Only the Employed Need Apply (Especially in Sales)

I’ve been sitting on this blog post for a while thinking that its efficacy would get better and better as the economy and job market failed to recover at the pace that the economists thought (hoped) it would.  It looks like my hunch was right.

Nine months ago, the Wall Street Journal published an article called “Only the Employed Need Apply“.  The premise of the article was that many employers were only interested in talking to people who were already employed – even if the candidate who had applied had lost their job even after performing at a high level.

Bobby Fitzgerald, a partner in five restaurants in three states, says these days he gets two dozen or more unsolicited résumés each day at one of his Phoenix restaurants, the White Chocolate Grill. But Mr. Fitzgerald says his top candidates, for jobs ranging from servers to management, usually are people who are employed elsewhere. He currently has 50 openings across his five restaurants and has told recruiters to bring in only people who are working.

When you consider that in March 2010 our unemployment rate is still on the precipice of 10% and the average time that someone is unemployed is still over 1/2 of a year, it would appear that Business Leaders like Bobby Fitzgerald aren’t alone.

At Hire Better, we’ve seen a significant up-tick in the number of clients who want us to assist them in hiring salespeople.  For those salespeople who we see as applicants, the statistics are NOT in their favor if they’re applying for a role in which Hire Better is involved.  Here’s what we’ve found:

In a typical hiring cycle, assuming that we have 100 people to consider for a role:

• 82-85 will be Direct Applicants
• 12-15 will be People who are “headhunted” or from our Network
• 1-3 will be Referrals from internal employees at the client company

When we get down to the Top Three Finalists, they’ll look like this:

• 1 Direct Applicant
• 1 “headhunted” Candidate
• 1 Referral

And when the finalist is hired: The chance of the Direct Applicant goes DOWN exponentially as the salary and responsibility goes UP.

For a Sales role, the prospects of a Direct Applicant are even WORSE.  The same statistics will apply to the Candidate pool as before but I have to expand the pool to 5 people when you look for Finalists:

• 1 is a Direct Applicant
• 3 are “headhunted”
• 1 is a Referral

And when this is the case, the Referral has more than a 50% chance of getting hired and the Direct Applicant has less than a 10% chance.  In the case of sales candidates – I believe these stats are just about right.  And they’re justifiable!  If you’re considering hiring an unemployed salesperson or sales manager, you should be asking yourself “Why would a good salesperson be unemployed?”

Dave Kurlan, who I haven’t mentioned in quite awhile, recently shared his findings on how long it takes to get an ROI on a salesperson.  His bold mathematical formula looks like this:

If you have a 12 month sales cycle and an 8 month learning curve, it will take nearly 2 years to get your new salesperson producing consistently.  In that 2 years, maybe you’ll pay out close to $150,000 in subsidies.

Using your average margin, how much revenue must be gemerated to offset that subsidy?

How much revenue must be generated to produce a satisfactory ROI?

How long must the salesperson stick around in order to produce that ROI?

To bring it all back together, if a prospective sales candidate (who, for the sake of this blog post is unemployed) has found him/herself in a new sales role every 2-3 years, what are the odds that anyone who is hiring them is going to experience a positive ROI?

When we look at candidates through this lens we find it’s a lot easier to not find ourselves getting “sold” during an interview by someone who has all kinds of great excuses for why “things just didn’t work out” at that last job they were in…

Tags: A-Player, A-Players, bad hires, Baseline Selling, challenges of hiring salespeople, Dave Kurlan, hire better, hiring, hiring manager, Interview, Kurlan, mediocre salespeople, Objective Management Group, recruit don't absorb, Recruiting, recruiting salespeople, Salespeople, talent acquisition, unemployment, unemployment rate, virtual bench