Attrition is attacking your workforce. Between The Great Resignation luring away top talent and roles evolving faster than you can replace them, your organization is at risk.
This complete guide will explore the scourge of attrition across employee sales programs, unpack the crucial differences between attrition and turnover, diagnose the drivers and costs of sales force churn, and equip you with actionable strategies to retain your all-star talent.
Discover insider techniques to strengthen culture, compensation, development, productivity, and more across your teams. By going beyond damage control and taking a preventative approach, you can build an engaged, empowered workforce in it for the long haul.
Let’s get started bringing attrition to its knees.
Understanding Employee Sales
What is Employee Sales?
Employee sales refers to programs where companies encourage or incentivize their employees to sell the company’s products or services to customers. This extends beyond the sales team to involve employees across the organization.
For example, a software company may offer employees commissions for referring new customers. Or a restaurant may reward waiters who upsell items on the menu. The goal is to leverage every employee interaction as a sales opportunity.
Some key characteristics of employee sales programs:
- They create a sales-oriented culture by promoting selling behaviors across all roles.
- They aim to increase revenue by activating the entire employee base as an extended salesforce.
- They provide financial incentives like commissions, bonuses, or rewards for sales activities.
- They equip employees with product knowledge and selling skills to close deals.
Employee sales differ from traditional sales teams because they involve employees whose primary role is non-sales. Turning these employees into part-time salespeople allows companies to maximize revenue potential.
Why Do Companies Encourage Employee Sales?
There are several compelling reasons companies implement employee sales programs:
Increase Revenue
More people selling = more sales. Employee sales significantly expands a company’s sales reach, leading to dramatic revenue growth. According to Forrester research, employee-led selling generates 28% of B2B revenue, expected to climb to 38% by 2022.
Leverage Existing Interactions
Employees interact with customers as part of their normal roles – service calls, deliveries, customer support, etc. Equipping them to sell during these touchpoints allows companies to capitalize on readily-available selling opportunities.
Enhance Cross-Selling
Expanding the salesforce creates more cross-selling potential. Non-sales employees may be aware of customer needs that traditional salespeople are not. This insider knowledge helps connect customers to relevant offerings they may have otherwise missed.
Improve Customer Relationships
Customers often develop rapport with employees across a company, not just the sales team. When multiple employees act as trusted advisors, it strengthens overall customer loyalty and relationships.
Increase Employee Engagement
Giving employees a stake in sales outcomes boosts engagement. It empowers them to directly impact revenue rather than just performing their static job duties. Commission-based earnings also provide meaningfully higher compensation.
Gain Competitive Edge
A vast employee sales network is hard for competitors to rival. The sheer size and reach of an activated, empowered workforce poses a formidable advantage that accelerates business growth.
How Do Companies Structure Employee Sales Programs?
Launching an impactful employee sales program requires thoughtful structure adapted to your business model. Here are some components to consider:
Participant Selection
Decide which employees are best suited for a sales role based on their level of customer interaction. Prioritize roles like account managers, customer success managers, implementation consultants, etc.
Voluntary vs Mandatory
Consider whether participation should be mandatory expectations of their job or voluntary overtime. Voluntary programs may see higher engagement but lower participation rates.
Training
Provide training to teach selling skills like persuasive communication, objection handling, relationship-building, etc. Ensure employees understand compliance guidelines.
Incentives
Offer compelling incentives for completing defined sales activities or transactions. Common approaches are percentage commissions, tiered bonus structures, rewards programs, and sales contests.
Enablement Resources
Equip employees with needed sales resources – product collateral, sample call scripts, competitive intel, ROI calculators, etc. Arm them to succeed in sales situations.
CRM Integration
Integrate the program with your CRM system to track employee sales pursuits, provide visibility, and measure results. This allows holistic management of the expanded salesforce.
Leaderboards
Use gamification through public leaderboards displaying top performing employee sellers. A little friendly competition drives participation and engagement.
Awards & Recognition
Recognize top contributors with awards, shout-outs, and perks. Celebrate sales wins publicly to reinforce the behavior.
Compliance Precautions
Put safeguards in place to ensure employee sellers comply with policies and regulations. Stress proper disclosures, disclaimers, license requirements, etc.
Best Practices for Employee Sales Programs
To maximize your program’s impact and avoid potential pitfalls, incorporate these best practices:
Get Executive Buy-In
Secure strong C-level endorsement and support to lend credibility. Help leadership be vocal champions to spearhead cultural change.
Set Clear Expectations
Provide detailed guidance on program objectives, requirements, and processes to prevent confusion or issues.
