In-house recruiting, from search to hire, on average costs around $4,200, according to SHRM. If an H.R. Professionals plan to pay the new hire a salary of $100,000 per year, then it will cost you 4.2% of the first-year salary in recruiting costs.
If that was it, then that would be great, however chances it will not be the end of it.
Pressure To Hire Quickly:
What if your company has a territory that normally produces $1.2 million in revenue annually ($100,000 per month), then a vacancy over two months will cost $200,000 in lost sales.
To fill the void the company might decide to redeploy someone in the company (that person might be able to sell). Although an easy decision, it might be a huge risk. Besides, this strategy might take them from the important work they were hired to do.
Consequences:
What if after the recruiting process has concluded, the company ended up hiring the wrong person for the job. After 90 days it should be obviously clear.
Further, what if the company decided to keep them, rather than go through the process again. Many would believe that person can be trained or molded to become a great salesperson.
Just to illustrate a point, let’s say that over the next 12 months, you find the new hire only sold 95% of the previous year’s productivity. Despite the money spent on training sessions, work with, and mentoring, you lose another $120,000 in lost sales (a total of $124,200).
We have not factored into the total cost of mentoring (labor cost of management or consultant fees) and extra training being used to “train or mold” the person.
Results:
Including the first-year salary, not including benefits and taxes, so far it costs $324,200 (THREE TIMES ORIGINAL PLANNED SALARY OF $100,000). But there is more to consider. What if the person leaves and now you have to start all over.
Question: Will your customers remain patient? Will your competitors see an opportunity to exploit the situation? Will the rest of your sales team survive its impact on morale?
Conclusion:
You need to outsource the task of finding top sales pros. They say “it takes one to know one”, which may be true in recruiting Sales Pros. Salespeople have excellent interview skills so they know how to answer almost any question you ask them during the interview.
