Did you know the average outside sales rep has nearly 19 years of experience in sales? That’s an incredible amount of experience, institutional knowledge, and just plain longevity.
So what do we know about these long-lasting professionals? How does their staying-power compare to that of their counterparts in inside sales? And more importantly, what impact does attrition have on business?
In this post, we’re going to explore turnover in the sales industry, and provide some tips on how to minimize it in your outside sales team.
What Is Sales Turnover?
Sales turnover refers to employee attrition on a sales team, or the sales reps that voluntarily leave a role at a company.
While a certain amount of churn is normal and expected, the sales industry experiences particularly high attrition compared to other professions. The average sales turnover rate has been reported as high 35%. By comparison, the average turnover rate for all professions is about 13%. That means turnover rate in sales is three times as high as the average employee turnover rate.
Tenure Of Outside Sales Versus Inside Sales
There’s an important distinction to make here about turnover in outside sales versus inside sales. In our Annual Field Sales Benchmark Report, we explored the state of the sales profession and trends in sales roles. As it turns out, outside sales reps don’t just have long careers. On average, they also stay in their roles longer than inside sales.
Our research showed that outside reps have been at their current company for over for an average of 4.8 years and have around 19 years of experience.
Outside Sales Rep Demographics
There are currently over 1.03 million active outside sales reps in the United States. According to Zippia, the average age of outside sales representatives is over 40 years old, which represents 68 percent of the population. The youngest sales reps represented the smallest percentage of the group; only 10 percent were between the ages of 20 and 30.
Approximately, 70 percent are male and 30 percent are female. The average annual salary is $59,642, with the top 10 percent earning as much as $83,000 or more.
Why Outside Sales Reps Stay In Their Roles Longer
Why is outside sales rep tenure so long? First, it’s a whole lot easier to sell something you know inside and out. When a sales rep spends a long time at one company, they develop a great deal of specialized knowledge about that company’s products. They’re more comfortable talking to customers and they can easily explain the features, benefits, and competitive advantages.
Second, outside sales reps in long-term roles develop deep relationships with their customers. Think of a vendor you’ve been dealing with for years. Maybe you both enjoy small talk about sports, or you both have young children. Touching base with them once a quarter is much more enjoyable than taking a cold call, and if the money is right, you’ll probably buy from them again next year. Sales reps know this.
Third, outside sales reps like autonomy. In general, it’s easy to see how outside sales would appeal to someone who likes their freedom. It’s a career made for people who prefer to be on the move, meeting new people, and not chained to a desk. Plus, a talented outside sales rep who gets results is bound to get more freedom and less oversight.
Pros And Cons Of Long Sales Rep Tenure For The Business
So, is it good for companies when outside sales reps stay put for a long time? Let’s look at the pros and cons.
The pros of an outside sales rep with long tenure:
- Valuable institutional knowledge
- Strong customer relationships
- Intimate knowledge of customer’s preferences
- Knowledge of customer’s decision-making process
- Well-versed in the value and use cases of the products they sell
- Experience overcoming common objections
The cons of an outside sales rep with long tenure:
- More resistant to oversight
- Long tenure doesn’t always translate to high performance
- Potentially higher base salary
- Less open to coaching and training
- Valuable institutional knowledge lives in their heads (rather than in shared systems)
Speaking of pros, one important finding from our Annual Field Sales Benchmark Report was that some more experienced outside sales reps had an advantage after the COVID pandemic struck. Here’s what one survey respondent from our had to say:
“It was difficult for new reps to meet with their customers because they had no prior relationships with them before COVID…Luckily for me, I had years of relationships to back me up.”
This is a strong argument for the benefit of having tenured, experienced outside sales reps on your team. When the unexpected strikes, having reps with strong relationships and years of experience can make your sales department more resilient.
Why High Sales Attrition Is Bad For Business
The cost of losing a high-performing sales rep is nothing to sniff at. The Harvard Business Review reported that U.S. firms spend $15 billion a year training salespeople and another $800 billion on incentives.
To grasp the true cost of attrition, you need to consider a host of factors. For one, finding and retaining talent is one of the most challenging parts of a sales leader’s job. It can take months to fill a sales position, and the task pulls managers away from strategy and important revenue-generating activities.
While a sales manager is dedicating their time to recruiting, that valuable position (and all the earning potential that comes with it) sits empty. Potentially, every day that position remains unfilled is one or more missed sales opportunities.
Even after a rep is hired, going through training and learning the ropes — or in some cases, obtaining required licenses — requires even more time and money. And that’s before the sales rep even begins building client relationships.
These are huge investments. It’s easy to see how devastating it would be to see that time and money spent on sourcing talent, interviewing, and training walk out the door. Then it’s back to the drawing board.
How To Calculate Your Sales Turnover Ratio
In a business with high turnover, a good place to start managing attrition is to know your employee turnover rate.
Your company’s sales turnover rate is the percentage of reps who leave over a specific period of time. You can calculate it by dividing the number of reps who leave your sales department in that period by the average number of employees in the department for that same period of time.
Depending on what works best for you, employee turnover rate can be measured monthly, quarterly, or annually. Whatever you choose, make sure to do it regularly and analyze the results.
Studying this info over time should help you understand the who, what, when, where, and why of your turnover, and how it compares to the industry average.
There are a number of online tools to help you find your rate easily. HubSpot offers a deep dive into different formula options, plus a free downloadable sales employee turnover rate metrics calculator, here.
How To Prevent Attrition In Outside Sales
Considering the high cost of hiring new talent, combined with the value of a strong, experienced salesperson, companies stand to gain a lot by taking steps to retain them. Here’s some tips to help keep your turnover down:
- Set reasonable expectations. If reps feel the company has set impossible quotas, they may become discouraged and feel they have no choice but to leave. Keep goals challenging but attainable.
- Provide opportunities for professional development and advancement. Whether it’s more responsibility, more money, or new challenges, find out what motivates your top sales reps and give them room to grow.
- Have sales competitions. Sales competitions can turn outside sales from an isolating and sometimes tedious job into something exciting. As a bonus, it boosts morale and team culture. You can find some tips on how to leverage sales contests and gamification here.
- Give your team the tools they need to succeed. You know that the sales technology and software available today has totally changed the game, and so do your reps. Invest in systems and software that can help make them more productive and more efficient.
Take Proactive Steps To Retain Your Talent
The average sales rep has incredible longevity, and many of them stay in their roles for a long time. Retaining your strongest outside sales reps long term can have great benefits for companies and sales leaders, saving time and money.
Finding and tracking your sales employee turnover rate can provide useful insights on what causes outside sales reps to move on. This info will position you to take proactive steps to support and personally motivate them in their day-to-day roles.
Looking for more tips? The COVID pandemic demonstrated how one or more tough years of selling can be a stress test for a sales team. Check out our post on how to motivate your sales team out of a sales slump.