A statistic from the Career News newsletter (sorry, no link):

One in four U.S. workers is resolving to get a new job this year. The survey found that 26 percent of employed Americans said they will look for a new job in 2008.

I thought that number seemed somewhat low - I was expecting a number closer to 33%.  Retention will always be a top priority for sales managers, but it may be that the slowing economy will cause more workers to stay in their current positions this year.

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BusinessWeek.com offers up the Best Corporate Practices 2008 which is a fascinating slide show if you have time to view it.  This is from the opening of the article:

In fact, much of the gap between the best and worst management practices can be described by that word: trust. At one point as a corporate human resources leader during the dot-com boom, our company switchboard was bombarded with calls from recruiters, seeking to pull away our sharpest technical talent. Our hardworking phone operators did their best to deter search consultants looking to make contact with talent by any means possible, but it wasn’t always easy.

…

We said to our phone operators, “Let the calls through.” We said to our technical folks, “Talk to these guys. Write down everything they say. Learn as much as you can about the jobs they’re recruiting for, the projects our competitors are working on, and the salaries they’re paying. Fill out this form every time you pick a recruiter’s brain, hand us the form, and we’ll pay you $50.” Presto—some of our folks made a bunch of money in a short time, we learned boatloads about the hiring activity around town, and most important, we enrolled our employees in helping the company meet its goals.

Clever.  You know, recruiting is often a cat-and-mouse endeavor that involves multiple moves on multiple levels.  My father likes to say that some people play checkers and others play chess.  This company’s defensive approach was a smart tactic during the tech boom of the late ’90s.

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The Herman Trend Alert offers up an excellent analysis of the most pressing topic of today - retention.  I thought this statement was spot on:

The Hodes 2007 Workplace Study holds that two factors are critical to retaining valued employees. The first is choosing quality people, not settling for “warm bodies”. The second is choosing people who have long-term expectations of staying with the organization.

We encounter companies that have a hire fast, fire fast mentality.  Personally, I think this approach is high risk, low reward and we never condone this approach at Select Metrix. 

The second point is an important one also.  If you are looking at a candidate who is not currently employed, it is of utmost importance to take the extra time to make sure your position is a fit.  There are many salespeople who are in transition and are simply looking for a quick stop, money-grab position.

When employers make inferior quality hires, often they will inadvertently lose current employees who now no longer feel valued.

The study also cites what we have been saying all along—that employee turnover, regardless of industry, is expensive. Some reports even show the estimated cost of a single vacancy for some jobs has been calculated anywhere from $7000 to $12,000 per day. According to statistics from the Bureau of Labor Statistics, the estimated 2007 annual voluntary turnover rate is about 24 percent.

For more about the Hodes 2007 Workplace Study, please visit http://www.hodes.com/publications/retentionstudy.asp. (my editing)

I worked for a high-tech company in a Regional Sales Manager position.  My coworkers were better salespeople than me so I learned much and developed my skills immensely.  Then our boss hired two absolute stiffs to join our group.  They had little skill and were hired for the wrong reasons.  The morale amongst our existing team plummeted soon after as we observed their flamboyant incompetence.

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Every year we find December to be a fertile time for sourcing salespeople.  One of the biggest reasons - the upcoming year’s compensation plan.  More specifically, new commission plans tied to new quotas.  The salespeople receive the new plan and are, well, disgruntled.  Or ticked off.

Good salespeople tend to look outside for new opportunities when their commission plan gets over-adjusted following a strong year.  Let me speak clearly here - I am all for raising the bar, but you do have to take all factors into account before setting the new targets.

ManageSmarter.com offers up this article - Fast Track Your 2008 Sales Compensation Plans - with 10 tips for streamlining your comp plans.  Point number 1 is crucial (emphasis mine):

1. Keep it simple.
A straightforward plan makes it easy for reps to see how they’ll be paid. Don’t confuse and demotivate your reps with plans that try to do too many things. A plan is considered too complex if there are more than three to four performance metrics in the plan, or 10 or more conditions exist to determine credit allocation and payment release. Complex plans are hard to administer and maintain: They make it difficult to set up plans, to generate accurate results, and to timely respond to inquiries and disputes from sales reps. This can cause significant payee satisfaction issues.

