For fast-moving sales teams, the time it takes to hire SDRs, BDRs, and other inside sales professionals often feels too long. When your team is aiming for ambitious sales goals, waiting through the recruiting and onboarding process means leaving opportunities on the table. How long do sales teams take to add new members?
How much time does it take to hire a new sales rep?
According to a survey of more than 300,000 interview reviews conducted by Glassdoor in 2015, the average interview process takes almost 23 business days in the U.S. Recently, that number has increased dramatically – some organizations report that hiring can take up to 11 weeks. Fortunately for sales teams, their hiring processes tend to move more quickly. For organizations in the business and professional services industries, the average time to hire is 25 work days.
How much will it cost to replace a sales rep?
Sales representatives’ salaries typically range from $25,000 to $64,000. Let’s say you lose a team member whose salary falls in the middle of that range at $44,000. You have a solid benefits package, and that costs 31% of the salary. Fortunately, you have a strong internal recruiting team, and they’re confident that they can find a great new team member in 30 days.
However, two of your sales team members are going to have to pick up the slack and work ten hours of overtime each week for the next three weeks. You’re also going to need a freelancer to help you wrap up a few projects the team member was working on.
Let’s break down the cost of the vacancy:
Annual Salary: $44,500
Daily Salary: $44,500 / 261 = $170.50
Salary Savings: $170.50 x 30 = $5,114.94
Benefit Savings: $5,114.94 x 0.31 = $1,585.63
Total Savings: $6,700.57
Overtime: $31.25 x 10 x 2 x 3 = $1,918.13
Freelancer: $5,000
Total Workload Costs: $6,918.13
Cost of Vacancy: $6,700.57 – $6,918.13 = -$217.86
That cost doesn’t seem too bad – it’s only a few hundred dollars! However, this is only the cost of the vacancy. Fortunately, your stellar recruiting team kept their cost per hire below average – it comes in at $3,000 for this new team member. Your new employee needs a new computer before they can start; you find a great deal and get them a good set-up for $1,000. This new sales representative is smart, too, and only needed 32 hours of training before starting outreach. At $82 per hour, you’re looking at $2,460 in training costs.
You’re also thinking about lost revenue. Your last rep was consistently closing new deals, generating an average of $10,000 in monthly recurring revenue for the company. Six weeks after their departure, your new sales rep is still working toward their first close.
How much did this sales representative’s departure cost?
Cost of Vacancy: -$217.86
Cost per Hire: $3,000
Cost of equipment: $1,000
Training cost: $2,460
Lost revenue: $15,000
Total cost of replacement: $21,242.14
How much time does it take to build an outsourced inside sales team?
Outsourcing inside sales may sound like a challenge, but the right partner will make it simple. Bandalier’s outsourced inside sales teams launch in a matter of weeks. Contact us today to learn how we can help your sales team scale faster.
The data above comes from our free whitepaper, “Costs of Unexpected Change: Turnover in 2023”. Complete the form below to download your copy today.
