The average cost of replacing staff is currently twice their salary. This means that if you have to replace an employee who is on a £ 40 K / year package, the costs of replacing him or her are approx. £ 80 K.*

Why?

Whether you advertise or have to pay a head-hunter, recruitment costs can quickly add up to several thousand pounds.

Vetting CVs, carrying out background checks, getting references, preparing and conducting interviews or perhaps even assessment centres – all costs you a lot of time, and time is money.

New staff is always more expensive than existing staff; someone who is on your company for 10 years is on a lower salary than someone with the same qualification you hire tomorrow.

Rarely do you say “good-by” to one employee on Monday and “Hello” to his successor on Tuesday. Usually there is a gap, and during this gap work remains undone or needs to be done using extra staff like a temp or an interim. Both will incur fees or result into loss of business.

In sales, consulting and any other people-businesses, there is a risk that your leaver will take relationships with him and that you will loose clients, and hence, turnover.

Potentially there might be tribunal costs and compensations.

And finally, you will never know whether it will work out with the new guy. Your chance is 50% that he or she will be equally good or better than their predecessor, and 50% that the new kid on the block is performing worse (and will need to be replaced again, incurring even more costs and leading to even more disruption, friction and loss of business).

Especially in sales, staff turnover is 12-18 % a year,* and if your organisation experiences 24 % staff turnover* (approximately a quarter of all companies do)*, the cost of managing that staff turnover adds another 10% to your overheads* – a lot of (avoidable) extra spent.

So wouldn’t it be great to find out how good sales people REALLY are before you hire them? Salespeople are by nature great in selling themselves, but how do you know whether they will be doing a real good sales job once you hired them?

Wouldn’t it be great to know exactly what buttons to push to motivate your sales staff? We tend to think it’s all about money and forget that money is a “Hygiene Factor”: its presence prevents frustration, but even the highest salary becomes standard over time. Most managers forget that there are many more motivators (thankfully most of them have nothing to do with money) such as

Competition
Achievement
Pace
Social Climate
Recognition
Growth
Autonomy

And would it not be great to have a tribunal proof, objective, external tool for managing out underperformers?

Top performers deliver in average 67 % higher results than average performers.* This can be the difference between £ 100 K of sales and £ 167 K of sales by two people whom you are paying the same salary.

The problems:

How do you objectively measure what exactly makes the difference between average and high performers? How do you attract and keep the best? How do you spot and up skill high potentials? How do you manage out those who will not make the grade? How do you equip managers to confidently manage their team to maximise performance?

96% of companies believe employee recognition helps improve morale and reduce turnover** but how many managers actually lead their employees by motivation and express regular recognition?

Let’s be real: The concept of “Carrot and stick” has in practice long been replaced by the concept of “stick & kick”. That’s why the newspapers and the internet are full of job adverts, that’s why we have topical issues and catch-phrases such as “Competition for talent” and that’s one of the reasons why this country has one of the lousiest customer service levels on the planet.

If UK PLC would motivate and recognize its staff, people would much rarely change jobs, stay longer, gather more knowledge and build better and more lasting relationships with management, peers and customers. Service levels would rise and newspapers and web forums would earn much less on job adverts.

But as long as leading organisations like British Gas or BT proudly advertise with the numbers of customers coming back to them, we are in a fix. How can anyone who is still half sane, advertise with the fact that customers are coming back, and by doing so admitting that they managed to goof big time to loose them in the first place? Probably the only reason they are coming back now is the fact that the competition treated them even worse. I don’t know much about the creative industry but perhaps these companies should fire their advertisement agencies and invest the money they save in customer service training instead.

So what is the solution to this vicious circle?

At the beginning a thorough assessment of not only sales skills but attitude and capacity has to stand. While you can teach technical sales skills to practically everyone, what you cannot teach is a positive, customer-oriented attitude and capacity.

Any findings are of course of no use as long as you don’t communicate them to the management and to staff, so the first step is to take action and the second step is to gain buy-in to that action.

Action means training, and most companies deliver training and leave it there. And that’s exactly why they fail to achieve sustainable change. Somebody once said “Bathing and motivation don’t last, that’s why I recommend it daily”. That’s the big issue with most training. Once its delivered, there is neither a follow up nor a built up nor a brush-up. But even the world’s best trained staff will suffer from awareness erosion over time, forget key learning goals, neglect service details and pick up small mistakes that grow and become hurdles to success.

Only when staff is constantly motivated it will maintain a healthy interest to maintain what was once learned, and the best motivation s recognition. But recognition without the occasional reward goes stale and is being perceived as lip-service, so appropriate rewards need to go hand-in-glove with recognition.

Finally, the results of training and leadership need to be measured and assessed, so new actions can be determined.

There are very good tools available, the currently best one on the market is “Fit4″, an assessment tool specifically developed to assess sales and customer service staff and management.

Only when companies transform their leadership culture top-down towards one that recognises that people are their greatest asset and that investing in training and motivation quickly pays for itself by saving the far bigger costs related to loosing or letting go staff, the vicious circle will be broken. The good news: It can be done, all it needs is a decision, effort and dedication by the management, but then, isn’t that exactly what you expect from your staff?

*Harvard Research

**Employee Recognition Survey conducted by National Association of Employee Recognition and World at Work