Hiring a New Sales Manager: Promote or Recruit?

Hiring a New Sales Manager: Promote or Recruit?
June 23, 2016

Hiring new sales manager, promote or recruit

If you’ve ever been part of hiring or training, you know that successfully onboarding a new sales manager is far more challenging than bringing in a new sales rep. The all-too-familiar problem? A stellar sales rep gets promoted into a manager role, only to flounder. But why? Whether it’s lack of managerial training or management skills, the A-player rep is suddenly a B-minus manager. (If you’re lucky.)

During a recent Sales Management Association webinar, this question was raised:

Should you “make” or “buy” sales managers? Develop from within or hire from outside the company?

Before we attempt to answer whether managers should be internal or external hires, it’s important to note there is no right or wrong answer. Common sense tells you that strong sales managers can come from anywhere. The same goes for poor-performing managers.

But there are trends showing that hiring sales managers from within is more common – and perhaps more detrimental to a sales team’s health.

Let’s look at statistics from SMA’s new sales manager training research report:

  • On average, 71% of newly hired sales managers are promoted from within a firm. (This is lower for firms with fewer than 300 sales managers.)
  • Among firms who rate sales manager turnover “satisfactory,” annual turnover is actually 17% -- meaning nearly one in five sales managers will leave their jobs.

A quick Google search on the topic of promoting sales reps yields blog after blog dating back to 2011, warning about the repercussions of advancing your best sales reps into manager positions. Yet, five years later, 7 in 10 managers are still being promoted from sales rep roles.

“There are many factors that influence companies to promote their sales reps into sales management positions,” says Sales Readiness Group’s Managing Director Ray Makela. “Sales reps are already familiar with the company and industry, their performance is known in terms of their ability to deliver (as a sales rep) and, often, retention and career progression play a role as organizations seek to retain the best and the brightest people.”

Makela, who has published several posts on this topic, believes the crux of the problem is that the responsibilities of a sales manager are fundamentally different than those of a sales rep.

What criteria are you using to hire a new manager?

Here’s a lose-lose situation brought to you by Marshall Solem, Managing Principal at ZS, a leading business services firm. You promote a sales rep to sales manager, only to find you’ve just made two mistakes: gotten rid of a great rep and ended up with a crummy manager.  

“All great reps aren’t going to be good managers,” Solem reminds us. “Average reps who are maybe just getting to quota could be great managers.”

So, the criteria you use to identify a good sales manager is critical. If you’re contemplating hiring from within, here are a few considerations:

  • Can this candidate adapt well to change? Can he effectively manage change?
  • Does the candidate possess a team mentality? Will he act as the coach and motivator the team needs?
  • Does this candidate understand our company processes and follow them thoroughly? (Reminder: Just because someone is a star sales rep doesn’t mean they follow the correct processes.)
  • Would other sales reps naturally consider going to this person as a peer mentor?
  • How well does this person know our products?
  • Does this person have influence?

Related Article: Hiring the Empathetic Salesperson: Nature + Nurture

The key to a better sales manager is better sales training

One thing is clear for all sales managers, regardless of their previous gig: They need to be trained well and properly onboarded into their new role.

“The skills that made the rep a sales star do not automatically translate into what is needed of a frontline sales manager,” Makela said. “Organizations often promote reps for the wrong reasons and don’t give them the training, tools and resources needed to be successful.”

Data shows that supporting sales manager development pays off –companies that do saw a 14% advantage in exceeding sales objectives over companies that did not.

To see if your sales manager training stacks up, get your free copy of Sales Management Association’s latest research report.