It’s that time of year. Spring training is underway, NCAA brackets are forming, snow is a thing of the past (hopefully). And for sales reps, it’s bonus time! For companies with a calendar fiscal year, comp administrators have been busy calculating (and deliberating) year-end bonuses. Payout day is the day all reps -- and their significant others – realize their hard work may actually turn into a vacation, car, or another indulgent purchase.
But for those in leadership, it’s also the time of year to worry. Once sales reps receive that bonus, many companies see a spike in voluntary turnover, higher even than the 20% average. As one client told us recently, “I need WD40 on my door for the month after bonus payout.”
So, what can you do to prevent the bonus exodus?
Here are four key strategies to keep in mind as you manage through this challenge.
1. It’s not all about the dollars. Over the years, we’ve asked tens of thousands of sales reps, “What motivates you most?” Yes, sales folks are motivated by money. We want our sales team to be hungry. But while cash bonuses are always at the top of the list, they’re followed closely by “recognition by my team,” “strong manager,” and “meeting customer needs.” For Millennial reps, “opportunities for learning” and “personal development” rise to the very top.
Emphasizing the team mindset is a common miss when it comes to retention. Sales professionals want to be a part of a team. Our research shows that over 80% of high-performing sales resources played competitive team sports in high school and/or college. This directly ties back to the idea of team selling that we have talked about here and here. Reps who have accountability to a team are less likely to leave their team mates high and dry once bonuses are paid out.
2. Know the motivations of your new hires (and keep asking). Many of our clients have a rigorous hiring process that includes interviews, case studies, and a multitude of assessments (personality, skills, intelligence). Evaluating a candidate from many angles is critical to determine fit. We coach our clients to ensure they ask the hard questions up-front:
- “What really motivates you?”
- “If you fell short of your number and target incentive, how would you react?”
- “Is money your number one driver?”
These are the same questions that need to be asked after the honeymoon phase is over since individual motivations may change. While “job opportunity” and “recognition” may have once been a driver, motivation could change if the sales rep now has three children and a mortgage. That one-time team player may now be motivated by dollar signs. As a sales leader, it’s critical to know what drives your individual team members.
3. Communicate and celebrate beyond bonuses. There are other factors beyond the paycheck that will prevent a mass exodus. Non-monetary rewards – such as good team relationships, opportunities to grow, respect/appreciation/recognition, flexibility, and strong coaching – are all powerful retention factors.
In a recent study, sales resources who didn’t get a lot of coaching and feedback from their managers were 33% less likely to remain at the company. Coaching can’t be mistaken for managing (catch up on effective coaching tips here) and needs to be focused, action-oriented, and frequent. During these coaching sessions, you can learn about the individual internal drivers and connect the intangible benefits to those drivers.
4. Embrace some exodus. We all know that some turnover is a good thing for a sales team. It provides for new blood, new ideas, and a new energy internally and externally. We have to believe that folks only motivated by a bonus probably didn’t have the “There is no I in team” t-shirt! Most likely, their eyes hadn’t been on the ball for the past few months, and that dip in productivity can be contagious.
As a sales leader, embrace the idea that your team is better with the players who want to be a part of the team and share a vision. If team selling is a core component of your sales model, the lone wolf is not a long-term player.
Yes, unemployment continues to remain low and most sales hiring leaders know it’s an “employee” market. The loss of an “A player” can sink a company fast from both a dollar and morale perspective. But economic uncertainly lingers and recession rumors persist. The power balance between company and rep is in constant flex.
As those bonus checks are issued, keep a pulse on your sales team’s motivations. Sustaining a highly motivated sales force is an ongoing leadership and communication challenge. Look beyond quick fixes or a bonus band-aid.
Contact us to learn more about assessing, incenting, and coaching your sales teams to success in 2019.