How a Hiring Freeze Promotes Mediocrity

How a hiring freeze promotes mediocrity:

Vice President of Sales: “I know his is a terrible sales manager, but I can’t get rid of him.”

Consultant: “That doesn’t make sense to me. Why can’t you fire someone who is hurting your business?”

VP of Sales: “We are in a hiring freeze and I don’t know if I can replace him.”

Our role is to observe our clients in action, and share the observations with recommendations to improve. We also help execute on the recommendations and drive behavioral change. Yet we sometimes run into walls. The walls can be cultural, political, or ego driven. None the less, they are sometimes more difficult to scale than walls of concrete.

The breadth and depth of non-performers goes well beyond the immediate. Hiring and keeping a non-performing sales person can lead to millions of dollars of lost opportunity. The losses are rarely limited to cost of the employee’s compensation.

Example:

A sales person is hired to build a territory to $2.5 mm. She/he is paid $100,000 in salary with another $100,000 in available commission/bonus based on performance. The sales person turns out to be the wrong hire. They damage relationships with current customers, and lose potential deals with new prospective customers.

How much does it cost you? Potentially, it could be millions of dollars.

Now multiply the losses by having someone who touches more than just his/her individual customers. Imagine this is a manager working with 8 sales people. What does that cost?

A hiring freeze certainly has its place in business. It can be a short term fix for expenses, but it drives a longer term challenge. It promotes mediocrity in the team by not allowing action on non-performers. In this case, it may have been a misinterpretation of the policy. Maybe they can replace an existing person. But lack of clarity around the issuance of the policy is just as damaging.

We suggest you carefully watch expenses and in the right situation, move on non-performers and replace them with producers. If hiring and developing producers is at the forefront of your leadership team, perhaps hiring freezes wouldn’t be necessary.

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