When to Fire a New Hire
Why would anyone in their right mind want to fire someone they recently hired? Smart sales managers, that’s who. What would make them want to do such a thing? Non- or poor performance, that’s what. Judging non-performance is easy to figure out but exactly how do you gauge poor performance?
Do You Have a Winner?
You’ll know if you’ve hired a winner pretty quickly. These people come up to speed quickly and will normally reach a reasonable level of activity within the first 90 days, sometimes sooner.
The problem is often trying to figure out if you’ve got a less-than-a-winner, also known as a loser. Just because someone doesn’t come up to speed within the first 90 days doesn’t mean you’ve got a loser. Often, you will not be able to make that determination in less than six to nine months or even a year in some cases.
The normal ramp-up time is extended if a person is new to sales or new to an industry. First of all, it takes some time for the new person to find his or her way around the new company as well as the new sales environment.
If someone is new to sales, he or she also has to figure out what this whole selling thing is all about as well. This is one of the reasons I’m not a big fan of hiring people with no or inappropriate sales experience. Too long a ramp-up time.
I don’t know of any sales manager who deliberately sets out to hire a non-performer unless he either has a death wish or is hiring a family member who should be doing something else for a living. Sometimes we hire family members because no one else will! Another bad move.
What normally happens is that despite our best hiring practices, we come across someone who is a master at selling himself but unfortunately nothing else. They are usually very likeable, charming people who present themselves well.
They usually last somewhere between 12 to 18 months on the job before they either get fired for non-performance or quit shortly before the axe is going to fall. In their heart of hearts, they know they can’t do the job, but bless their tiny hearts, they keep on trying anyway.
Salespeople are a pretty transient bunch but watch their resumes to see if they are changing companies every 12 to 18 months. That’s a red flag you should check out before hiring, not after.
If you have inadvertently hired a non-performer, you should move quickly to remove them from your roster within six months.
Weeding Out Poor Performers
Poor performers are a more difficult problem, primarily because we have a challenge in determining exactly what constitutes poor performance. Before I give you some guidelines on gauging poor performance, let’s look at some of the causes.
Here are two of the more common causes of poor performance, apart from the fact that the person is a square peg in a round hole and shouldn’t be in sales at all.
The first is that the person is selling the wrong product or service. Despite the common perception, not everyone can sell everything. Even a seasoned pro can find himself in an area where he simply doesn’t have the required expertise or experience to do a good job.
The second reason is that the person is burned out. Burnout may be caused by job or personal stress and the person simply doesn’t have the energy to do what needs to be done to succeed. These people perform well during the job interview and will give you a good three to six months of effort before the pressures get to be too much and they coast to a finish.
Avoiding the Problem
There is probably no way to totally avoid the problem, but there is a way to minimize it. Set minimum performance standards or expectations for the new hire and make sure that he or she is fully aware of them.
Minimum performance standards will vary with the type of salesperson you’ve hired. The minimum standards will differ for the person who is new to sales, the one who is new to selling what you want sold but is an experienced salesperson, and different again for the experienced salesperson who is also experienced in selling what you want sold.
Here are some recommended minimum performance standards. I’m not suggesting they’re acceptable, they’re just the minimum. The percentages refer to the percent of annual quota that you expect them to do.
A = New to sales
B = Experienced salesperson, new to the industry
C = Experienced salesperson, from the same industry
Notice that even your most experienced salesperson may not make quota in that first year due to the normal ramp-up time. But he should be selling at the required monthly rate to make quota by the end of that first year (annual quota divided by twelve).
Not Meeting the Minimum
So, what do you do if the new hire doesn’t exceed the minimums? I certainly don’t recommend that you dose him with gasoline and set him ablaze at your next sales meeting. While this might act as an example to the rest of the team as to what will happen if they miss their quota, it’s not a good idea. Use the occasion to have a heart-to-heart chat with the person and set plans for how he can get and stay on track.
Also see if you can identify any other factors, personal or otherwise, that may be causing the person to come up to speed slowly. It could be that he simply needs more care and attention from you (coaching).
In the end, if the person is well below the minimums and you can’t come up with a reasonable reason why, it may be time to part company. Time to fire.
Firing someone is never easy and certainly never pleasant, but it is a business necessity if you are to develop an effective sales team.
If you decide to do it, do it fairly, do it quickly, but do it. You can’t afford to have poor performers on the team.
Don’t just hire and forget. It’s important to keep a close eye on your new hire to ensure that he or she comes up to speed and becomes a productive team member.