In 2020, Xactly found that 58% of sales reps left their jobs during the 12 months prior. Low satisfaction, burnout, poor leadership, and work-life balance are all culprits in this higher-than-average number.
It can be tough for sales teams to combat all of these issues at once, but there is a way to stop sales team turnover. Career ladders can be a feasible solution for both large and small sales teams to feel motivated, fulfilled, and inspired to do their best work at your company and avoid looking for opportunities elsewhere.
Let’s talk about what that means.
What is a career ladder?
A career ladder is a development path that an individual rises through at a company. When an employee meets a certain set of criteria, they’re eligible to move to a rung higher up on the ladder. The goal of a career ladder is for employees to progress through multiple levels of responsibility and salary.
Career ladders help companies retain staff by providing an incentive for them to keep moving forward at the company. In other words, if employees recognize the benefits of growing where they are (i.e., better money, responsibility, or authority in the near future) they’re less likely to leave for another company.
Benefits of a Career Ladder
A career ladder is a great way to show employees that they're important to the company's long-term success. This formal process of role progressions and promotions is a win-win for both parties.
The staff gains additional skills and compensation increases while the company benefits from those skills to bring in new business, recruit and retain top talent, and generate revenue. And since the team is developing at regular intervals, their talents will only get better which helps your company remain competitive.
Overall, your sales team members want to know that there’s a clear, achievable path ahead. And you, as a manager, need to create career ladders to recruit, develop, retain, and reward your people.
How do you know you’re climbing a good career ladder?
A good career ladder goes beyond a list of pay rates and titles. It brings clarity, structure, and equity to the process in multiple ways. A career ladder should include:
- Dedicated paths for individual contributors and people leaders
- Criteria for meeting each level of the ladder
- A rubric for evaluation that contains both qualitative and quantitative milestones
When you focus on establishing these things, you’ll be well on your way to a solid career ladder for your sales team.
Here are some more examples of what a career ladder might look like.
Sales Career Ladder Examples
Sales Development Representative
A sales development representative (SDR) is on the front lines of the business. They're oftentimes the first person a potential customer will meet from your company, so it's important that they're trained on the fundamentals of sales and the ins and outs of the business.
The career ladder for this role is typically short and can be completed in six to 24 months. It begins with SDR I and finishes at SDR III, then the rep is promoted to a brand new role with its own career ladder.
Career Ladder Example for Sales Development Rep I
In a minimum of six months, SDR I will have:
- Learned to prospect
- Received training on sales tactics
- Refined their phone and email skills
- Learned to manage accounts
- Perfected sales pitches
A compensation increase is typical when moving from SDR I to SDR II.
Career Ladder Example for Sales Development Rep II
In a minimum of 12 months, SDR II will have:
- Continued SDR trainings
- Begun more specific training for the SDR III role
- Earned role-specific certifications
- Met knowledge checkpoints
A substantial compensation increase is typical when moving from SDR II to SDR III.
Career Ladder Example for Sales Development Rep III
In a minimum of 18 months, SDR III will have:
- Mentored junior SDRs
- Taken advanced training for future roles
- Passed all knowledge checkpoints for the SDR role
Ideally, SDR III will have completed all requirements of the role and exhausted their salary band. They typically enter a new salary band upon their promotion to account executive.
An account executive (AE) interfaces with leads and prospects. They're responsible for demoing the product, sharing more information about services, and tackling objectives. Once all of that is done, they close the deal and usher in the business's newest customers.
The career ladder for this role is not as short as it is for SDRs, but it can be completed in about three years. Here's an example of how an account executive career ladder might look:
Career Ladder Example for Account Executive I
In a minimum of 12 months, AE I will have:
- Learned to demo products or services to customers
- Received training on handling sales objections
- Learned to identify customer needs and sell accordingly
- Refined their soft skills (communication, empathy, discernment)
A compensation increase is typical when moving from AE I to AE II.
Career Ladder Example for Account Executive II
In about 24 months, AE II will have:
- Continued AE training
- Consistently met quota, targets, and goals
- Begun more specific training for the AE III role
- Built valuable business connections internally and externally
A substantial compensation increase is typical when moving from AE II to AE III.
