Beware the Revolving Door: Know the Signs of Employee Turnover

Turnover poses a huge risk to sales organizations. Discover the key signs of employee turnover so sales leaders can intervene and keep top reps from leaving.

3 min read

Employee turnover is costly. A study conducted by the Society of Human Resources Management (SHRM) estimates that direct turnover costs are 50-60% of employee salary. When you take into consideration that 20% of your sales force generates 80% of your revenue, losing a rock star sales rep can be devastating to your revenue stream.

Plus, all of the associated business costs — exit costs, absence costs, recruitment costs, and onboarding costs — add up and affect profits. And that’s just the tip of the iceberg, of course; turnover has a cascading effect. There are more costs that won’t appear on your balance sheet. On average, it takes about eight weeks to recruit and hire an employee, and several more weeks for training.

During this time period, performance takes a dive and others are expected to pick up the slack. Those that do, feel overworked and stressed, and negatively affect morale. This type of atmosphere creates — you guessed it — more turnover. And the cycle begins all over again. To reduce turnover of top performers, follow these three steps:

  1. Identify Turnover Spikes: Learn to recognize when turnover is going to occur, so you can head it off at the pass. Compare turnover data over several years to determine if spikes are occurring at typical times. Turnover spikes among top performers typically occur during the first and last months of the fiscal year, as well as in the middle of the fiscal year.
  2. Use Data to Gauge the Temp: of top performers at critical times. Are top reps hitting their sales performance goals consistently? When you compare current data to previous data, what do you notice? If reps’ numbers are down, it could signal that they have their eyes on the door.
  3. Introduce Incentives at Spike Times: as well as when data indicates that sales performance — and employee engagement — are lagging. Give disengaged reps a bit more attention by taking them to lunch, introducing a new SPIFF, or finding other meaningful ways to make staying the best option.

When faced with the choice of spending money on turnover or spending it on keeping a great rep, invest in the rep. Use automatic sales compensation software to identify typical turnover times, and to introduce sales incentives when warning signs occur.