When a client who doesn’t know us asks us to help them find a sales person, we’ll ask the client what they think they’re looking for.
A typical first response is “I Want to Hire My Competitor’s Top Sales Person.” And it’s often accompanied by, “And I want them to bring me their book of business with them.”
On the surface, this sounds like a perfect formula for creating an outstanding sales team. Find the best available people and bring them on board. Their loyal customers will follow them and revenue will skyrocket. Plus you will have weakened your competitor by taking away a key asset.
However, here is the reality.
If you have really good people working for you, you’ll do anything you can to have them stay with you. Having an employment contract or agreement is one way to document the responsibilities of both employer and employee.
In the case of sales personnel, you want to prevent them from leaving your company and harming your business.
One option is a non-compete clause. This basically says that, when an employee leaves your company, they cannot work for a company that is a competitor of yours. It sounds good in principle but the courts are not upholding these non-compete clauses because they can limit an employee’s ability to find alternate employment.
The preferred option is called a non-solicit clause. This type of clause does not prevent an employee from going to work for one of your competitors but, if he/she does go to a competitor, he/she cannot call on companies that are clients or customers of your company. This type of clause IS enforceable.
To get back to the original response to our question about what a client might be looking for in a sales rep, it IS possible to hire such a person. However, if they have a non-solicit clause in their employment agreement, you cannot have them call on customers they had at their previous employer, let alone bring along a book of business.
Were you to attempt this, one possible outcome is that your competitor could sue your company. Another possibility is that they could sue your new sales rep and restrict his or her ability to approach customers through an injunction. This could render your new hire essentially ineffective while they’re tied up with lawyers.
Another reality is that customers tend to be loyal to reliable vendors, not the vendor’s sales person. Companies have moved from having a single person making buying decisions to having procurement teams to reduce the personal influence a sales person can have on a buyer. Unless a vendor puts a totally inept person in charge of an account, the account will stay with the vendor as long as product quality and service are kept at consistently high levels and pricing is competitive. It actually costs companies money to change vendors – to put the business up for bid, to assess bids, to qualify a new vendor, among other factors – so companies avoid making changes unless it makes economic sense to do so.
Here are three things you should be doing.
1. Protect your sales team. Review your employment agreements with all your sales staff and add in a non-solicit clause to each one. This can make your top performers less attractive to your competitors to hire away.
2. Hire strategically. Hiring a top performer from a competitor can and does make a lot of sense in some instances. But you need to bear in mind that you will have to focus them on markets where they won’t have to call on customers from their previous employer – perhaps in a business development role. Or, if they are senior enough, you might consider assigning them to key accounts who are not customers of the competitor you hired them away from.
3. Consider New Talent Pools. While hiring from within your industry can save on training and capitalize on existing contacts, it may not be your best strategy for improving the overall caliber of your sales team. Industry studies suggest that only about 25% of ALL sales people are rated very good to excellent so, is your industry likely to yield the best quality candidates? Often what happens is that marginal performers make the circuit of employers within an industry, never really contributing much to any given employer.
Excellent sales people are excellent sales people because they have the discipline to consistently follow a process. The process is independent of industry, product or company. Excellent sales people can be taught the technical attributes of a product and the benefits that make each product different from a rival product. Excellent sales people know how to research an industry to find the right companies and contacts. They don’t rely on a Rolodex alone.
Bringing in an excellent sales person from outside the industry has other benefits. They bring fresh thinking, which could lead to new applications for an existing product, better ways of selling the product. They’ll ask insightful questions that could help you become aware of attributes that resonate with customers that perhaps your staff had consistently overlooked or undervalued.
So, hiring from a competitor can be a good move. But don’t expect sales people to have their customers follow them to you.
This is the final post in our series on employee engagement. We hope you’ve found the posts helpful and insightful.
We know Employee Engagement is a hot topic in the business community, and we think it’s more than just a passing fad. There are some fundamental things in the concept of employee engagement that can help you save money and make more of it.
If you’ve been following this series, then you’ll know we posted articles about each of the 12 questions in Gallup’s Q12 employee engagement assessment. That can be overwhelming.
To help make it easier to understand, we created an infographic to help illustrate the relationship between the 12 elements of employee engagement and four key dimensions of business performance.
The vertical axis is composed of the 12 Gallup questions. Gallup organized these into groupings.
Base Camp represented the very basics of employee engagement – providing employees the information and tools to do their jobs.
Camp One was grouped around questions that reflected what employees could give back to their employers.
Camp 2 deals with questions about employees having a sense of belonging.
