One of the most significant costs to a company can often be the employee turnover in the sales department. This is can be costly because the success and quality of the sales organization has a direct impact on top line revenue. There is always going to be some level of turnover, but if there is something that a company can do to decrease employee turnover, there can be strong financial benefits.

Employee turnover in the sales department creates two different types of costs for a company: direct costs and indirect costs. The direct costs are the hard-dollar expenses that are incurred when sales resources are recruited, hired, trained, and terminated. These costs can be tracked and will typically show up in financial reports.

The indirect costs that a company will see are in the form of opportunity cost. This cost is all of the business that is lost or missed while sales positions are open due to turnover and then while new sales resources are being trained and ramped up. This cost can be a tremendous amount, especially when you factor in recurring revenues that are missed for future years. Unfortunately, opportunity cost can be difficult to truly measure and will not show up in financial reports.

The main cause for employee turnover in the sales department is poor sales performance. Either sales resources are not performing at a high level and not making the money they want to be so they chose to go somewhere else where they feel they will be more successful. Or the sales resources are not performing at a high level and management determines that a permanent change is necessary in order to drive better sales results. This is how sales coaching can help as it can improve sales performance and that alone can decrease employee turnover.

Sales coaching will decrease employee turnover by working with sales resources on an ongoing basis to help them to perform at their optimum level. Coaching will help bring clarity to sales resources with where they are in terms of attainment, identifying what they need to do to be successful, and then help them with dealing with challenges and hurdles as they occur. Sales coaching will help the sales person to be more successful than they would be if they were completely operating on their own.

By being able to decrease employee turnover, the company will stand to retain a tremendous amount of knowledge. This includes knowledge on company information, processes, products, customers, etc. By being able to retain this knowledge, the company will stand to perform better in the area of sales effectiveness, which will decrease the amount of business lost or missed driving down opportunity cost. In addition, the cost to replace this knowledge can be tremendous in terms of both time and money. This is a hard-dollar cost and to decrease employee turnover will yield immediate savings.

Sales coaching can be provided by a company’s internal sales management team or it can be provided by outside coaching professionals. The benefit of outsourcing the coaching responsibility is that outside resources will likely be trained in the area of coaching and will have experience that can be leveraged. In addition, if the internal management focuses on more strategic activities, there can be a better return on investment for the way their time and attention is spent.

Michael Halper has a passion for coaching individuals toward personal and professional development. For more information about coaching and development visit Compass Coaching you can read more about Decreasing Employee Turnover or Sales Coaching.