Your sales team plays an essential role in driving revenue and reaching goals that stretch across the organization. Your seasoned, super-star reps lead the way. If any of your top salespeople leave your company, you may fall behind.
So should you be worried about churn in your sales department? In short, yes.
Sales teams have higher-than-average turnover rates than other business units. Below, we’ll explore the factors that lead salespeople to quit, the sales landscape in 2023, and how you can retain top talent. Let’s dive in.
Table of Contents
- Are salespeople leaving or staying at their jobs?
- Why do sales teams experience high turnover?
- How to Minimize Churn in 2023
Are salespeople leaving or staying at their jobs?
Turnover hovered around 35% per year for salespeople in 2021 and 2022. HubSpot research confirmed this 35% churn rate. Put another way, around one-third of your salespeople will leave your organization in the upcoming year.
Considering that the ideal churn rate for an organization’s employees is around 10%, turnover for salespeople reaches far beyond the average.
Despite an uncertain economy ahead, recruiters forecast that the market will remain favorable to candidates.
One LinkedIn study found that 64% of recruiting professionals believe that the job search will be more favorable to candidates (as opposed to employers) over the next five years. If the trend holds, you may find yourself in a lurch when your best representatives leave.
Sales representatives may seek out new opportunities that include better pay, more benefits, less stress, or greater flexibility. Next, let’s explore some of the biggest drivers of turnover.
Why do sales teams experience high turnover?
Inevitably, some of your sales reps will get poached or leave for a new gig. However, successful leaders create an environment where talent wants to stay. However, before you start brainstorming, it’s essential to know why sales talent quit. We’ll explore this topic below.
1. Lack of Compensation
For starters, many salespeople report a lack of compensation as one of the top reasons they leave their employers.
Dooly’s Sales Happiness Index found that 51% of salespeople would be willing to leave their position for higher pay. Of respondents, 31% cited a lack of bonuses as a driving factor in their desire to churn.
This is especially true for sales representatives who are paid on a commission-only basis. Declining sales opportunities may mean that many salespeople will jump ship for employers that offer a base salary.
Remember, many people get into sales specifically because of the potential for high earnings. If an organization doesn’t align with these expectations, the company will bleed salespeople more regularly than employees in other departments.
2. Toxic Cultures
When examining turnover rates, you have to consider workplace culture. Employees who label your workplace “toxic” will likely leave in droves. So what exactly does a toxic culture look like?
Donald Sull, a senior lecturer at MIT Sloan, defines toxic work environments as “disrespectful, non-inclusive, unethical, cut-throat, and abusive.”
If your workplace falls in this category, that’s bad news. MIT research found a toxic culture was 10.4 times more likely to contribute to attrition than compensation. Workplace toxicity can wreak havoc on salespeople’s performance, leading them to seek a healthier work environment.
When examining workplace culture, focus on your sales department specifically. At times, companies may have a high eNPS score organization-wide but face shortcomings in certain departments.
If your sales organization alone is struggling, focused employee surveys can root out challenges.
3. “Grind and Burn” Mentality
Many salespeople get into the industry with a grind-and-burn mindset. They intend to work themselves to the bone to make money as quickly as possible. In doing so, they deplete their energy and quit shortly after joining a new company.
Many companies reinforce this mindset by requiring salespeople to meet impossible targets. It’s okay to push to meet deadlines, but salespeople who commit to the grind-and-burn mentality 24/7 will likely leave the industry before the year is out.
In 2022, Gartner found that 89% of sellers felt burned out from work. This high rate of burnout is reflected in intended attrition. Over half of respondents said they were actively looking for a new job.
Gartner uses the term “drag” to describe burned-out sales reps' mentality. “70% of sellers who report high levels of drag are actively looking for a new job, compared to only 7% of low-drag sellers,” said Alice Walmesley, director of advisory in the Gartner for sales leaders practice.
To prevent drag, consider reinforcing more positive workplace habits for the sales staff at your business. Doing this may help your reps avoid burnout or taking on too many clients in too short a timeframe.
4. No Room for Growth
Many employees want to feel like they are constantly progressing up a corporate ladder. However, many salespeople don’t feel like they have any career growth path available to them.
Ninety-four percent of surveyed employees said they would stay at a company longer if the business invested in their careers. Brands that fail to do so will see attrition rise.
To minimize turnover, consider offering promotion incentives to the top-performing salespeople at your business. That way, salespeople who put in the extra time and effort can feel rewarded professionally.
Remember, employees who see opportunities to learn and grow are 2.9 times more likely to be engaged. If you can’t offer your top performers promotions, look for ways to grow their skill set and offer personalized development opportunities.
5. Lack of Understanding from Leadership
In a poll conducted by Gartner, 59% percent of sellers said their leadership doesn't understand how to motivate them. Gartner also found that 67% of sales professionals believe leadership is overly optimistic and disconnected from seller reality.
Business executives who set unrealistic goals for their salespeople won’t actually make record profits. They will just have to hire new salespeople when current sales reps leave.
Brand quality starts from the top, so ensure your leadership knows how to treat your salespeople correctly and fairly. Start by showing gratitude for your sales team. Seventy-nine percent of people who quit their jobs cite a lack of appreciation as a major reason for leaving.
How to Minimize Churn in 2023
Reducing attrition in your sales organization involves closely examining your culture. Why do employees like working for your team? How can you change the challenges driving them away?
Your exact course of action will be unique to your organization. However, these guidelines can help spark your thinking.
