As business owners, we are well aware of the swings in ROI when looking to hire new resources to a small to mid-sized sales team. A great sales hire can pay dividends over the long term and become a valuable asset to the organization as a whole.  Conversely, a bad hire can be a significant blow to the profitability of a company and a burden to the team. A tough question that business owners and sales managers need to ask themselves is “how do I assess the success of a new hire ROI?”

For most small to mid-sized businesses, the time frame for measuring success can vary in length. It can depend on the sales cycle, the type of product or service, and the sales price point. Some companies outline detailed metrics and a probationary period that clearly lays out expected results over a defined time frame (e.g.- 3 to 6 months). Where some companies have a fire fast mentality, other businesses are more forgiving and provide the new hire with an open grace period (depending on events and activities that fall in line with expectations). A fair and reasonable new sales hire ROI also needs to include the front-loaded investment of time and energy required to get the individual up to speed. However, knowing how difficult it is to recruit and secure what appears to be a top sales person (Top 10 Signs you’ve Hired a Great Sales Rep– a must read!), companies sometimes hang on to mediocre performers because a hint of success is lingering on the distant horizon. Avoiding the painful process of having to replace an under performer can place blinders on decision makers when assessing the hire/fire and replacement scenario.

In our experience working with a wide array of sales professionals, there are additional signs that indicate whether or not a new sales hire investment will pay off. If you believe that an under performer has been hired to your team, you may want to keep a close eye on the following six scenarios to better assess whether you should pull the trigger or hang on for a while.

  1. Phone Time Transition. Most sales positions require some level of phone work or cold calling. At a certain point, new reps need to take the plunge and get on the horn. Some get going faster than others and require less of a learning curve. Others are more resistant to getting on the phone and take more time to clearly understand the sales process and value propositions. From our experience, there is a direct correlation between the time it takes someone to initially get on the phone to the level of revenue achievement. Individuals that quickly get on the phone are more likely to start covering their costs faster.
  2. Activity from their Current Network. If your new hire is coming from one of your competitors (without a strict non-compete) and has a history of success, he or she should have a rolodex of contacts ready to call and engage. If a key purpose of hiring your rep was based on prior connections and industry relationships, the initial expectation of activity from their network should be within a 4-6 week time frame. Obviously, there are variables that come into play, but an ROI on the current network value of your new hire should be quite clear within a 3-6 month span (check out our sales expectation matrix).
  3. Resource Utilization. Great sales people do well with what they are given. As long as there is technology and contact data at their fingertips, hungry sales reps quickly accommodate themselves. Additionally, good reps will become self taught with the ins and outs of the tools so that their sales activities are as efficient as possible. If a new rep is continuing to tell you that they can’t sell without all the things that you aren’t providing, the writing is already on the wall.
  4. Time Allocation with Other Team Members. Time is money and the balance of time spent with team members needs to be closely watched. Naturally, sales personnel are social and always looking to make new friends. However, spending too much time making friends in the office can be counterproductive. Office comradery and relationship building is very important, but the focus on building a territory and selling takes precedence. Watch for the new guy that would rather tell stories and hang out by the water cooler versus making more friends that deliver growth to the business.
  5. Technology Savvy. We advise our clients to put sales prospects in front of a computer prior to making a decision. There are great sales reps that are technology challenged, but they are far and few between. In most selling environments, being nimble on the computer or on a device is just as important as being able to close a deal. Efficient methods for gathering information, tracking history and managing a sales process can be a determining factor in the success of an individual.
  6. Off Hours Priority. New sales hires are under the gun to produce. By definition, a sales rep is on the hook to sell, acquire revenue and build profitability. Thusly, sales professionals need to do whatever it takes to hit their goals or end up looking for their next gig. A new rep should be more in tune with building the success early, which requires productive off-hour activities that are engaging with new prospects and clients. If the new guy on the block is only available during banking hours, he’s probably the wrong hire.

Hiring a new member to your sales team is not always an easy task. You may think you’ve got a great one, but at a certain point, the numbers might not add up.  A simple calculation on assessing the ROI of a new sales rep can usually be spelled out in a black and white equation based on the type of business and how sales success is modeled. However, there are other aspects that need to be determined in calculating a true ROI and whether or not your new hire has the DNA of a sales champion.

Maybe the metrics aren’t telling the whole story. “When do I stop the bleeding?” is one of the one of the most difficult questions to answer for a business owner.  Considering the non-metric actions of your new Sales Hire ROI may keep you from having to ask that tough question.