Ensure Adequate Training
Don’t assume employees have selling skills. Invest time training them to avoid problems. Monitor and retrain regularly.
Start Small, Then Scale
Run small pilot programs first to test and refine your approach before full rollout. Slowly expand your scope based on initial successes and lessons.
Automate Incentive Tracking
Minimize manual administration of commissions and rewards. Automate calculations through your CRM to ensure accuracy and timely payouts.
Highlight Success Stories
Widely publicize wins, deals closed, and satisfied customers resulting from employee sales. Quantify impact and celebrate achievements.
Solicit Continuous Feedback
Check in frequently with employees for input to identify improvement areas. Be agile in fine-tuning the program based on feedback.
Review Metrics Diligently
Follow program data closely to spot trends, outliers, and opportunities. Pay close attention to engagement levels, adoption rates, and sales growth.
Attrition vs Turnover – What’s the Difference?
Attrition and turnover are two important workforce metrics that are often used interchangeably but have distinct meanings. Understanding the difference between these concepts is crucial for HR leaders and business owners.
Defining Employee Attrition
Attrition refers to the gradual reduction in a company’s workforce over time. It happens when employees leave and are not replaced. There are a few key types of attrition:
Voluntary Attrition: When employees voluntarily resign from their positions. Common examples are resigning to take another job, moving, returning to school, or taking time off for family.
Involuntary Attrition: When the company decides to eliminate positions or terminates employees. This includes layoffs, position elimination, firing employees, etc.
Retirement Attrition: When employees retire and leave the company. This is natural attrition that is generally predictable based on employee age demographics.
Internal Attrition: When employees leave their current roles to take new positions within the same company. This is common in fast-growing companies.
External Attrition: When employees leave the company altogether and must be replaced with new hires. This typically has a higher cost impact than internal attrition.
Attrition decreases the overall headcount and talent pool. The remaining employees may need to take on more work to compensate.
Defining Employee Turnover
While attrition refers to positions left unfilled, turnover is when departed employees are replaced with new hires. Turnover only measures employees who voluntarily elect to leave their jobs, not involuntary terminations or layoffs.
Some examples of common reasons for turnover:
- Employees resigning for better job opportunities
- Seeking improved compensation and benefits
- Relocating
- Dissatisfaction with the work environment or company leadership
- Lack of growth and advancement opportunities
Turnover keeps staffing levels stable but does incur replacement costs like recruiting, hiring, and onboarding. It can also lead to loss of institutional knowledge.
Key Differences Between Attrition and Turnover
The main differences between attrition and turnover can be summarized as:
Cause of Departure
- Attrition includes all types of departures – voluntary resignations, retirements, and company-initiated terminations.
- Turnover only accounts for voluntary resignations.
Impact on Headcount
- Attrition reduces overall staffing levels when positions are eliminated or left unfilled.
- Turnover maintains consistent staffing levels because employees are replaced.
Replacement
- Attrition does not involve finding replacements for departed employees.
- Turnover requires recruiting and onboarding new hires to fill vacated positions.
Long-term Costs
- High attrition may lead to overworking remaining employees and weakening of talent pipelines.
- High turnover drives up ongoing replacement costs for separating employees.
How to Calculate Attrition and Turnover Rates
Being able to quantify and compare attrition and turnover rates is important for analyzing workforce patterns.
Attrition Rate Formula:
Number of employees who left in a period ÷ Average number of employees during the period x 100
For example, if a company had an average of 200 employees last year, and 25 left without being replaced, the attrition rate would be:
25 / 200 x 100 = 12.5%
Turnover Rate Formula:
Number of voluntary resignations in a period ÷ Average number of employees during the period x 100
If 15 of those 25 employees who left voluntarily resigned, with 10 being laid off, the turnover rate would be:
15 / 200 x 100 = 7.5%
As shown by the lower turnover rate, some employees left due to factors outside the organization’s control. Analyzing these rates together provides a clearer picture of what is driving workforce changes.
The Causes and Costs of Sales Attrition
Sales attrition refers specifically to turnover within a company’s sales department. Compared to other teams, sales organizations tend to have uniquely high attrition rates that can seriously impact revenue growth if left uncontrolled.
What is Sales Attrition?
Sales attrition is the gradual loss of salespeople due to voluntary resignations, terminations, retirements, etc. It reflects the reduction in sales headcount over time.
Attrition is often measured in terms of the sales attrition rate – the percentage of salespeople who leave in a given period. A high rate indicates substantial losses in sales staff that are not being organically replaced with new hires.
