There is an all-too-common perception of a company’s people team being a cost center. Leaders who continue to hold that mindset clearly don’t understand HR’s functional impact. More importantly, despite their lip service, they fail to see smart people strategy as a source of competitive advantage.
Now, by the sheer fact that you’re a TLNT reader, you don’t need convincing on this point. Chances are, you can rattle off a few examples of the impact of people programs. In fact, we’ll mention some for you right now:
- Clif Bar, known for investing heavily in people, has a staggering 97% employee retention rate. Their healthy bottom line is no doubt benefiting from avoiding the resource suck of turnover.
- More than 75% of Walmart U.S. operations management started as hourly employees. In fact, the retailer’s CEO, Doug McMillan, started his Walmart career as a cashier in high school.
- Enterprise Holdings’ (i.e., Enterprise Rent-A-Car) CEO Pamela Nicholson and COO Christine Taylor started their careers in the company’s robust early-career development program.
Point is, the right investments in people (or lack thereof) can change the long-term success of any business. Indeed, we were recently inspired to compare notes on our experiences related to companies’ intentional actions and self-inflicted wounds. In doing so, we revisited the excellent ELTV (Employee Lifetime Value) work by Maia Josebachvili, the former the VP of strategy and people at Greenhouse.
To summarize the model, there are four distinct phases of the employee lifecycle — (1) hiring, (2) onboarding, (3) management and development, and (4) management and culture. By investing in each, you’ll increase how high and how far employees (and your business) can go.
When you don’t invest properly in people, they leave, and that can be quite costly. While mishiring is a convenient excuse for people departing, organizations shouldn’t ignore what they could have done differently to get people going higher and further. (We’ve seen many underperforming salespeople at one company become top performers at another.)
Consider the crew that “Action” Jack Barker brought in to sell Pied Piper’s product in Season 3 of Silicon Valley. As we meet the new sales team, we see that they’ve been onboarded without meeting Pied Piper’s founder, have little knowledge of what they’re supposed to be selling, and don’t know whom they’re supposed to be selling to.
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That might seem like an outlandishly comedic scenario, but alas, it’s one of those “it’s funny because it’s true” situations. We’ve seen dozens of organizations — often fueled with venture capital and/or high expectations for rapid growth numbers — assemble large, expensive sales teams before there was much of a plan in place. They simply hope that a few reps can just…figure it out.
By reframing common sales challenges as opportunities to invest in people, an organization can stop accepting turnover as the status quo. Here are a few places to start:
- Which sales positions require you to conduct hiring exercises/assessments? If you only do these for senior sales staff, therein may lie a problem. No position is too junior to justify a thoughtful homework assignment. Your people team can partner with sales managers to develop time-efficient exercises that properly assess candidates’ key competencies within the interview process.
- Is there a sales-specific referral program? It’s not uncommon for these to exist only for harder-to-fill roles — which is a huge miss. Given the cost of getting a single hire wrong, paying existing sales members to recruit their network is low-hanging fruit to take advantage of. And with their own reputation on the line, referrers will be invested making the referred employee successful. A well-designed bonus program will offer both a fast reward shortly after hire and a later “thank you” when the long-term fit has been proven.
- How many sales managers know how to interview properly? Whatever your answer, how do you actually know that your answer is accurate? It’s critical that all hiring managers have effective interviewing skills. A sales manager won’t object to an offer of a role-play from their people partner if it’s framed as a mutual learning opportunity to hire more effectively.
- Does the onboarding process accommodate different learning modalities? A common misstep is presuming that everyone learns the same way, via the same medium, at the same speed. For example, for an auditory learner, it’s important to provide a new employee opportunities to shadow sales calls. If a new hire is a kinesthetic learner, a manager will need to prioritize role-plays and mock exercises. A strong people partner can make that blended learning plan come to life.
- What are managers responsible for during a new hire’s onboarding process? If a manager expects “HR” to take care of all onboarding, it’d be a bit like parents outsourcing parenting entirely to school teachers. There should be a healthy partnership, but there’s also a subset of interactions/activities that a direct manager who has the 1:1 relationship will always be closest to, and another set of success enablement where there’s more scale and where a people partner can lean in. For instance:
- A direct manager can set clear, measurable expectations for what “good” looks like in a particular role.
- The people partner can help ensure that the new hire gets every bit of context they need on how departments engage and interact. This helps clarify how and why this organization makes an impact that’s greater than the sum of its parts.
Management & Development
- Sales leaders know all about performance improvement plans (i.e., the dreaded plan folks go on when underperforming), but what about an individual development plan? Without a proper skills assessment and development strategy, people are being managed to an invisible line. A strong people partner can help study and document what star performers have done, making that line very visible and increasing the chances of hitting it.
- How many of the sales managers have had management training? In most sales orgs, individual contributors are promoted to management, and it’s usually their first foray into people management. Manager training should be framed as a reward, an investment in the new manager’s future success. They need it, and their team needs them to know what’s expected of a leader in your organization, so why not frame it positively!
- How often is feedback provided? If managerial feedback is reserved for annual reviews, you’re already a decade behind the best organizations. A strong people partner will provide easy-to-use infrastructure for that steady feedback, framing it as a path to reinforcing success and an early-warning-system for sliding performance, not as a burden the manager must endure as the price of being a manager.
Management & Culture
- Commissions can be very motivating, but are you treating sellers as though they’re entirely coin-operated? If you align some rewards very directly to adherence to behavioral norms (around your company’s core values, for example), you’ll nourish and grow sellers’ better collaboration angels.
- What is the average retention rate across sales managers/teams? Study what isn’t working and what is in various teams. Then scale best practices in partnership with the highest performers. A people partner as a sales culture anthropologist can add breakthrough value.
- Does the organization conduct exit interviews? In sales, the insight gleaned from them is invaluable, especially when high-performers are leaving. And if sellers are expected to do post-mortems on why pitches didn’t land, they’ll get the macro-logic of needing to analyze why a sales career in your organization didn’t land.
The cliché is true: Take care of your people, and they’ll take care of your company and customers. But part of taking care of your people properly demands that people leaders demonstrate the outsized impact of their function.