, tend to rise even as the employers start hiring again, because the survey only counts people who are looking for work. When times are bad, many people become discouraged and give up their job search, so they are not counted in the unemployment data.

We’ve seen this first-hand in our business as one of our customers simply stopped their salesperson search and decided to hunker down until the economy turns.  I certainly understand the approach as long as your competitors are taking the same approach.  If one of them is well-funded, they may realize that this is an opportune time to grab some market share.

I’ll close with a ridiculous headline from the same site:  Is TARP bailout helping the economy?

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Everything is so serious these days that it is nice to find some levity.  This is good – a company recently tracked aspects of 75,000 tech support calls.  They have some gender-related data (emphasis mine):

Male callers: 64% didn’t bother to read the instruction manual before calling for help.

Female callers: 24% didn’t bother to read the instruction manual before calling for help.

Male callers: 12% just needed to plug in their gear to “resolve their issue”.

Female callers: 7% ditto!

Female callers stayed on the phone with tech support 32% longer than male callers.

66% of tech support operators said they preferred dealing with female clients, anyway.

So according to the first point, 36% of guys did read the instructions?  I am embarrassed that so many did.  Time to check their man cards.

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Isn’t that the truth?  Here are some sobering points from a CNNMoney.com article:

Businesses with fewer than 50 employees cut another 75,000 workers in October, according to estimates released Wednesday from payroll processor ADP.

…

A telephone survey of 830 small business owners conducted by management consulting firm George S. May International from Oct. 28-30 found that 74% of the owners polled do not plan to increase their staff headcount in the next 90 days.

It has been our experience that sales hiring typically slows down during the holiday season, but companies often discuss their Q1 hiring plans with the intention of a fast start to the new year.  Unfortunately we simply aren’t hearing that talk this year.

The article provides insight into the small business world today (my bold):

After three years of growth, sales at small companies — those with annual revenue of less than $10 million — have declined by nearly 4% this year, according to a recent analysis by Sageworks, which tracks financial data at privately held companies.

There is one type of company that continues to hire – aggressive companies set to grab market share.  We are still working with them in assessing sales candidates at a reduced, but steady rate.

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Here is a job title of a job posting I read this morning on one of the 2 large boards:

SECRET CASH LOOPHOLE

Here is the opening line of the ad:

EARN AN EXTRA $1,000 a Week Working Less Than an Hour a Day, or $500 a Day Working 2-3 Hours a Day.

As an aside, it is a good policy to be highly suspicious of any position that leads with your ability to earn more doing less.  Perhaps couch potatoes are their top prospects.

I realize in a recession with extremely high unemployment that these types of positions materialize.  However, the two big boards are being overrun by these ridiculous ads.  It hasn’t taken long for these ads to swell up to 25-35% of the sales ads for any given day.

Clearly the job boards are trying to survive this economy, too, so I understand their desire for revenue.  However, the quality, and usefulness, of the two big boards is falling precipitously as these types of ads become a higher percentage of the listings.

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From a CNNMoney.com article this morning (emphasis mine):

Private sector employment fell more than expected in September, but the pace of job losses continued to slow, according to a report released Wednesday.

Automatic Data Processing, a payroll-processing firm, said private-sector employers cut 254,000 jobs in September, down from a revised 277,000 in August. It was the smallest monthly total since July 2008.

The decline was greater than the 200,000 loss economists surveyed by Briefing.com had forecast. But the difference was “not statistically meaningful,” according to Joel Prakken, an ADP spokesman and chairman of Macroeconomic Advisers, LLC.

“Not statistically meaningful” – tell that to the 54,000 people who lost their job this month.  Safe to say 10% unemployment is only a couple months away.

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I’m back from a needed break in this sour economy.  Everywhere I go I ask people about their business.  It is fairly consistent – something from “could be better” to “really down.”

That economic context allows some freedom for hiring companies to incorporate what I call contextual hiring techniques.  These are typically techniques that take longer to measure and allow the hiring company to see the salesperson in action.

Some examples:

Job Shadowing – just as it sounds, the candidate spends time with an existing sales rep to get an understanding of the position.  Peggy McKee at Medical Sales Recruiter has a post on this topic.  A friend of mine recently did this for a sales position that provided him the opportunity to ask many questions that would be difficult to ask in a formal interview.

I am a fan of this approach especially if the job market is slow.  It can be difficult if the market is hot and candidates have many opportunities.  However, this approach is a strong qualifier for the candidate’s interest.

The one caveat here is to pick the right salesperson for the candidate to shadow.  My friend learned many topics about the hiring company from the sales rep.  The topics that the rep offered up were too much of “inside baseball” to be sharing with a good candidate.

Trial Periods – yes, every position is technically a trial for the first 90 days.  What I’m talking about involves is a 30 – 60 day trial for observing a new salesperson.  Again, I’m a fan of this approach in this type of economy.

The main topics that can be ascertained in this time period is the candidate’s fit to your culture, his or her approach to the job and his or her interaction with you the boss.  Unless you have a short sales cycle, you won’t be able to observe them through the entire sales cycle.  You will have to monitor/observe their activity and extrapolate from that data.