Some negative effects of sales attrition:
- Revenue declines from loss of seasoned sales talent.
- Disruption of customer relationships previously managed by departed reps.
- Lost productivity and growth due to open sales territories and positions.
- High expenses for recruiting, hiring, and training replacement reps.
Minimizing attrition is a crucial focus for sales leaders to build robust, consistent teams.
Average Sales Turnover Rates
Various studies reveal worryingly high sales turnover rates:
- The average turnover rate for sales roles is 35%, nearly 3x higher than the average across other departments. HubSpot
- 45% of B2B sales organizations have average turnover exceeding 30%. SiriusDecisions
- 67% of sales leaders say their organization lost 25% or more of their sales reps per quarter. Forbes
These consistently high rates demonstrate sales attrition poses a significant challenge in building stable, productive sales teams.
The Costs of High Sales Attrition
Losing salespeople without offsetting replacement incurs major financial costs:
- It takes 29-36 days on average to fill an open sales role. BHI
- The typical cost of replacing a departed sales rep is at least 50% of their base salary. HubSpot
- For a mid-level salesperson with a $60k base salary, turnover costs exceed $30k per employee.
- For an entire sales team of 50 people with 35% attrition, the total replacement costs could reach $525,000.
Beyond direct costs, depleted sales headcount also reduces productivity, revenue, customer retention, and growth potential.
Top Reasons Salespeople Leave Their Jobs
Understanding why sales employees voluntarily resign is key to lowering attrition. Common factors include:
Limited advancement opportunities – salespeople denied clear paths to progress their careers often move to new companies offering greater upward mobility.
Unhappiness with leadership – poor management and lack of support from sales leadership causes lost trust.
Overly aggressive sales goals – unrealistic quotas and impossible sales targets demotivate and burn out reps.
Inflexibility around work-life balance – requiring excessive hours or weekend work leaves no room for family and personal needs.
Lack of competitive compensation – stagnant pay, small raises, and absence of rewarding incentive structures.
Toxic sales culture – overly competitive coworker dynamics or unethical pressures to hit sales numbers.
Insufficient sales enablement & coaching – missing skills training, content, systems, and coaching to succeed.
Armed with an understanding of what factors commonly trigger sales talent loss, managers can be proactive about enhancing retention within these areas.
Strategies to Reduce Sales Attrition
Curtailing sales talent loss requires comprehensive retention strategies tailored to your sales organization. Here are some powerful techniques sales leaders can employ:
Provide Competitive Compensation and Benefits
Compensation is consistently a major factor impacting employee retention across roles, including sales. Ensuring your pay packages and benefits matchup favorably to your talent market is table stakes for hanging onto top performers.
Benchmark compensation data
Regularly research industry pay benchmarks in your geography and sales role types. Survey data from resources like the Sales Compensation and Performance Management Report can help validate if your compensation is competitive.
Segment and tier incentive plans
Align incentive pay to the unique needs of different sales segments – such as hunting vs farming reps. Tier commission rates and accelerators to reward growth.
Consider retention bonuses
Offering tenure milestones bonuses gives long-term employees reason to stick around. These could be 1x, 2x or 3x monthly salary payouts at key retention checkpoints.
Offer bonus guarantees
Guarantee new hires a minimum bonus for their first year to provide income stability as they ramp up. This provides financial assurance during the unpredictable early months.
Annual market adjustments
Adjust your overall compensation structures yearly relative to market movement. Avoid stagnant pay bands that trail market rates and incentivize talent to leave.
Strong benefits package
Offer benefits that meaningfully improve quality of life, like extended time off, flexibility, healthcare, retirement contributions, and learning stipends.
Foster a Positive and Supportive Sales Culture
Beyond compensation, your workplace culture and managerial environment heavily influence sales team sentiments. Building a motivating and enjoyable culture pays dividends for fulfillment and morale.
Open communication
Create forums for transparent company-wide and sales-specific communications. Sales leaders should provide abundant context on company news, strategy changes, etc.
Manager support & trust
Salespeople want to feel supported by their direct managers, not micromanaged or unduly pressured. Foster a trusting, collaborative manager-rep relationship.
Recognition programs
Spotlight outstanding achievements and milestones with peer recognition. Highlight top performers during sales townhalls and all-hands meetings.
Low ego environment
Avoid cut-throat coworker dynamics where reps feel pitted against each other. Healthy competition is fine, but overly-combative cultures drive churn.
