Quantifying the opportunity cost of an unfilled requisitions is usually difficult. Not so for sales roles. Getting a good estimate of the opportunity cost of your unfilled roles is simple:
Multiply the average daily output per salesperson by the number of days a role remains unfilled.
Of course, every salesperson is unique - and you should make every attempt to hire salespeople that outperform the average. But when it comes to evaluating lost opportunities, hypotheticals are not very helpful.
In this article we’ll look a strategy to earn back that lost revenue through the lens of one of America’s largest car dealerships, Sonic Automotive.
Benchmarking Where You Should Be
In America, it takes an average of 40 days to fill a sales role.
If your time to hire is above that, you should consider re-evaluating the way you hire salespeople. If your time to hire is lower than that, great! But there’s always room for improvement.
How Sonic Gained $10 Million+ in Yearly Profit Potential
Prior to reimagining the way they hired car salespeople, Sonic Automotive’s Time to Fill was an unwieldy 75 days.
Since busy managers were in charge of sourcing and interviewing (car dealerships usually do not have in-house recruiting staff), applicants were left in their ATS, uncontacted, for long periods of time. In most cases, hiring managers were so backlogged the only applicants interviewed were referrals.
After they implemented a hiring process built on video interviewing, that number dropped to 45 days - a 40% decrease in Time to Fill. (As more dealerships adopt the new process, that number should decrease even further.)
Rather than waiting on a hiring manager to review their application, Sonic’s applicants are invited to take an OnDemand video interview and assessment. Candidates that score above a certain threshold are sent to hiring managers for review. Since hiring managers can review the interviews whenever they have a free moment - rather than comb through an ATS - they can identify and call in the highest potential candidates for an in-person interview.
The decrease in Time to Fill alone accounts for over $10 million per year in profit potential. Here’s how it breaks down:
- Sonic estimates that the average daily output per salesperson is $500.
- They hire around 800 Sales Associates per year.
- They reduced the time sales positions were left empty by 30 days.
$500 x 800 roles x 300 days = $12,000,000 in yearly profit potential.
$10 million is being conservative.
Translating Sonic’s Success
To hire sales talent quickly (and avoid the costly days the role remains unfilled) you need to give hiring managers as much information as possible, when they need it. When Sonic’s hiring managers view a candidate, they’re looking at three different pieces of data:
- Video interview.
- Assessment score.
Rather than handing hiring managers a resume (or a few notes from a phone screen), give them more tangible data to work with. This could be a recorded video interview, an assessment score, or even a glowing referral - just give them the information they need to make informed decisions quickly.
Measuring Competencies that Matter
There’s more to filling sales roles than putting warm bodies in seats. It goes without saying that great salespeople have a huge impact on a firm’s bottom line. While past sales success is a solid indicator of future sales success, it is by no means a guarantee - every sales organization is different.
You need to see how a candidate will interact with your customers, not the customers of their previous employer.
How Sonic Automotive Cut Turnover and Increased Sales Performance by 20%+
In sales, performance is inextricably connected with retention. You cannot float by on the bare minimum in a sales role.
Sonic’s solution to the car sales industry’s high rate of turnover is remarkably simple: hire the best people. Top salespeople constantly reap the rewards of their success through increased commissions, accolades, and reputation. Why would they leave?
Hiring managers identify the best candidates because they have insight into the traits that mattered: personality, passion, and communication skills. Since every candidate responds to the same job-relevant questions (Sonic asks situational judgement and past experience questions, like “Tell us about a time when you collaborated with others to determine course of action to achieve company goals”), it is easy for hiring managers to find the best-fit candidates for their dealership.
As a result, sales associates hired through HireVue sell two more vehicles per month than those hired through other methods. With an average car salesperson’s quota sitting around 10 vehicles per month, that’s a 20% increase in revenue per hire.
Sonic’s Strategy for Sales Recruiting Success
Sonic’s strategy can be broken down into three distinct elements, all of which are applicable when hiring for any sales role:
- Give hiring managers the information they need. Sonic gives its hiring managers three different sources of data to work with when making hiring decisions. Put managers in the position to make decisions based on data, not intuition.
- Make decision-making easy and flexible. Sonic’s hiring managers view OnDemand video interviews at the time that works best for them, so they can move quickly on the best candidates. Avoid bottlenecking the hiring process with too many time-sensitive steps.
- Measure the competencies that matter. The job-relevant questions in Sonic’s video interviews elicit responses that give insight into the traits that matter for success. Identify the most important traits for success in your salesforce and build questions designed to highlight them.
With the right strategy, you don’t need to sacrifice the quality of your new hires for the speed you hire them with. Sonic provides a perfect example of how it is possible to increase hiring efficiency across the board, so long as the strategy you implement is built to quickly identify the best candidates.