It is a short window, but combining pre-hire assessments with a day of job shadowing and a trial period and you will have an in-depth understanding of your newly hired salesperson.

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I’ve come across two different instances of a nefarious sales trick that is reviving itself in the telecommuting era.  Two different customers recently shared accounts of salespeople who were on their payroll and the payroll of another company.  This stickler is that they were allegedly full-time employees for both companies.

In one instance, the salesperson was on the West coast while headquarters was back in the East.  This guy set up a small office in an office building and had a slider sign on the door.  He would simply slide it to reveal the company he was representing that day for that appointment.  He also had a company car from both companies.

Outside of the healthy paychecks, it appears this guy was submitting expenses to both companies also.  Double reimbursement!  What a snake.

The other customer has a woman who works for them on a part-time basis which worked out well for them.  Unfortunately, another company was paying her full-time as she was working at home for them.  She would be at the part-time job in for half of the day while she was “on the clock” for the other company.  True double-dippin’.  In the end it evened out as the full-time employer found her work lacking (imagine that) and ended up letting her go.

Workers of this integrity are the ones who make managers uncomfortable with telecommuting.  There is no denying the telecommuting trend, but hiring the right salesperson with the right aptitudes and responsibility is crucial to success.

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The Herman Trend Alert’s topic this week is the future of social networking.  An excerpt for you (my bolding):

“Social networking is in its infancy”, says David Nour, Relationship Economics CEO and Web 2.0 guru. “We’re on the upward swing of the hype cycle”. Lots of people are discovering the power of Social Networking and investing their time and energy to make it work for them.

“The real power and promise of Social Networking is a mass collaboration platform, accelerating one’s ability to get things done”, adds Nour. Enlightened individuals are shifting from “not invented here” to “invented everywhere.” It gives us the opportunity to extend our reach beyond any geographic, functional roles, or even industry sectors to learn and grow from others.

That bolded point is an excellent one, is it not?  I have found myself conversing with people from industries I would never have expected.  That is one truth about sales – the fundamentals of it are consistent across industries.  You wouldn’t suspect that truth by looking at sales employment ads which is disappointing.

Sales always comes down to prospecting, qualifying and closing.  The challenges of this work is surprisingly consistent in product sales, service sales, distribution sales, OEM sales…the fundamentals are the same.  This fact is why it is important to measure a sales candidate’s skills and talents with as much, or more, weight than their previous experience.

A relatively new aspect of sales hiring will be an understanding of a candidate’s network.  More sales are moving to this channel and candidates who bring an expansive social network will have an inherent leg up on less-connected candidates.

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Call me an optimist, but it is always of interest to see where “experts” believe the recovery will begin.  This information comes from the Herman Trend Alert and seems to make simple sense to me:

When considering where the new jobs will come from, remember that there are two kinds of small businesses: those without employees (or non-employer businesses), and those with paid employees (or employer businesses). The US Small Business Office of Advocacy estimates that in 2008 there were 23.1 million non-employer and 6.1 million employer businesses.

When the economy struggles, the number of non-employers tends to increase at higher rates, while the number of employer businesses stagnates or declines. Going into business for themselves (becoming non-employers) has been a lifesaver for an additional 1.7 million individuals and their families.

However since most of these non-employers work only part time, we are most interested in employer firms. In the aftermath of the 1991 downturn, firms with 20-499 employees led employment expansion, while the smaller- and larger-size businesses struggled. During the 2001 downturn, larger firms (500 or more employees) experienced the greatest net employment losses, followed by firms with 20-499 employees. The smallest firms, with fewer than 20 employees, weathered that storm better than the others.

Expect small- and medium-size businesses and the services that support them to lead the economic recovery worldwide.

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The Herman Trend Alert newsletter (sorry, no link) provides some interesting statistics from a Cisco survey:

Now the international technology giant Cisco Systems has just released a study of its own organization demonstrating these benefits and more. Using telecommuting, Cisco estimates annual savings of USD $277 Million. In its in-depth “Teleworker Survey” of almost 2,000 company employees, the company evaluated the social, economic, and environmental impacts associated with telecommuting.

The study found that telecommuting significantly increased employee productivity, work-life flexibility, and job satisfaction. In addition, the report cited that “a majority of respondents experienced a significant increase in work-life flexibility, productivity, and overall satisfaction as a result of their ability to work remotely”.

The productivity gains were impressive. Approximately 69 percent of the employees surveyed cited higher productivity when working remotely, and 75 percent said the timeliness of their work improved. Sixty-seven percent reported work quality improvement. Telecommuting can also lead to better employee retention; more than 91 percent of participants said telecommuting was somewhat or very important to their overall satisfaction and 80 percent believed they enjoyed an improved quality of life.

Couple things here – the study does appear to be self-reporting – “…of the employees surveyed cited….”  This type of reporting is always a bit of a concern.  It would be more helpful if there was a technique for putting an objective metric to their productivity.

Second, the value of telecommuting in a candidate’s eyes is noteworthy.  91% said it is very important to their overall satisfaction.  When it comes to hiring salespeople, this is a crucial fact to keep at the top of your mind when designing a compensation plan.

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