I see that rule broken more times than you can count.  I’ve been a sales rep under a complex plan where we had to have multiple meetings at the end of each quarter to reconcile the amount.  My sales manager and I would spend multiple 30 min. meetings going back and forth on our “interpretation” of the plan and the commission owed.

The adverse side effect was the fact that even though I was making very good money, I was frustrated by the quarterly battle I encountered.  I usually felt like I had been slighted even with the sizeable check.  Talk about demotivating.

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Competent managers.  That’s according to a Kenexa Research Institute survey quoted in CareerJournal.com (emphasis mine).

Sixty-two percent of employees who said they have an effective manager also said they planned to stay with their job versus 17% of employees who said their manager is ineffective who plan to stay with their job, according to a survey of 10,000 U.S. workers, plus 1,000 workers each in India, China, Brazil, the U.K. and Germany.

No surprise, really.  When we first encounter a customer with a turnover problem, we start by looking at management.  Typically there is misalignment between the manager and the team or there is misalignment between the position and the current hiring process.

Either way, something is out of alignment.  When this misalignment occurs, turnover becomes the defining symptom.  Gen Y’s eagerness to grow in their roles through job change is only going to exasperate the retention problem.

The cure is strong managers aligned with a complementary sales team.  I know - no small feat.  Yet, through developing your current team and making the proper hiring adjustments, it can be done.

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I enjoy skewering the mainstream media for “talking down the economy” which is a practice they condemned back in 2000.  But all signs point to a slowdown in this red-hot economy which has led the Federal Reserve to target a soft landing.

I’m no economist, but I found this article by John Sumser quite interesting.  His take on the economy is one I have not heard (emphasis mine):

The veterans, burnt by the dot com bust and the post 911 recession will argue that business will contract and layoffs will ensue. That’s the prototypical recession profile. Everywhere you turn, this scenario is forecast or implied.

…

Or, there may be a different scenario.

The people who used loose credit to finance the expansion of their lifestyles may have been unintentional evangelists of a new form of inflation. One way of thinking about the folks who “got in trouble” is that they were wrestling with an unmeasured form of inflation. Because there was no way to engineer the raises required to keep up, the second best source of income was real estate equity. Rather than “large living over spenders”, perhaps these folks were just doing what they thought it took to stay even.

Although the press is beginning to demonize people who financed their lifestyles on second mortgages, the question is “what are they going to do without a funding mechanism?”

I think they’ll be asking for raises and when they don’t get them, they’ll be changing jobs.

Imagine this trend in conjunction with a mass departure of the Baby Boomer generation.  The implications on retention, hiring and wages would be beyond significant.

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We’ve been focusing on retention recently as the present job market has forced this issue.  One point to note is that retention topics show up during the offer stage of hiring new salespeople.  The items the candidate values are often the ones in which they engage the hiring company.

Forbes.com’s How To Keep Your Employees Happy offers this:

Interestingly, throwing money at staffers isn’t always the answer. Neither is throwing a party every few months. Having fun at work and creating a cohesive team is just one element. The most successful companies also realize flexibility, values, career development and providing meaningful experiences are also important elements to minimizing turnover. The interesting thing is that many of the companies that value having a good time usually incorporate those other elements too.

Flexibility has risen to a highly-valued asset - an asset that enters into most offer negotiations nowadays.  Flexibility is the needed component  for reaching a desired work-life balance.

We recently had to virtually rewrite one of our customer’s offers due to a lack of definition regarding flexibility (vacation, telecommuting, etc.).  This factor was part of an undefined offer that cost us a strong candidate.  Companies with flexibility in their culture have a marketable advantage in this tight labor market.

The next step is to advertise the culture of the company. Use those events as a way to recruit talent. “The best thing to do if you’re a company is make it clear what you have to offer,” says Erickson. That way, when a candidate receives two job offers, and everything else is equal, they might go to the company that has a culture similar to theirs.

Hiring strong salespeople often comes down to a slight advantage.