DE&I initiatives
Ensure equitable opportunities, inclusive communities, and zero tolerance for discrimination. Representation at all levels enhances morale and retention.
Bonding experiences
Facilitate shared experiences like offsite retreats, volunteer projects, and social events to foster deeper connections between team members.
Develop Clear Career Paths and Learning Opportunities
Investing in continuous skills development and providing career roadmaps are key retention levers for top-performing sales reps with ambition.
Document career frameworks
Work with sales reps to map out specific job levels, responsibilities, competencies, and advancement criteria within the sales organization.
Formal succession planning
Identify high-potential future leaders early and groom them for management trajectories. This provides visibility into advancement potential.
Learning stipends
Offer annual stipends towards professional development programs, conferences, certifications and continuous learning.
Mentorship programs
Develop mentorship initiatives to connect less experienced reps with tenured peer mentors for guidance.
Stretch assignment opportunities
Let driven reps take on expanded scope like coaching entry-level sellers, co-leading sales projects, or cross-training into other sales roles.
Leadership rotations
Provide short-term rotational assignments for individual contributors to gain management experience and exposure to new teams.
Leverage Performance Management Tools
Sales enablement and productivity tools are table stakes for supporting the sales profession today. Using solutions that eliminate drudgery and manual tasks is key for retention.
Sales engagement & automation
Arm reps with conversation intelligence tools to speed sales cycles by capturing buyer interactions and automating follow-ups.
Easy access to collateral
Centralize and organize all needed sales resources so reps can easily equip themselves for customer interactions.
CRM workflow streamlining
Configure CRM to automatically populate records, cascade activities, and trigger notifications based on rep actions.
Sales analytics
Provide comprehensive visibility into individual and team performance trends to help managers course-correct proactively.
Gamification
Inject fun and competition using leaderboards, points, badges, and contests to motivate usage of sales technology.
Sales coaching platforms
Help managers provide personalized coaching and real-time feedback at scale using specialized tools.
Incentive compensation automation
Eliminate manual processes for tracking quotas, pipe, and calculating commissions using purpose-built ICM technology.
Prioritize Wellness, Work-Life Balance, and Flexibility
The past few years have made work-life balance and well-being front and center. Sales leaders must take steps to avoid burnout and exhaustion leading to attrition.
Encouraging paid time off
Ensure reps take regular vacations. Consider implementing mandatory PTO if needed.
Mental health coverage
Include mental wellness support and therapy benefits in healthcare plans.
Flexibility
Allow reps flexibility in hours, locations, and schedules. Be open to fully-remote roles attracting talent outside your geography.
Wellness stipends
Offer stipends or reimbursements towards wellness expenses like gym memberships, fitness classes, or meditation apps.
Reviewing workload
Audit sales roles to ensure workloads are reasonable. Look for responsibilities that can be eliminated or automated.
No after-hours work expectations
Be clear that responding to emails or taking calls outside work hours is not required. Model these behaviors from the top-down.
Self-care content
Share tips and best practices around time management, stress reduction, and resilience to prevent burnout.
Analyze Turnover Trends and Gather Feedback from Exiting Employees
Studying sales talent churn patterns and understanding which situations trigger resignations is invaluable retention intel.
Calculate your turnover rate
Quantify your sales team’s turnover rate using the formula:
Number of separations / Average number of employees x 100
Track trends monthly and annually
Calculate turnover rates consistently over time to spot changes and seasonal fluctuations requiring intervention.
Report visibility
Share sales turnover analytics across the leadership team and organization. Awareness facilitates change.
Exit interviews
Conduct exit interviews capturing candid feedback from departing reps on what compelled their resignation.
Anonymous engagement surveys
Use pulse surveys to gauge overall sales team sentiment and flag potential issues driving turnover in real-time.
Internal mobility data
Follow rates of internal sales role changes. Frequent job changes may indicate poor job fit or dissatisfaction.
The Bottom Line – Retaining Your Top Sales Talent
In today’s hypercompetitive talent landscape, retaining your all-star salespeople requires approaching retention holistically spanning compensation, culture, growth, and beyond.
Here are some overarching principles for reducing sales turnover:
Get executive commitment
The push to improve sales team retention must start at the top. Secure buy-in from company leadership to invest in retention programs and make it a strategic priority.
Be proactive, not reactive
Don’t wait for rising turnover before taking action. Monitor proactive indicators like engagement and job satisfaction frequently, and course-correct quickly. Prevention is critical.
Data-driven decisions
Leverage hard metrics on turnover rates, exit interview findings, and team sentiment survey results to guide your retention approach with real insights into improvement areas.
