Hire a Sales Fraud Lately?


As we all know, hiring top sales performers is a significant challenge for SMB organizations. The right hire can take an organization to the next level, and a bad sales hire can crush a company. We’ve all seen this happen first hand.

This topic has come up on a consistent basis in many of our conversations through the years. Last week, a CEO that I was talking with informed me that they had hired a new account executive, ultimately finding out that this individual was on 4 other company’s payroll and was creating fake opportunities that recruiters were actively working on. I’ve heard of this scenario at least 10 times in the past 5 years.  It’s difficult enough hiring good people, but finding out that the person you felt great about is a fraud??? Wow, that’s devastating.

Let’s think about this. A person makes it through your hiring process, is given the keys to the sales ship, is a trusted advisor in the community, is representing your organization, and IS TAKING YOUR MONEY. The expectation is that these people go to the market and create new revenue for your company. You believe in this person…and they betray you.

Here’s how the scenario ends up playing out- the shiny new employee brings in (what appears to be) new business from large organizations and has your team believing that a greater future is being built. The very thought of penetrating new companies that your organization has yet to build a relationship with is a breath of fresh air. The new rep acquires signed agreements, details of projects, and full blown ready-to-fill requirements. AWESOME! The pipeline is jammed with millions of dollars of new revenue opportunities. However…

Time passes and the pipeline starts getting flat. Opportunities go unfilled. Nothing closes. Smoke is everywhere, but there is no fire in sight. You hang tight and wait for results. The hope of something landing keeps you writing the checks. Months go by and the question keeps coming up: “do I fire this person, or keep hanging on?”.

Even if the person isn’t a fraud, this decision process is a common scenario in the technology staffing and services business. This is a difficult industry, no question. But there are ways to avoid hiring frauds and non-performers.

Follow these steps in order to minimize the risk of spending money on those individuals that will ruin your business.

  1. Always Perform a Background Check. Background checks can tell you a lot, mostly regarding the basics of someone’s past. However, many companies only do this for their contractors, but not their internal employees. If the person is a convicted felon or has a criminal record, a background check would uncover this tidbit right away.
  2. Run a Credit Check. Many people would be hesitant to share this information with an employer. I would make it clear on the front end of the hiring process that a credit check will be required. Add this to the application process so that there are no surprises down stream. Typically, there is a correlation between dishonesty and credit history. Of course, there are exceptions, but if you are hiring someone that has a speckled credit history, it’s likely that there are issues relating to management of time, organization and other related qualities you want to flush out.
  3. Verify the Previous 2 Years of W-2 Earnings. This is a must in any sales hire. Some of our clients have been very resistant in asking for this information, but we force the issue on this policy. Most of our clients want top performers and we expect that top performers have a history of high earnings. Checking on this information also verifies what they were making as total comp versus base/incentive breakdown. Many sales reps that make a move want previous total compensation to fall in as their base salary in the new company, which should be a red flag. Additionally, checking this information will ascertain the applicant’s commission levels, ultimately revealing actual sales performance.
  4. Verify and Cross Check References. Don’t just check references, check the references of the references! Frauds normally set up a ring to help each other out. They each validate the other when it comes to reference checking. Find out if the person you are talking to is actually employed where they say they are. Find a history of the connection of the applicant to the reference. Make sure that all of the interactions check out. Since the emergence of LinkedIn, gathering background data on anyone has become more readily available. Don’t be afraid to dig 3-4 layers deep on people to absolutely make certain that there are no smoke and mirrors present.
  5. Completely Check Social Profiles and Google Search Results. Privacy is a big topic relating to social media platforms, but if there is public information, check it out. Find out what your applicants are up to and what their digital footprint is like. In addition to uncovering general information about them, you’ll be able to see what kind of networker they are. I was told by someone the other day that one of their under-performing sales reps doesn’t even have a LinkedIn profile. Are you serious!??!!? A sales rep doesn’t have a LinkedIn profile? Fire them immediately (another topic altogether).
  6. Find and meet two Connections of the Person. This might be a tough one, but if there are still questions about the candidate, meet people that will validate the quality and background of the person. Previous clients of the applicant in their workplace would be a great place to start. Worse case scenario, you gain two more networking connections.

Again, hiring sales professionals is a difficult thing to perfect. Everyone wants to hire top sales producers, but sometimes it’s ok to hire the average ones to gain traction in your market. Make sure that your HR policies are well documented so that you aren’t violating any laws. Consistency with hiring practices is something to pay close attention to.

In the IT Staffing and Services business, you need to continuously be marketing your company for new reps. Talk to us about how we can help in this process or penetrating markets for opportunity.

Bonus Read Relating to this Topic: Hire Slow, Fire Fast!

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