Quarterly Sales-Index-Q1-2015

Firms forced to compromise as vacancy growth threatens revenues

Quarterly Sales Index

Having peaked in the middle of 2014, sales vacancy figures remained in positive territory in Q1 2015, showing 3.2% growth. While vacancy numbers slowed slightly, demand continued to outpace supply, and candidates remained firmly in the driving seat.

As the growth in sales vacancies accelerates revenue leakage, today’s sales leaders have decided to compromise to get talented reps on patch.

In the race to fill vacant sales positions, UK firms are more willing than ever to compromise – on experience, sector knowledge and indeed salary. But, according to the latest data from BMS Sales Index Report, only 1 in 10 are prepared to sacrifice the ‘sales DNA’ of their candidates.

Firms forced to compromise as vacancy growth threatens revenues

An undersupply of talent is having a considerable impact on businesses’ top line, with 58% losing

revenue due to unfilled sales vacancies, up from 28% in Q2 2014

Chart One: % of firms losing revenue due to unfilled sales vacancies

28%

47%

58%

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70%

Q2 2014 Q4 2014 Q1 2015

This undersupply of talent is having a considerable and growing impact on the top line. Back in Q2 2014, just 28% of firms said they were losing revenue due to unfilled sales roles. That number increased to 47% in Q4 2014. It rose again in Q1 2015 with some 58% of sales leaders commenting they had lost revenue because of their inability to fill sales vacancies.

In the first analysis of 2015 sales recruitment trends, the BMS figures indicate that UK companies have grasped the implications of today’s candidate-driven market: that they are no longer in control, and it’s costing them money.

All of which, of course, has injected a greater sense of urgency into recruitment strategies.

1| BMS Quarterly Sales Index - Published April 2015

Figures from the Q1 2015 Index show a dramatic shift. The majority of firms (48%) now have just two recruitment processes. The number of firms operating one to two stages has doubled, while the number operating four or more fell from 24% to just 11%.

BMS Quarterly Sales Index

Compromising on criteria

It’s logical to conclude that as competition for the best people becomes ever fiercer, sales leaders are reacting by streamlining processes to get talent on board and off the market fast.

With firms losing revenue, employers are compromising on recruitment processes, candidate criteria and salary to ensure

vacancies are filled

The BMS data also indicates a wider trend of employers taking action in regard to their recruitment strategies. As we see in chart three, in an attempt to reduce the number of unfilled sales vacancies, firms are injecting a greater degree of flexibility into their recruitment criteria.

Chart Two: Number of recruitment stages 2014-2015


Back in 2014, around three quarters (76%) of all firms undertook at least three or more stages, while 71% required candidates to attend three interviews. Added to this, almost half (47%) require an initial telephone interview, and nearly a third (35%) require some form of psychometric evaluation.

1%

23%

52%

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8%

3%

45%

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1 2 3 4 5+

2014 2015

61% of respondents would now sacrifice market and product knowledge to get people on patch. 52% would consider more junior candidates, while some 43% would increase salary to secure better candidates.

Despite recruitment processes having been in the spotlight for some time, discussion appears to have turned to action in Q1 2015. The growing revenue leakage and corresponding sense of urgency to ‘get recruitment right’ seems to have resulted in a reduction in the number of recruitment stages for those firms surveyed for BMS. We know from analysis of previous indexes that the best salespeople are rarely on the market for long. Shortening recruitment would therefore seem a sensible option.

Recruitment gets quicker in 2015

These are not just problems of recruitment, but of retention. New business teams can be hit as experienced consultants move naturally into account management roles. Similarly, the dearth of sales managers can also be a product of requiring high earners to move from lucrative commission-based remuneration to salaried positions.

However, despite the enthusiasm of the majority of firms to compromise their criteria, some respondents chose to wait for the ‘right’ candidate.

This dichotomy perfectly illustrates the challenges of today’s sales recruitment market. With so many unfilled posts, firms are choosing to select individuals with innate sales skills then trusting in the quality of their training programmes to add the required market and product knowledge.

