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Now this is a hot one. Sales staff turnover. This little number will tell you volumes about a company and its sales staff. So what is turnover? Turnover is typically represented as the percentage of the sales staff that leaves a company each year. For example, if a company has 100 salespersons and 17 leave in a given year then they have a 17% turnover rate. The higher the rate, the greater the concern should be for the sales manager and salesperson alike.

What is an average turnover rate for the sales department for most companies? As you can imagine that varies a lot by industry. Transactional sales type environments normally have higher turnover rates than relationship or consultative sales environments. I’ve worked for companies with turnover rates that are less than 10% and for others that were greater than 50%. Generally speaking an average would probably be around 20%. A 20% turnover rate means that the average salesperson had been there five years.

Can you have a turnover rate that is too low? Yes. A sales position is only a temporary position at every company. How effective can your sales staff be if the average person has been there 20 years? Some turnover is good for a company, and can be good for the salesperson that leaves too.

What some companies do to make their turnover rate look better is to count multiple changes in a sales position within one year as only one. For example, if during one year there were three different salespersons in a sales territory they would count it as just one. This happens because they only look at sales position changes once a year and note it as only one change. Bottom line, most companies under represent their turnover rates.

If you’re a sales manager and your turnover rate is substantially higher than 20% then you have problems whether you want to admit it or not. The problems could be coming from many different sectors. If you are a job applicant always be sure to ask what the turnover rate is in the sales department. If it’s high I can almost guarantee you there are problems. If they won’t or can’t tell you the number I can absolutely guarantee you there are problems.

Tags: turnover

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