Ways to enhance performance and increase sales
By Craig Johnson
From its inception, the staffing industry has been driven by sales. How to sell harder and better than one’s competitors has kept many industry professionals up at night. Today, we are proud to present results of a survey to help our readers with their sales force management. From selecting salespeople to approaching customers, the “2012 Staffing Industry Sales Force Effectiveness Survey” sponsored by Monster and conducted by Staffing Industry Analysts in conjunction with Towers Watson, a consulting company, highlights a few techniques employed by high-growth staffing firms.
The report is based on a survey taken among staffing industry executives across different segments.
High performing staﬃng ﬁrms taking part in the survey were deﬁned as those with revenue growth of more than 25 percent over the past three years. Here are the sales practices that helped set them apart from low-growth ﬁrms, which reported revenue growth of less than or equal to 3 percent over three years.
- Actively use cold calling to generate sales leads.
- Pay for performance: Top performers get the most incentive compensation.
- Hire sales talent right out of school.
- Make eﬀective use of customer relationship management (CRM) software to manage the pipeline of sales opportunities.
- Identify skills and behaviors most needed for sales success and develop recruitment, selection and performance management practices based around them.
Here’s a deeper look at those techniques:
It was a bit counterintuitive to ﬁnd cold calling on the list of eﬀective sales practices of fast-growing staﬃng ﬁrms. Some consider cold calling old school.
However, 54 percent of high-growth “cold calling of potential clients by salespeople” ranked as one of their most important sources of sales leads. In comparison, 33 percent of low-growth staffing firms said the same.
“Cold calling is an appropriate tactic for acquiring new business when the customers’ buying process is transactional,” says J. Mark Davis, a senior consultant at Towers Watson who worked on the survey. “In that context, it was a fact that a lot more of the high-growth firms cited cold calling as the No. 1 source of sales leads.”
Further, “I think what it shows is simply a penchant for being more proactive on the part of the sales force in terms of making something happen instead of waiting for the phone to ring,” he says.
Pay for Performance
When it came to rewarding top performers, high-growth staﬃng ﬁrms felt they did a better job than low-growth ﬁrms.
The survey found that 51 percent of high-growth staﬃng ﬁrms thought they had “signiﬁcant strength” with alignment between pay and performance. In comparison, only 37 percent of low-growth ﬁrms did.
“Aligning pay with performance generally implies not only paying incentive compensation for the right behaviors and results, but also that the best performers earn the most pay,” according to the study.
Davis says that in organizations where the selling role is fairly prominent, top performing salespeople can earn two to three times the amount of incentive pay over an average performing salesperson.
Most people get into sales, at least in part, because the deal with the company is diﬀerent from other types of employees, Davis says. More of a salesperson’s pay is at risk, but the upside is the possibility of greater reward.
Paying top performers signiﬁcantly more is important because the potential for higher pay helps attract top performers to an organization and it helps ﬁrms retain the top performers they already have, Davis says.
Also, 18 percent of high-growth staﬃng ﬁrms responded “we tend to hire salespeople with little experience/ directly from school” when asked from which industry they tended to hire the majority of their salespeople. That compares with 8 percent of low-growth ﬁrms that did the same.
Davis says it could be that fast-growing companies are interested in really training somebody in their way of selling and their culture rather than bringing in more experienced people from elsewhere who may have more deﬁned expectations about how things should be done.
Low-growth ﬁrms were more apt to hire from industries that employ the people they place, with 18 percent saying so, compared with only 6 percent of high-growth ﬁrms.
And 35 percent of low-growth ﬁrms hired from within the staﬃng industry, compared with 22 percent of high-growth firms.
When asked which best describes their company’s use of CRM software high-growth staﬃng ﬁrms also felt they did a better job than low-growth ﬁrms.
Thirty-three percent of high-growth staﬃng ﬁrms reported “we use purchased CRM software and utilize it eﬀectively,” compared with 18 percent of low-growth ﬁrms.
In fact, low-growth ﬁrms were more likely to not use a CRM at all at 22 percent compared with 12 percent of high-growth ﬁrms.
Skills and Behaviors
High-growth ﬁrms also identiﬁed themselves as doing well on competency-based candidate selection for sales employees. Twenty-two percent of high-growth ﬁrms cited it as a “signiﬁcant strength” compared with only 11 percent of low-growth ﬁrms.
Of low-growth ﬁrms, 48 percent described themselves as only “adequate” as far as a competency-based candidate selection process compared with 31 percent of high-growth ﬁrms that says the same.
“Competencies deﬁne the skills and behaviors required for success in a given role; having them well-deﬁned tends to improve the eﬀectiveness of the recruitment and selection process,” according to the report.
Follow the Growth
Overall, for those following the growth, the survey found that high-growth staﬃng ﬁrms are meaningfully better at acquiring the best talent by using competency-based selection criteria, diﬀerentiating on the basis of performance, using cold calls, more eﬀectively using CRM, were more likely to use behavioral based interviews to identify sales talent and less likely to hire right out of school instead of from within the staﬃng industry.
“High-growth companies in the industry really focus on selecting the best talent and rewarding them well,” according to the report.
And the time may be right to follow their strategies.
The survey also compared ﬁrms by size and by segment served. Staﬃng Industry Analysts’ corporate members can download the full report by going to www.staﬃngindustry.com.
Craig Johnson is managing editor, staffing publications, at Staffing Industry Analysts. He can be reached at firstname.lastname@example.org.
The survey took place from Jan. 18, 2012, through Feb. 6, 2012. Of the 423 respondents, 393 reported the growth rate of their firms. It was conducted online with phone-based interviews supplementing the responses.
Senior executives comprised the majority of respondents. Eighty-one percent of respondents were in CEO, chairman, president or chief operating officer roles.
Thirty-two percent of the respondents came from industrial/logistics staffing firms, the highest percentage. Thirteen percent were office/clerical firms, 12 percent were information technology staffing firms and 10 percent were healthcare staffing firms. The rest came from other segments or left the question on segments blank.
The number of salespeople employed by firms in the survey ranged from 2,000 to one, but the median number of salespeople was three. Approximately 75 percent of respondents reported having five or fewer full-time salespeople. In the survey, 375 respondents reported the size of their sales forces.