Where are the talent shortages?So where are the recruitment problems? The straightforward answer is “everywhere”, although it’s not quite as simple as that.

On balance, only junior internal sales roles were considered easy to fill. Between 79-88% of firms experienced some degree of challenge when recruiting for other roles – with the main problems areas being new business and sales management, as we see in chart four.

Hardly surprising then that firms have taken steps to simplify recruitment, liberalise search and selection criteria, and to improve employer brand (something 78% of firms have done to attract talent).


Chart Three: Steps being taken to minimise the risk of unfilled vacancies Q1 2015

4%

26%

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Sacrifice 'sales DNA' tomaximise market and

product knowledge

Sacrifice some marketand product knowledgeto see candidates with

better sales skills

Increase salaries tosecure a candidate with

better skills / marketknowledge

Consider more juniorcandidates and invest in

developing theirexperience

Develop a graduatestrategy to 'grow my

own' talent

Wait for the perfect fit,even if it means having

a vacant territory

This is by no means happening across the board. As we see from the data, some 40% of firms remained wary of recruiting the ‘wrong’ person, and seemed perfectly willing to wait and accept the financial losses of vacant territories.

The right approach is, of course, dependent not only on the availability of skilled salespeople, but on role, salary, market, location and a hundred other factors.

The crucial point however is that while some prefer to wait, all have recognised the changing nature of the recruitment market, and the majority are more willing than ever before to make some compromises in favour of filling vacancies.

Therefore attracting sales managers may mean compromising salary caps or adjusting bonus payments to secure the best people. It could also mean a compromise between actual management experience and potential. Similarly, bringing in proven new business people from other markets may make sense – despite their lack of knowledge of specific product lines.


Ultimately, being flexible is likely to open up a wider talent pool.

Ever since the emergence of the candidate-driven market a couple of years ago, the issue of salary hasn’t been far from the surface. Over that time, sales leaders have consistently commented that salary expectations were too high in the current climate. They do so again, with a steady 61% of respondents agreeing that this was the case in Q1 2015.

Asked whether respondents would “gazump” top talent by offering higher salaries than their competition, the answer was a firm ”yes”. As we see in chart five, 61% of firms would pay more than their competitors to secure the best talent.

But, and it’s a big one, there is some sign that while employers certainly perceive expectations are too high, many appear willing to pay the price… at least for the best people.


Very Hard % Reasonably Hard % Quite Hard % Not at all

difficult %

Internal Sales (Jnr) 5 23 18 54

Internal Sales (Exp) 14 42 23 21

New Business 28 42 18 12

Account Management 17 43 22 18

Sales Management 21 45 22 12

A shift in approach to salary

Chart Four: How challenging do you find it to attract people to the following roles?

Chart Five: If you were aware of the salary levels of your competitors, would you pay more to secure the best talent?

No 39%

Yes, 61%

This willingness to enter into a bidding war for top talent marks an interesting and potentially difficult development for recruiting organisations. Either employers compromise and offer those salary levels (that they consider to be excess) or they lose the best people.

This isn’t the whole picture. As chart six confirms, many employers are unaware of the real reason for losing candidates at interview. Similarly, while chart seven shows 43% of firms believe their salary levels compare with their competitors, this is mainly anecdotal and related to ‘gut feel’ rather than a dispassionate analysis of salary levels in the various roles and industries. Certainly, the 20% ‘don’t know’ figure appears low.

However, if we assume these figures offer an accurate representation of employer knowledge then the growing power of the candidate puts the 25% who pay less in an even more challenging position – forcing yet more compromise on recruitment criteria.


The index data bears this out. As we see in chart six, the major reason why firms missed out on candidates changed in Q1 2015. Offers from existing employers looking to retain their best staff were superseded last quarter by offers from other competing employers.

This may sound like a semantic difference, but it indicates that salespeople are no longer going through a process to encourage a better package from an existing employer. Rather they are actively looking to move and the best candidates have a number of employers competing for them.

