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The Cost of Poor Sales Onboarding: 9 Stats That Tell the Story

Oct 26th, 2018

While the first days and weeks of a salesperson’s time at your company are critical, it’s no secret that onboarding sales reps remains a huge challenge for many businesses.

In fact, a 2018 study from the Sales Management Association (SMA) found that 62% of companies consider themselves ineffective at onboarding new sales hires – this despite it being a key focus area for sales enablement leaders.

So why, exactly, do so many companies struggle with sales rep ramp-up? The reasons vary, but they often include some combination of the following:

  • The onboarding process is slow and inefficient
  • The training program structure is largely informal, with most learning being done “on the fly”
  • There is no method for assessing readiness; companies push reps out of “the nest” and hope they can fly
  • There is no formal measurement of sales onboarding efforts or its results
  • Companies over-hire with the expectation that a large portion of new reps will fail
  • Companies over-assign quota, leading to unrealistic expectations for new reps

We also know that the costs of poor sales onboarding are no small matter, especially given today’s tight sales talent market. The damage under-trained reps can do to customer relationships and business reputations is great, but the effects of high sales turnover and missed revenue opportunities are equally concerning.

Several research studies shed light on the effects of poor sales onboarding. Check out 9 eye-opening stats below and see for yourself – or view the video above to learn how Brainshark’s sales readiness platform helps companies onboard sales reps more effectively.

  1. 49% of high-performing sales reps identify the availability of onboarding as “very to extremely important” when considering a new position. [SiriusDecisions]

Effective onboarding is not only important to sales leadership; it’s highly valued by top sales talent!

  1. Only 3% of high-performing sales reps are actively in the job market. [SiriusDecisions]

The battle to land talented salespeople is as fierce as ever, which means companies must improve their ability to train and develop new sales hires from day one.

  1. On average, new sales hires spend 10 weeks in training and development and only become productive after 11.2 months. [SMA]

Echoing the above points: sales onboarding simply takes too long for too many companies today.

  1. The average sales development rep is only at “full productivity” (tenure minus onboarding time) for 15 months, and only 8% of SDRs stay in the role for 3-plus years. [The Bridge Group]

The pain sales organizations feel when onboarding is too slow? That’s only magnified if you rely heavily on SDRs to fill pipeline and qualify opportunities.

  1. On average, it costs sales organizations $97,960 to replace a sales rep. [DePaul University]

From recruiting and training costs to base salary and other employee compensation, replacing sales reps is exceedingly expensive, making it even more important to retain and develop them.

  1. The opportunity cost of sales rep turnover exceeds $100,000 per seller. [SiriusDecisions]

Don’t forget to factor in the revenue opportunities your company could have captured if sales retention were higher.

  1. Turnover is too high in 48% of sales organizations, and 60% consider themselves understaffed. [SMA]

As Brainshark Chief Readiness Officer Jim Ninivaggi writes, too many sales reps are leaving in their second or third years with the company – hurting the “lifetime value” of the average sales hire.

  1. Companies with effective sales onboarding improve quota attainment by 6.7% and reduce voluntary turnover rate. When onboarding is thought to need “major redesign,” voluntary turnover rate increases from 7.9% to 14.2%. [CSO Insights]

This is a huge takeaway. For companies whose sales onboarding programs are lacking, the negative effects are clear. Sales organizations that employ onboarding best practices – such as making pre-learning content available to new hires before Day 1, for example – avoid the costs of poor retention and see better performance from the reps they keep.

  1. Firms that use technology effectively were 57% more effective at sales training and development than ineffective technology users. [SMA]

Sales readiness technology, for example, is one way companies can improve their ability to deliver effective sales onboarding. By allowing teams to create engaging training content, deliver it in a format that today’s on-the-go sales reps prefer, and certify that sellers have mastered relevant material, organizations can avoid the costs of bad sales onboarding and feel confident that new reps are ready to make the most of every buyer interaction.

Want to learn more about Brainshark? Click here to see a demo of our platform.