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The Numbers:
Does the above look familiar?
Our network finds the average time to hire for a sales professional is 60 days, plus an additional 45 days until they start. That is a total of 105 days, not including the decrease in productivity as the previous employee leaves, and the underperformance of the new employee as they ramp up. It’s difficult to put an exact time frame on those, but we reckon it’ll equate to about a further 4 months (1 month departing, 3 months ramping up). In total that means 225 days of no / poor revenue performance. That is 62% of the year!
Based on an average mid-market sales target of £750,000 that means only £210,000 is expected, and that’s presuming you’ve made the right hire. That is a rough annual loss of circa £540,000 per position. If your business is recruiting for 10 positions a year you could be losing a staggering £5.4m a year.
If you hire the wrong people that lost revenue can accelerate rapidly.
The Cause:
There are several causes, most notably: performance management delays, unexpected leavers, poor and poor recruitment performance.
Ultimately, regardless of how the problem has arisen there is one immediate solution – a great recruitment solution.
The Solution:
So, is your Recruitment Set-Up Performing?
Whether your set up is in-house or agency there are two vital metrics that need to be reviewed:
- Is your recruitment set up finding the best talent available?
- How quickly are they doing it?
When was the last time you benchmarked your recruiter’s performance? Whether in-house or agency your recruiters should be held accountable to standards to ensure your company maximises their revenue performance. If you haven’t set targets for the above two points, now is the time to do so.
The common thought process is that an In-House function is cheaper and easier to manage than constantly going out to agency. In some cases, it is. But more often than not, it is actually a myth.
Agencies generally operate in a high-pressured, target driven and commission led environment which means agency focus and subsequent time to hire is significantly quicker than in-house. Agency recruiters also have a much wider specialist network they can tap into to identify and influence the best candidates to start discussions with the relevant organisation. Here at Opto Talent our average time to hire is 18 days, 233% better than average.
The speed of which agencies can operate can save companies significant amounts of money even with the fee attached.
The cost of agencies doesn’t always have to be higher than in-house either. Many agencies now provide flexible, cost-effective smart solutions that give you all the benefits of agency at the same cost and management of inhouse.
Ultimately, speed and quality of hire are key, and if your current set up is not performing at the required level, the financial hit is dramatically higher than you first thought and needs to be addressed urgently.
If you would like to book a free consultation with one of our team, please book in using this link - Book your free chat