Monday, June 10, 2019

How Much Does a Bad Hire Sales Rep Cost the Modular Factory?

Yes, there really is a skilled labor shortage in the US and finding the right modular factory sales rep to fill an open slot probably means you’ll be choosing from a limited pool of inexperienced, unqualified and ‘fired from their last job’ candidates.

What you probably didn’t know is how much a bad sales rep can cost you. According to the U.S. Department of Labor, the price of a bad hire is at least 30 percent of the employee's first-year earnings.

That assessment might be accurate in the retail arena but for a small modular home factory, a five-figure investment in the wrong person is a threat to the business.

After interviewing the candidates and choosing one as your next factory rep you have to train them to understand your company philosophy, how the behind the scenes operations of the sales department works, what happens to orders both in the process and the production, how to work with your builders and what territory they will get.

In most factories that process could take up to two full days and might include a couple of ride-alongs with another sales rep. That should be enough to train any inexperienced or unqualified new hire! A ‘fired’ sales rep probably won’t hear anything you say anyway so you might as well just let him/her loose on your existing builder base.

What could possibly go wrong?

With little or no official training program in place the inexperienced and unqualified new sales rep will be calling everyone from the sales manager to the engineering staff to purchasing and all the way down onto the production floor to get answers.

Forcing them to ask questions of others instead of having them answered in a formal training program tends to irritate your other employees who get questions about even the simplest things giving them the impression you hired a real numbskull that will never learn how to do anything.

And as an added side effect this new sales rep just might destroy employee morale, create problems with your builder base and at the end will simply just slack off hoping to continue to draw a paycheck just long enough to find a job at another modular home factory who thinks they are getting an experienced sales rep.

The damage this $30,000 a year new hire could do in their first year could easily exceed $100,000. Builders may not work with your factory any longer simply because their new sales rep screwed up their orders being the major reason for you losing money.

I’ve worked for several modular factories in my career path. One sales manager told me to shadow another of their sales reps for a week. That proved to be informative for the first day and after that the week was spent sitting around talking Nascar and football. He did make a phone calls which I wasn’t allowed to hear and emailed builders that I wasn’t copied. I did learn where the best Chinese Buffet in the area was located.

Another sales manager had me start on the day of their weekly sales meeting. I was expected to learn how things worked by sticking around afterwards and talking with anyone I wanted. At the end of the day I was given my list of existing builders (3) and told to find some new ones. That was the extent of my training.

Your factory may only hire one or two new sales reps a year so why not take some time, sit down and write an outline for a simple training program that will bring this new hire up to speed quickly, efficiently and give your factory a better than even chance of having a great sales rep.

Don’t create even a rudimentary training program and be prepared to be frustrated with your new hire and having them cost you a lot of money before you fire them and they become some other factory’s ‘experienced’ new hire.

Gary Fleisher (the Modcoach) is a housing veteran, editor/writer of Modular Home Builder blog and industry speaker/consultant.


still waiting said...

completely agree with the lack of training being a industry wide problem. I worked for three of them and not even the first sales job when I was right out of college gave me any real training.

It was like digging for gold nuggets every day for almost a year and by then I had some good sales coming in. One of my builders also bought from my competitor and told me they would like to talk with me. They offered me almost twice what I was making. They had no training program either but since I had learned everything on my own they were willing to pay for that knowledge.

Turned out it was a bad move as I made the switch just in time for the 2008 crash and my factory went bust. Today I'm back working as a sales rep for a PA factory. They just hired a new gal as a sales rep and again there is no training for her.

What will it take for them to realize we were not born with modular knowledge installed. It has to be learned.

Anonymous said...

I once worked as a modular salesman and was very independent; I took orders from no one.