The Summit is comparable to the peak of Maslov’s hierarchy of needs: self-actualization. In fact, the whole Gallup Q12 has many parallels with Maslov’s model in that it is essentially a spectrum from basic needs (to do the job right) to more emotional or intellectual needs that make the job resonate with the employee.
The horizontal axis is composed of four dimensions that measure success in an organization: Productivity, Profitability, Customer Satisfaction and Employee Turnover.
According to Gallup’s research, Employee turnover is really driven by the first six questions. If you don’t do the basics, you will lose employees. We included question 12 as well, because we feel employees will leave when they no longer see opportunities to grow in an organization. It may be a bit of a gray area, because it may be something beyond the control of the company.
Productivity is influenced by all but 2 of the 12 factors. What seems to be important is having the right tools/technology, recognition, feedback and having a sense of belonging.
Profitability appears to be impacted by management style. When employees have clear direction and feel they have support, perhaps they’re more willing to take calculated risks that positively impact the bottom line. Also, when they have opportunities to grow and develop, they can bring new skills to the organization that can help improve processes and grow profitability. We added in “right tools” because we felt, intuitively, that technology contributes immediately to productivity, but ultimately to productivity.
When employees perceive themselves as treated fairly, Customer Satisfaction is positively affected. Sometimes employees have to go outside procedures to ensure customers are looked after and, when they do so, and feel they will be supported for doing what’s right for the customer, they’ll continue to take those risks. We added “opinions” because we feel it’s an indicator the company is paying more than lip service to employee ideas. This could include input that some company procedures do not support customer satisfaction.
What You Can Do
If you really want to assess the level of engagement among your employees, the Gallup Q12 is a very simple tool to administer. You might want to consider bringing in a consultant to oversee the project and to act as a buffer between employees and management to help ensure employees open up.
What is your management team saying are the main issues in the organization?
Use the dimensions from the Q12 to explore where you might be lacking and where you can implement some changes.
Make a point of regularly getting out of your office to connect with employees and listen to their views. They’ll be more likely to come to you when they see problems and you may find they have some valuable suggestions to offer. Face-to-Face interaction is so much more effective than the traditional suggestion box.
As we said last week, we’ll be compiling all the posts in this series into a White Paper so you can have the entire series in a single document. Watch your email to find out when it will be available. Like all our White Papers, they’re complimentary.
With this post, we’re reaching the end of our series on employee engagement.
As an older job-seeker, I frequently was asked how long I planned to continue working. While I think this was a way to side-step around asking me my age, I usually took it at face value. My answer was that I’d continue to work as long I was learning something.
When I look back at my career, the companies where I stayed the longest were the ones where I was learning new things – and, coincidentally, where I felt I had the most fun.
At one company, it was learning how to compete effectively against a giant like Procter & Gamble. At Lawson Mardon, the corporate culture revolved around the study of management, leadership and strategy. When I worked for Plasmatreat, it was an introduction to nanotechnology and learning about a lot of leading-edge manufacturing processes in dynamic industries such as aerospace and medical devices.
Ironically, when Gallup analyzed the effects of the Q12 on four different dimensions – turnover, productivity, profitability and customer satisfaction – they found that giving employees the opportunity to grow and develop did not correlate with reduced turnover. Instead, they suggest growth opportunities are more strongly correlated with increased company profitability.
In our experience, while it’s true that employees switch companies to escape bad bosses or for higher salaries, it can just as easily be true that the employee has accomplished as much as they can hope to do with that employer and the only way to continue professional development is to move to another company.
One recruiter I know, who works in the CPG sector, moved people routinely from one kind of company to another: from Food to Personal Care products or Household Product; from large companies to smaller ones. To some extent, the moves were induced to help the recruiter earn more fees; from the perspective of the employees, it gave them broader exposure – to different industries, competitors, channels – that would render them more highly marketable. The average tenure in CPG marketing was about 2 years – about the time it takes to go through one complete budget cycle and come away with demonstrable results. I was placed by this recruiter multiple times and I can honestly say I benefitted from the exposure to different industries and corporate cultures.
What You Can Do
One thing you can consider doing is expanding the scope of each employee’s job so they experience new challenges.
Cross-training is one way of doing this, and it helps your organization by enabling employees to be more flexible and versatile so, when someone leaves the company or is on vacation, you have people already trained to fit into the vacant jobs.
This is easier to do in a larger company than a smaller one because there are simply more roles available to move someone into. That’s not to say it’s impossible to do in a smaller company. In small companies, one way to create growth opportunities for employees is to promote them so they can take on more responsibility.
