112,500 Reasons Why Turnover is Bad [Sales]

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By Trey Morris


$112,500 is in flames every single time that you lose a salesperson and have to hire a new one!

Yes, over $112K!

How do you figure that dollar amount? Easy. The average cost of turnover for an employee is 1.5 times annual compensation. So, if your salesperson is earning $75,000 per year when they leave, it will cost your organization $112,500.

So, what if your top salesperson is making $150,000 per year? Then the cost of losing that sales rep and replacing them will cost your business $225,000! So, what is your turnover ratio? 10%, 25%, 50% per year? Then start adding up the cost of your turnover.

How does that affect your EBITA? Cash Flow? Net Profit?

A recent study from Bersin by Deloitte estimates the cost of turnover from 1.5 – 2.0 an employee’s annual compensation. And a report from Maia Josebachvili, VP of People at Greenhouse, argued that retaining a salesperson for three years instead of two, along with better onboarding and management practices, yields a difference of $1.3 million in net value to the company over a three year period.

$1.3 Million?!?!

Yes, turnover is a big deal for your organization. A really big deal.

So, how do you “fix” turnover? Well, it’s simple, but not easy. It’s a process that can take months and in some cases even years to slow your rate of turnover in your sales organization, but here are 5 ways that you can reduce turnover:

Source:: The Center For Sales Strategy