Channel_Organization.jpgHiring the wrong person for your sales organization can cost you in more ways than missed quota. Here are four of the biggest problems with making a bad hire.

1. Expensive Rehiring Processes

Replacing the bad hire is one of the most direct costs of solving this problem. It can cost anywhere from $75,000 to $90,000 to replace a telesales worker. Even more significant is the up to $300,000 it costs to replace many traditional sales positions.

These costs include potential severance pay for the exiting employee, as well as the time and expense of recruiting and selecting the new person.

2. Opportunity Costs

When you hire a new rep, it takes weeks or months to ramp that person up to speed. At termination, you lose any momentum gained from training and developing the exiting salesperson. Then, you have a gap of weeks or months where you attempt to replace the position. Finally, you have the ramp up time for the new person. Add those gaps in with lost productivity and you’re missing valuable time moving opportunities into closed deals.

3. Time and Energy Distractions

The time invested is normally calculated as part of the direct and opportunity costs in replacing a bad hire. However, you also need to consider the distractions caused by replacing a bad hire that are harder to quantify monetarily.

As a sales leader, your primary role is coaching your team for improved performance. When you’re constantly managing, you don’t invest as much in coaching and developing the rest of your team. Additionally, the stress and distraction of replacing the bad hire prevents focusing on helping your team achieve goals.

4. Cultural Implications

Another consequence that is hard to quantify is the potential negative cultural influence caused by the bad hire. Here are some of the ways in which the wrong salesperson can impact your team:

  • Distractions – Just as the bad hire distracts you, a rep that doesn’t fit in may encroach on the time of other salespeople who pitch in to help out.
  • Negative Attitude – While attitude isn’t always the cause of a bad fit, it often has an impact. When a new rep doesn’t blend in with the team, it can create tension and a lack of comfort for other reps.
  • Bad Example – Before termination, a low-productivity rep doesn’t do much to help raise the standard and push other reps to perform better.

The monetary and non-monetary consequences of a bad hire can have significant and potentially long-term effects on your organization. Mistakes are possible, but you can minimize hiring risks with talent analytics. Clear data on the traits and abilities needed for a position help you make a more sound decision with the original hire.