We tend to think of employee development in a managerial context, developing the proverbial mail-room clerk so he/she can become CEO. But not all employees are good at managing people and some simply don’t want to take on that kind of responsibility. For employees who have no desire to enter management ranks, consider developing a “professional” track whereby they can take on increasingly more challenging projects or become subject-matter experts without having any direct reports. It’s a way to recognize their contribution to the company while allowing them to develop their professional skills. We had such a system in place at Esso, where you could find engineers who were experts on highly specialized topics such as fluid dynamics or catalysts.
Encourage your employees to acquire more knowledge. Have a program whereby the company provides some degree of financial support when an employee successfully completes a formal outside course.
Encourage your employees to achieve professional certification in their respective areas. This especially applies to employees on the professional career track.
Next week, we’ll wrap up the series with a summary. We’ll be compiling all the posts in this series into a White Paper so you can have the entire series in a single document.
So far, we’ve learned how to establish a Base Camp for our journey to engagement by ensuring employees have a clear understanding of their job responsibilities and by ensuring they have the resources they need to perform at their best.
The next four questions focus on factors that can really motivate people to perform their best.
The third question in the Q12 is “At work, do I have the opportunity to do what I do best each day?”
Every employee has a unique set of talents and skills they bring to the job. When the talents and skills a person has are aligned with those most valued in a particular occupation or job role, we would expect the employee to perform well and be happy.
Creative people are stifled when they are placed in roles that have highly regulated procedures to follow. Likewise, someone like an accountant might feel lost working in a creative role because it lacks the structure they’ve come to be comfortable with.
Sales people are often characterized as being behind on reports, expenses – paperwork in general. Perhaps, in some cases, it’s because they don’t have strong skills in Excel or WORD to do these tasks efficiently. Assuming they’re great sales people, they are most effective and productive when they are in front of customers. By overloading sales people with burdensome reporting and record-keeping, we are actually preventing or limiting them from doing what they are really good at.
As managers, we need to make the job fit the people occupying the roles so they’re doing what they do best. Ask employees what’s holding them back or making them most frustrated about their jobs and either find a workaround or a way of minimizing the time spent doing tasks they do poorly.
Training people to fit a job role has some limitations. You can train and develop skills but, if the talents required for the role are not there, no amount of training will fix this. If you have to do too much fitting of the people to the job role, it may be a sign you don’t have people with the right talents or the job is not a fit for the people you have. Either way, you have to change something.
Are you training your workforce?
Subsidize it by 66% with Government Grants
In a recent survey of over 800 businesses across Canada (CME Management Issues Survey 2014), 56% stated that they face immediate labour and/or skills shortages. 50% of respondents also noted that their workforce training budget will increase in the next three years. Although many businesses identify the value of workforce training, the financial investment required limits their ability to implement comprehensive training plans. This leads to inefficient workflows, lowered employee satisfaction levels, and increased turnover within businesses, furthering the labour and/or skills shortage issues.
The Canadian federal and provincial governments have partnered to tackle this issue through government funding support. The Canada Job Grant was created to subsidize workforce development training focused on skills development and/or career advancement, covering up to 2/3 of eligible third party training costs.
Is your training eligible for the Canada-Ontario Job Grant?
Launched in 2014, the six-year Canada Job Grant program provides up to 66% of eligible training costs in grant funding to a maximum of $10,000 per trainee. This is a scalable program that businesses can apply for throughout the year for any employees interested in training to support career advancement and skills development. Eligible trainers include third party training programs within Canada provided by a product vendor (such as HIRE GRAY MATTER), university, public college, registered private career college, union based training centre, or school board. Eligible expenses include:
- Tuition or other training fees;
- Textbooks, software, and other required materials;
- Mandatory student fees; and
- Examination fees.
Is your business eligible for the Canada-Ontario Job Grant?
Businesses must apply on behalf of the trainees; trainees can’t apply directly for funding. Eligible businesses must be incorporated and operate within Canada. Owners are not eligible for training subsidies, however upper management without ownership are eligible to take part in training.
Please note that businesses must be approved for the Canada Job Grant before they can commence their training project. Application turnaround time is approximately 1 month. P lease note that training being carried out by Canada Job Grant should lead to as many of the following impacts as possible:
- Promotion of job title;
- Promotion of job role;
- Salary/wage improvements;
- Job creation; and
- Business impacts.
If you plan to train your employees this year with third party support, including training by Hire Gray Matter, please register for the upcoming informational training grant webinar on February 24, 2015 from 11:00-11:45am.
If you are unable to attend on that date, please be sure to check Mentor Works’ Business Funding Workshops and Webinars Page regularly, as they add more time slots and funding topics. You can also contact a Mentor Works Government Funding Expert for more info on training grants or other business funding programs.
Contact Chris by email at firstname.lastname@example.org