This blog will help you understand what, until you stop this from happening, the effects will be on your business and then provides some advice on how to stop it.
Regardless of whether it’s your decision to fire an employee or their choice to fire you as an employer, saying goodbye to one of the team is going to set you back in the short term and, if you don’t have a plan in place, short term is going to become long term which may well then just become the way things are.
The primary impact to your business will be financial. Market studies show that it costs a business an average of £15,000 to replace an employee with a £25,000 annual salary. To be clear, that £15,000 is additional to the cost of the remuneration for the replacement employee (that’s if you do hire a replacement). If the salesperson who has left was the primary contact for a base of clients, you are most likely going to see a downturn in sales whilst a replacement is found, and new relationships are forged. During this time, there’s a huge risk that your competitors will strengthen their relationships with your clients which could push you aside…. forever.
If the salesperson had access to confidential company and client information, there’s a significant risk, regardless of the clauses in your employee contracts, of this information being used against your business especially if the ex-employees next role is with a competitor. If this is the case it can cause damage to your reputation in the market especially if the salesperson is a top performer with a decent reputation of their own in the industry.
To summarise, these are the negative impacts your business will face when one or more salespeople leave your employment:
- Your business will lose money in the short term and potentially longer-term too
- The risk of losing clients grows
- Your business’ reputation in the industry might be affected
- Morale amongst remaining staff might drop and the risk of others leaving may increase*
- Financial supporters might start to ask difficult questions which could lead to their backing being pulled
- Pressure levels rise as you work towards replacing their roles. This will also take focus and attention away from other key business needs
- If your business doesn’t have a mature culture for using a CRM system, you will most likely lose all key information about your clients
As the leader, you might understandably believe it’s a positive to have fired an under-performing salesperson (especially if they were toxic too) and of course, it is BUT it still won’t stop the doubts about your ability to hire the right people and/or support them as necessary so that they deliver the required results. The biggest threat to your business though is when a top-performing salesperson wants to leave as everyone in business knows, top-performers don’t leave a place where they’re well paid, respected and left alone to do their job. When top-performers leave, it becomes very hard to attract others without paying over the odds to compensate them for making a ‘risky’ move in their career.
Ultimately, your business needs to do everything it can to ensure it recruits the right staff and creates an environment for each that consistently develops them, challenges them, incentivises them and rewards them appropriately. In conjunction with this, your business also needs to make sure that business continuity is assured in the event of staff moving on.
Here are the key points to help reduce the risk to your business of sales staff leaving:
- Review your recruitment process & plan for onboarding new staff
- Review (or introduce) a bespoke training plan for each salesperson
- Review remuneration and incentive packages. Take your time with this as, once introduced, it’s key to not change them unless absolutely unavoidable
- Set SMART targets
- Appoint a capable leader who can be solely focused on leading the sales team. One key function of this role is for the leader to build relationships with as many key contacts as possible within as many clients as possible
- Introduce a ‘buddy’ system in the sales team so that each customer has at least two contacts if not more
- Make using a CRM mandatory
- Resolve staff issues immediately before they fester into something else much harder to resolve
- Review what information sales staff have access to and restrict access to everything that isn’t necessary for their job
I’ve been in this very difficult and stressful situation before with the major episode being when I had six out of a team of 14 walk out in one day. Whilst I was obviously at fault as their leader, I also know that other factors outside of my control played a significant factor in this. Regardless, it was extremely challenging to work through, but we did, and we all learnt a huge amount during those dark days leading me to write this blog so I can help you avoid going through the same!
If you’re reading this and it’s resonating then, as you’re obviously on the website, it won’t be difficult for you to contact me to open a conversation.
*The caveat here is that if the person or people who have left were responsible for a toxic work environment, the effect is likely to be the exact opposite when they leave – morale will be greatly improved, and staff should feel more inclined to stay.