Customized strategies
Avoid one-size-fits-all retention tactics. Tailor initiatives to the unique needs of each sales segment based on their churn scenarios and drivers.
Get input from reps
Incorporate continuous feedback from both current and departing sales reps when shaping retention plans. They provide the closest view into pain points.
Holistic improvements
Isolated retention fixes like one-off bonuses won’t suffice long-term. Strive for holistic enhancements spanning compensation, development, culture and technology.
Quick wins matter
Balance long-term retention infrastructure with short-term needs. Implement “quick win” improvements urgently to halt rising turnover.
Manager accountability
Ingrain retention metrics into how sales managers are measured and incentivized. They play a massive role in influencing team stability.
Ongoing iterations
View improving retention as a continuous process, not a one-time project. Adapt strategies as new dynamics emerge impacting your talent market.
Communicate results
Share retention program results, turnover improvements, and testimonials internally. Momentum builds as employees see your commitment to their needs.
The overarching goal is creating an environment where salespeople feel valued, supported with adequate resources, empowered in their careers, and proud of their workplace culture. This combination fosters loyalty and retention among top talent.
While some turnover will always be inevitable, companies willing to invest in their people can meaningfully move the needle on sales team stability. Given the costs of employee churn, reducing attrition pays dividends across productivity, revenue, and growth. By applying the approaches above, you position your sales organization for sustainable success.
Key Takeaways on Employee Sales, Attrition vs Turnover, and Reducing Sales Attrition
- Employee sales programs activate non-sales employees to sell products and services by providing incentives, training, and resources. They aim to leverage broader employee relationships to drive revenue.
- Attrition refers to positions left unfilled when employees leave a company, while turnover refers specifically to positions vacated voluntarily that must be re-staffed.
- Key differences between attrition and turnover include the types of departures counted, the impact on headcount, whether replacements are hired, and associated long-term costs.
- Sales attrition is particularly impactful as sales organizations have significantly higher turnover rates than other departments – averaging 35% compared to 13% across other functions.
- Common causes of sales attrition include limited career advancement, poor management, unrealistic quotas, work-life balance issues, compensation, and poor culture.
- Strategies to reduce sales turnover focus on enhancing compensation and benefits, building a supportive culture, providing development opportunities, improving productivity through sales tools, emphasizing flexibility and wellness, and analyzing exit trends.
- Regularly calculating both sales-specific and company-wide turnover metrics, benchmarking against industry baselines, and monitoring trends over time provides data-backed insights to inform retention initiatives.
- A multi-pronged approach combining short-term fixes and longer-term infrastructure improvements is key to curbing attrition among high-performing sales employees.
Frequently Asked Questions
What are some key differences between attrition and turnover?
The main differences are that attrition accounts for all types of departures while turnover only includes voluntary resignations. Attrition reduces headcount when positions are eliminated or left unfilled, while turnover maintains staffing levels through replacements.
What is a healthy turnover rate?
Experts suggest an average turnover rate of 10-15% is relatively healthy across most industries. Technology and sales roles tend to be higher around 25-35% turnover. Rates exceeding 50% are dangerously high.
How do you calculate turnover rate?
Turnover rate = (Number of voluntary departures in a period) / (Average employees in that period) x 100
Why is sales turnover typically higher than other departments?
Sales turnover is higher due to the competitive, transactional nature of the profession. Top performers are often recruited away for higher commissions and opportunity. Quota pressure also burns people out.
What are top drivers of voluntary sales turnover?
Most salespeople leave due to limited advancement pathways, poor management support, unrealistic quotas, work-life balance challenges, non-competitive pay, and weak culture/morale.
How can managers improve sales team retention?
Managers play a huge role in retention. They should provide coaching and support, reasonable goals, development opportunities, competitive compensation, and flexibility. Fostering a positive culture and preventing burnout are also key.
What are some warning signs that signal turnover risk?
Key attrition warning signs include declining engagement, high absenteeism, reduced productivity, failure to meet goals, “quiet quitting”, policy violations, and criticism about leadership/culture.
How should sales leaders respond to rising turnover?
Leaders should analyze exit trends to diagnose causes, gather team input through surveys and focus groups, benchmark against competitors, enhance weak spots in culture/comp/growth, and track retention metrics to monitor impact.
What are quick action items that improve sales retention?
Some quick fixes include offering spot bonuses for top performers, highlighting internal mobility options, scheduling offsite team events, publicly recognizing achievements, and soliciting real-time feedback.