Chart Six: Reasons for missing out on candidates Q4 2014 – Q1 2015

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Counter offer fromthe existing employer

Offer from anotheremployer

Long recruitmentprocess

Unable to meetcareer aspirations

Unable to meetsalary expectations

Unsure of the realreasons

Q4 Q1

Chart Seven: How do salary levels compare to your competitors?

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Don't know Higher Lower Same

Q4 Q1



We know from past Indexes that sale leaders in particular are keen to get involved in the process, so there is cause for optimism.

The best approach is a collaborative one – with sales and HR working even more closely together. And not just to agree suitable (and realistic) candidate criteria, but to address potential stumbling blocks in the process.

Indeed, back in Q3 2014, the BMS data indicated 86% of sales leaders felt injecting more time and energy in recruitment partnerships was important – whether that be with their own internal teams or with partnerships with external agencies.

The opportunity for cooperation between sales leaders, HR and external agencies is therefore crucial to addressing today’s ever more challenging recruitment landscape.

However, it would appear less good news for internal relationships between HR and sales leaders. Just 64% of respondents to the BMS survey felt HR and sales teams cooperated effectively in the first quarter of the year – down from 82% in the last quarter of 2014.

Ultimately, this growing awareness of sales recruitment challenges, the acceptance of the revenue knock-on of rep-free territories, and increased willingness to compromise (either on process, experience or remuneration), is a positive step forward in securing top talent.

Recruitment relationships under pressure

This apparent frustration between the departments is undoubtedly a symptom of the pressure felt in all quarters to find and secure the most suitable candidates. Salary is a clear issue, as we see from responses to the survey:

Uncompetitive salaries are causing frustration amongst sales leaders looking to hire - but 43% are planning to increase

salaries to tackle this issue

Similarly, we see frustrations with internal recruitment processes:

“Our basic salaries and benefits are not good enough to attract sales talent” Sales Manager, Retail & Logistics.

“The salaries we offer are competitive but not head and shoulders above other employers. This creates a problem when trying to attract sales talent”

Sales Director, Business Services.

“Identifying people with the relevant skill sets, industry knowledge and then asking them to complete our extended recruitment process [creates a

major challenge]” Sales Leader, Construction.

Collaboration with internal or external recruitment partnerships is vital for securing

the best sales talent in this market - just 64% of sales leaders felt HR and sales

teams cooperated effectively in Q1

It’s crucial they do because demand shows little sign of slowing down. But if there’s one thing this Index does show, it’s that while leaders will compromise on many things, sales DNA isn’t one of them. Firms still want talented salespeople able to close deals, and they’re paying to get them.


Looking aheadSo what does this quarter’s BMS Index tell us? Certainly that as sales vacancies continue to rise and territories remain unstaffed, firms are continuing to pay the price.

Candidates are therefore in high demand, which pushes their price up. And rather than salary expectations being too high, they are at a level that many employers in the market will pay.

As we see, those that can’t or won’t pay have to compromise in other ways – on recruitment processes, candidate experience and market knowledge.

For those unable or unwilling to increase salaries, compromising on recruitment

processes and candidate experience will be essential for securing the best

sales talent in 2015

About the Index

This report is compiled from a variety of sources including vacancy data, candidate salaries, client survey information and specific sector reports. As a business, we interview over 500 sales candidates per week, speak to 2,000 decision makers and have a national presence with 7 offices throughout the UK. This gives us access to a wealth of regional and national data, information on candidate salaries and job expectations, and insight into the challenges facing decision makers. The Index is produced quarterly and provides organisations with a good barometer of trends in the UK sales recruitment market.

About Us

We specialise in recruiting and training high-calibre people across the UK, Ireland and Australia. Our network of offices gives us strong local presence and allows us to support a long list of blue-chip clients who view us as partners they can trust.

We have grown to become a leading force in our field, placing more people than ever before. But we haven’t let our standards slip. We take the time to get to know you, your business and the type of people you need. We tailor our services to ensure the right recruitment solution for your business. In short, we make things run smoothly and produce results.



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Quarterly Sales-Index-Q1-2015