While some degree of staff turnover is inevitable, high staff turnover can be extremely costly for a business. In fact, according to a report from Oxford Economics, it now costs more than £30,000 , on average, to replace a single employee, due to the costs of recruitment and the lost output while the replacement is brought up to speed.
For this reason, a strong talent management strategy is essential, which is why businesses are increasingly investing time and money into talent management training. Yet, within sales organisations, in particular, turnover remains too high. Here, we take a look at some of the elements you may be missing, which could make a big difference.
The single most effective way to reduce turnover is to get your recruitment process right, so that you hire talented, motivated people. This may mean going beyond the standard office interview and carrying out a more thorough assessment of talent. It may also mean going out and finding talent, rather than waiting for them to come to you.
"Select the right people in the first place through behavior-based testing and competency screening," says Susan M. Heathfield, writing for The Balance . "An on-site interview gives you a feel for whether the person can fit within your culture, but your key to selecting the best employees is to determine how well they can do the job."
By investing in your recruitment process, you can ensure your hires are all good fits, who are less likely to leave.
One particular group of employees that can be considered 'at risk' of leaving are your newest recruits, especially if they fail to adapt to your corporate culture, or struggle to adapt to the new work tasks they are being asked to do. It is, therefore, absolutely vital that money is spent on employee development for new hires.
Nevertheless, research published in the CSO Insights 2016 Sales Enablement Optimization Study shows that average ramp-up times - the time taken to get new recruits up to full competency - have increased considerably over the past decade or so, with 60.7 percent of companies reporting ramp-up times of seven months or more.
Through greater onboarding efforts, organizations can help new starters to bed in more quickly, both professionally and socially, which will improve morale and reduce their likelihood of wanting to leave.
Another essential talent management element involves recognising and rewarding good performance and providing opportunities for top performers to advance their careers. This means investing sufficiently in your employee development efforts, but also requires managers placing more faith in internal solutions to vacancies.
"Retaining the best talent means letting them grow," Albert McKeon writes for Spark . "Including them in a strong organizational culture, letting them participate in their own continuous performance management assessments, offering useful training and career development opportunities and giving them a clear path to advance."
If employees feel stifled by their employer, or if they are repeatedly overlooked for promotion, they will start to look elsewhere to fulfill their full potential and achieve their ambitions.
Although employees are motivated to stay in their role by many different things, from advancing their careers, to a genuine belief in the work they are doing every day, businesses need to be realistic. For the majority of workers, one of the most important motivations for turning up to the office is financial compensation.
Clearly, for most organisations, throwing money at a staff turnover problem is not sustainable. However, it is essential that companies regularly review their pay structure, look at what competitors are paying and adjust their offering to at least match the going industry rate.
Moreover, even where pay cannot be increased, other employee benefits or perks may be able to sweeten the deal.
Finally, it is important that organisations invest sufficiently in training their sales managers and department heads, as these leaders can have a huge impact on staff turnover. Indeed, a survey from Gallup found that around half of adults have left a job to get away from their manager, suggesting improvement in this area can help significantly.
Despite this, research from CSO Insights shows that many managers are neglected when it comes to training. In the company's 2017 Sales Manager Enablement Report, it was found that 18.8 percent of companies offer no training to sales managers. This makes them over three times more likely than salespeople to receive no training.
Ultimately, underinvestment in sales management and talent management training will result in unskilled or less competent managers, who are more likely to be the reason why employees leave an organisation.
Monika Götzmann is the EMEA Marketing Director of Miller Heiman Group, a global employee development and sales training firm, providing sales and customer service training solutions.