After brainstorming, create a retention plan that turns your ideas into long-standing initiatives. You can then track how your efforts have impacted turnover as time goes on.
1. Set reasonable expectations.
If you’re looking to minimize churn, start with your sales goals. HubSpot research found that 16% of salespeople believe that unrealistic quotas contribute to turnover in sales.
Make sure that the quotas you’ve set are attainable and adapt as the sales landscape changes. Unrealistic expectations lead to mistrust in management, allowing resentment to grow.
In one Dooly poll of salespeople, 8 in 10 respondents said that management doesn’t understand how time-consuming non-revenue-generating activities (like research, answering emails, and internal meetings) can be.
Further, 78% said this lack of understanding from management leads to misalignment between expectations and what sellers can achieve.
Survey your sales representatives about your current quotas. Do they find your targets reasonable? Are their non-selling activities accounted for? Based on survey data and your business needs, you can tweak your goals.
2. Reevaluate your benefits.
In its 2022 Sales Happiness Index, Dooly found that 6 in 10 sales professionals would be motivated to leave their company for better benefits. If you see attrition creep up, take the time to reevaluate your offerings.
Remember, benefits stretch beyond just compensation and health insurance. Flexible paid time off, wellness perks, fitness reimbursement, and comprehensive family-planning benefits can all help retain employees.
When asked about which benefits mattered most to employees, 35% of employees cited paid leave; this is the third consecutive year that PTO topped the list. Benefits provider Unum also found that healthy lifestyle incentives (19%), professional development (17%), and student loan repayment benefits (9%) were popular among employees.
A 2022 survey from TalentLMS found financial wellness benefits are also growing in popularity. Of employees, 68% said they are more likely to stay longer at their current job if their employer offers financial wellness benefits.
"This new data reveals how important financial wellness is to today's employees, especially with the financial challenges we are all facing," said Kris Alban, executive vice president at Enrich. "Because of this, employers have a unique opportunity to attract and retain employees by offering financial wellness benefits and education."
Consider hosting seminars on how to achieve a healthy work-life balance or how employees can manage their finances, including choosing the right bank account for their needs. You’ll show your reps you care while providing popular employee benefits.
3. Offer professional development opportunities.
In 2022, 65% of employees said professional development benefits were important to offer.
Start with sales coaching. Scaling sales coaching was the number one priority among sales teams, according to 2021 research from Revenue.io. However, most reps get less than one hour of coaching per week.
Coaching your reps can help them reach quota and find greater satisfaction in their roles. It’s a win-win. Beyond coaching, consider offering online courses for your team, skill-building workshops, leadership trainings, and education reimbursement.
For top performers, consider how they can grow at your organization. You can move them into a managerial position, give them a new title, or put them in charge of a new project.
Upward mobility shows your employees that they have a future with their organization. At the two-year mark, employees that have made an internal move have a greater chance of staying at their company, according to LinkedIn. Seventy-five percent are likely to stick around.
4. Leverage tools that save your team time.
Empower your team with the right tech stack. Otherwise, you’ll see two-week notices rise. Dooly found that 33% of those who wanted to quit cited a lack of access to the technology needed to be successful.
Keep in mind, sales professionals only spend about a quarter of their time actually selling. According to LinkedIn
- 19% of their time is spent updating a CRM.
- 18% of their time is spent in internal meetings.
- And 19% are spent on administrative tasks, like email.
Your team wants to spend less time on non-revenue generating tasks and more time selling. Of surveyed sellers, 85% said that the time spent on non-revenue-generating activities makes it harder for them to maximize their earning potential.
Find the right tech to automate tedious tasks so your reps can get back to closing deals.
5. Create a flexible work environment.
Since the start of the COVID-19 pandemic, LinkedIn found two lasting priority shifts: the importance of work-life balance and flexible work.
A 2022 survey found 52% of sellers want to work remotely 50% of the time or more. If you’re trying to drag your reps back to the office five days a week, you may see an increase in attrition.
Even as more jobs mandate some degree of in-person work, there are still remote roles that can entice employees. LinkedIn found that the number of remote sales jobs increased by 300% in both the United States and Canada from December 2021 to February 2022 compared with the same period a year earlier.
Find ways to embrace hybrid work. That can include a work-from-anywhere policy, flexible work-from-home days, or in some cases, completely remote roles.
6. Focus on your culture.
At the end of the day, employee happiness is tied to your culture. When surveyed about the top reasons for turnover, sales professionals reported stress, burnout, and lack of work-life balance as the top three factors.
You must create a welcoming, empathetic, and inclusive environment if you want your best employees to stick around.
“What happens when you work for an employer that celebrates your diversity, empowers you to take ownership, and promotes values that align with your own? You are inspired to do your best work, you grow phenomenally, you deliver spectacular results,” says Radwa Khorshid, a senior manager at HubSpot.
So what makes a stellar sales culture? HubSpot research breaks found healthy cultures need the following three elements:
- Clear goals and expectations.
- Trust between reps and leadership.
- Trust between sales reps.
The importance of transparency, empathy, and trust should permeate your organization. Ask your employees if they already see these values in your organization. If not, it’s time to make a change.
Retaining Top Talent
Sales teams will likely continue to see high employee churn and turnover throughout 2023. However, that doesn’t have to be the case for your business. If you keep the above tips in mind, you can minimize churn and keep your salespeople happy, which will be better for your brand in the long run.