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From the Career News newsletter (sorry, no link-my emphasis):

And a growing number of employees have concluded that the best way to move up is to move around. According to international-employment-matchmaker Randstad’s latest World of Work Survey, more than half of today’s employed are searching the Internet for a better situation; yet most profess to be happy in their current jobs, despite a 41-to-60-hour work week.

A just-released study by the Conference Board confirms that almost three-quarters of job-seekers are pounding virtual pavement. They’re scanning Internet job boards like Monster.com or CareerBuilder.com and networking with friends, acquaintances and friends of acquaintances on sites like Facebook and its business-networking predecessor LinkedIn.

Most job hunters simply scout employer offerings on job sites, but significant percentages also post resumes and register for e-mail alerts of openings. And these aren’t necessarily unhappy campers, insists Harris Interactive, which conducted the Randstad study. “This year, we see the highest workforce morale in three years, mirrored by impressions of improved productivity and less pessimism about the state of the job market,” writes Harris Senior Vice President Deanna Wert. “These workers are looking to cash in on their skills,” adds Wert, “and are more likely to switch jobs than at any time in the past five years.”

Retention will be one of the most important sales management topics of 2008.

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Great quote that is.  Selling Power provided it in their article Re-Recruiting and Retention.  The gist of the article deals with keeping your top performers when they have been recruited from your company.  The article lists some suggested goals you can gather by conducting exit interviews:

- Eliminate the barriers to retention that were mentioned in surveys of ex-employees.
- Identify essential, “can’t operate without” employees and thank each one of them (often).
- Upgrade personal performance contracts, paying special attention to the problem areas identified.
- Provide extra compensation and rewards. (Pacetta suggests establishing a recruiting and retaining fund for this purpose.)
- Ask each of your essential employees to come to you immediately if another firm approaches them.
- Make a personal commitment to keep your essential employees €“ especially when they attempt to leave €“ it will raise the stakes for you as well as put the recruiting company at a disadvantage.

I’m of two minds when it comes to salespeople who give their notice.  First off, they have crossed a bridge from which it is difficult to return.  Normally, the return involves paying the salesperson more money while wondering if they are going to be swayed by the next employment overture.  Expectations are now raised and the sales manager may get an itchy trigger finger when it comes to the salesperson’s performance.

Also, I’m highly skeptical that asking employees to come to you “immediately” if they are approached about another opportunity.  I’ve worked in plenty of companies where a recruiter reached me.  I always listened to what they had to say and never, ever, told my boss about the call.  Maybe it is just me, but I think I am in the majority on this one.

The main point I gather from the above list is that you need to pay attention to your employees.  Communicate with them on a regular basis.  Make sure your compensation plan is inline with the market.  Give them accolades when they deserve them.

Simple, yes, but successful retention is not a grand scheme of epic actions.  Instead, it is a daily commitment to doing the little things right.

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Tight employment markets require a successful hiring processes and strong retention programs.  Companies have to play good defense when it comes to the rainmakers within their sales department.  CareerJournal.com ’s Six Reasons Top Performers Seek Out Greener Pastures lays out a handful of clear pitfalls to avoid in this present market.

First off, number 1 is rudimentary…and, in our experience, the most abused of the list:

They receive few rewards for good behavior. If high performers receive no extra kudos or compensation for their extraordinary performance, they’ll begin to wonder whether it’s worth putting in the extra effort. It’s important to acknowledge those who work to promote the success of the whole company. If you can’t afford to reward them financially, find another way to recognize their contributions.

In sales, you have many different egos.  Part of the sales manager’s job is to sort out the right buttons for each individual.  That is an area in which we help managers.  The most common transgression we see is the sales manager who projects his or her reward pattern on to all of their salespeople.  They assume every is like them and responds to the same rewards.  Big mistake.

They feel underutilized or unchallenged. Because of their need for mastery, high performing employees can get easily frustrated and bored when their roles become too circumscribed or stagnant. The antidote: Feed them a steady diet of challenges.

Monotony drives change for many salespeople.  If they begin to view each day as the same day over and over (remember the movie Groundhog Day?), they will start to look for a new challenge.

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