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Chasing The Money

by David Brock on February 21st, 2022

Opportunities for sales people are skyrocketing. As we emerge from the pandemic, as organizations cope with the “great resignation,” there are more opportunities than there are good sales people to fill them.

As a result, organizations are tossing money at the problem, comp increases of as much as 30-40% are common. A recent article said average tenures for sales people have declined to 11 months.

I worry about this–both from an organizational/hiring manager point of view and for sales people.

For hiring managers, what experience and skill can we expect people to have? Even for the simplest of sales roles, onboarding takes several months. For some organizations, it can be over twelve months. Then we look at sales cycles. For complex B2B sales, it’s not unusual for cycles to extend over a year. Even for more transactional offerings, sales cycles can take months.

As we look at the experience people have, how many opportunities have they actually competed in, through conclusion. How many cycles have they gone through? Have the results they have produced been a result of their work or that of their predecessors? How much experience do they have in making quota? Have they faced adversity and demonstrated resilience in that?

As I look at many profiles in LinkedIn, is see too many people with years of experiences, not experience.

As hiring managers, do we want to make the investment in developing people, only to have them leave before that investment has been recovered? Isn’t it better to look for people that are willing to commit time, grow and develop in our own organizations?

From a seller point of view, I have concerns, as well. It probably seems the height of arrogance to say, “be careful if the primary motivation for moving to a new job is ‘chasing the money.'” I’ve taken jobs, in my career, where I have been chasing money. I’ve also turned down jobs that offered the potential of doubling my comp within 12 months–but have turned them down.

One time, very early in my career, a competitor was chasing after sales people in my company. Many of us interviewed, including me. The offers were very tempting. I could easily double my comp by accepting their offer. I talked to a mentor about this. She offered some perspectives that were helpful. First, I had barely been on my job for a year. I had just recently completed my onboarding and training. I had been assigned a territory and set of accounts a few months earlier. While I was building a strong pipeline and had “closed” one moderate sized deal (actually it had been initiated by a predecessor, I just took over in the final stages). I really hadn’t had much experience yet.

She went on further, suggesting the company making the offer would expect a very fast ramp to productivity. While that may have been reasonable for someone with significantly more experience, I had yet to prove–even to myself–that I could do the job at the level I expected.

Finally, she asked me, “Are you giving up the opportunity to really develop and solidify your capabilities by moving to another opportunity before you have had the chance to go through a number of cycles and develop the experience critical to success in the new role?”

I decided to stay where I was, building my skills, confidence, and knowing that the experience I claimed was a result of the work I had put into the job.

There was an opportunity I chased because of the money. It was one of the most difficult jobs I’ve ever had–not because my new employer had unreal expectations, but because I realized I really wasn’t qualified to perform at the level they expected. I didn’t have the right experience to be able to perform. Within a few months, I was put on a PIP. Fortunately, I had a manager that invested in my success, and I was driven by my personal fear of failure. Eventually, I succeeded, but it took far longer than my employer or I expected. And I was never a star performer. Had I spent more time learning and developing in my prior job, I might have been more successful, but I was consumed with chasing the money. And I never really got the money–my performance was lower than they expected, my comp was also lower–a little above what I had been compensated in my previous job, but I was in constant fear of being fired.

Related to the previous point, sellers need to think carefully. If someone is offering big increases in comp, how are they able to justify that increase in spending? From a management point of view, we have to always be alert to our “costs of selling.” We can’t increase our costs of selling without expecting at least a commensurate increase in revenue generated. Alternatively, we have to reduce selling expense in other areas to cover the comp costs. So we may reduce programs, tools, training, support-all of which are critical to seller success.

Sellers, also, should be very cautious about these offers. If there is high turnover with an employer, what is causing that? Will your experience be different, why?

As much as we might like, there is no free lunch. Dramatically higher comp requires dramatically increased revenue expectations or spending reductions in other areas. As a seller looking at these great offers, we have to be cautious about what they mean, what the expectations will be, and whether we will have the support needed to achieve personal success.

Turnover is a huge problem with organizations. The largest part of the problem rests with management that doesn’t value people or create organizations where people want to learn, grow, develop, and work. The plummeting tenures should be one of the greatest concerns of managers and employees. It is, perhaps, the single most important issue facing our organizational and personal growth.

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