Career Ladder Example for Account Executive III
In about 36 months, AE III will have:
- Mentored junior AEs
- Taken advanced training for future roles
- Consistently exceeded quota, targets, and goals
Ideally, AE III will have completed all requirements of the role and exhausted their salary band. They typically enter a new salary band upon their promotion to account manager or another leadership role within the sales team.
Now that we've reviewed some example sales career ladders, let's take a look at a real case study for Parse.ly's SDR and AE career ladders.
Case Study: Parse.ly’s SDR to Enterprise AE Role Career Ladder
As another example of what a career ladder can look like, take a look at what Parse.ly did for their SDR to Enterprise AE career ladder. The digital analytics giant noticed a trend when hiring AEs: it took them as much as a full quarter to get ramped up completely. The result of this was frustration because Parse.ly was covering training and salary without seeing ROI, and the AE’s were missing targets.
To remedy this, they started to review their process, then started hiring different people: those with just a few years of experience, enough to have the chops to sell, but not so far along as to jump straight into an AE role. They showed the candidates a real SDR to Enterprise AE career path, taking just three months to ramp into the SDR role.
After being fully ramped by month three, the SDRs are on track to be promoted to an AE role based on their merit and demonstrated skills. Evaluated on a monthly basis, the SDRs must succeed in two ways of measurement: quantitative and qualitative.
For quantitative checkpoints, the SDRs are asked:
- “Are you efficiently handling your leads and accounts?”
- “Are you hitting your quota and setting meetings?”
- “Are they quality meetings that are converting to revenue scored?”
For the qualitative, more subjective questions were asked, like:
- “Are they thinking critically about how to close each deal?”
- “Have they been working with the AEs closely?”
Other things Parse.ly used to determine qualitative success included observing the SDR. Were they comfortable walking away from business that was a poor fit? Did they do more work aside from setting calls -- like customer support or adding value in the sales process to get a client to close?
After ramping fully and becoming qualified, the candidates go through a transition period of doing 50% SDR work and 50% AE work. Once fully transitioned, there’s typically little more ramping to do to start building their pipeline.
Although taking longer to ramp from SDR to AE, this ladder actually results in a shorter expected AE ramp time, a lower risk of a bad hire, and a clear career progression from the SDR team.
The newly promoted AEs also start contributing to revenue closed within weeks of promotion -- great for their confidence and great for the company.
How to Coach Your Team Up the Ladder
As you develop and implement career ladders into your sales team, there are some things you can do as their manager to further coach team members on their way. Try this exercise with anyone interested in advancement (whether management or not):
1. Open the conversation
Invite a team member who’s interested in advancement for an in-depth, authentic conversation about what opportunities are available in both management and non-management roles. Ask them about their thoughts on what a role they’re interested in will require of them, the benefits they’d like to gain, and so forth. Find out their thoughts and assumptions about the role.
2. Break the assumptions and fill in the gaps
Once you know where the employee is coming from and what assumptions they have, it’s time to break the reality to them: what the role really is -- not what they think it is. There may be some friction between the two versions.
3. Set expectations
Now that the team member understands what a role really is and requires of them, share the full job description and ladder. Then, set a realistic timeline and show them the qualitative and quantitative milestones they’ll have to achieve and at what points to progress.
Using an exercise like this to build a sales ladder for individual team members can be hugely beneficial.
Your reps gain more ownership over their role and career, which helps them get into greater alignment with what it takes to rise up the ladder. They also receive the guidance and structure to pursue the right direction for them.
Most companies don’t build career ladders, or at least don’t make their employees aware of them. This is a huge missed opportunity.
Help Your Sales Team Climb the Career Ladder to Success
Today, we outlined what a career ladder is and how it can help. You also got an example of what a sales development rep to account executive role career ladder could look like, as well as an exercise to try out with any team members who might be eager to advance upward.
Ultimately, you must apply what you’ve learned here and build a career ladder that fits the roles of your specific sales team. It should have qualities listed here, but also have its own characteristics that work best for your team.Editor's note: This post was originally published in June 2019 and has been updated for comprehensiveness.