HR leaders will play a major role in success of the Sales 2.0 transformation. But they cannot do it with outdated HR metrics. A recent study by KPMG confirms the challenge:
“55% of HR leaders surveyed believe the metrics that define success in HR today will fundamentally change over the next 3 years.”
The KPMG report describes the new HR metrics needed across the enterprise. But what about new HR metrics for sales organizations? Read this post for guidance on new sales talent metrics; plus a metrics framework. Sales 2.0 transformation efforts depend on HR support to successfully transform human capital.
Old World – Old Numbers
Sales 1.0 organizations rely on traditional HR metrics like turnover rate and cost per hire. These metrics are no longer adequate. They only report history and offer little predictive insight to make course corrections. They are lagging indicators.
For example, the sales metric of “revenue performance” is a lagging indicator. By the time the results are in, it is too late to change the outcome. Contrast “revenue performance” with “sales pipeline.” The latter is a leading indicator. Taking action on the pipeline can influence the final business results.
There are leading and lagging indicators for Human Resources, too. Backward-looking metrics like cost per hire or turnover rate are history. They are necessary but not sufficient. Every sales organization needs a mix of leading and lagging indicators for human capital. These are essential to navigate the journey to Sales 2.0.
Predictive HR Metrics for Sales
Hiring and retention decisions are critical to Sales 2.0 success. A recent Profiles International article highlights the need for better HR metrics. Nowhere is this more important than in a sales organization undergoing a prolonged transformation.
Here are examples of 7 leading indicators for HR and the talent condition they indicate:
- Ramp Failure Rate: Scalability of the sales force
- Hiring Profile Fit: Likelihood of successful matches
- Ramp Time to Full Sales Productivity: Amount of time required to reach role maturity
- Tenure Bias: Turnover caused by employee dissatisfaction
- Career Progression: Ability to source sales leadership from within the organization
- Team Participation Rate: Performance gaps caused by poor coaching and failure to exit C Players
- Quota Attainment: Turnover caused by poor compensation and quota plans
- Framework for Predictive HR Analytics
Every organization is different, but the need for predictive analytics is common. The framework shown below provides a list of suggested HR leading indicators for sales talent management. Download this tool to shape the metrics most relevant to your organization. It can be challenging to select the “critical few” analytics and customize them. Support from sales effectiveness experts like SBI can ensure tight alignment with your transformation goals.
Get Ready for the Future Today
Will your sales force be able to compete successfully 3 years from today? Your choice of metrics will make the difference. The New Year is the perfect time to make a change. Finish up 2012 with your current metrics and then implement a clean slate for 2013. Here are the steps to follow:
- Assess current metrics; modify or eliminate them
- Identify new forward-looking metrics for 2013
- Classify each metric: lagging or leading indicator, employ a mix
- Establish a baseline and begin to plot trends
- Benchmark against peers
- Execute improvement actions
Contact me for more guidance on what to collect and how to analyze it. Start now by downloading the framework here. This tool offers a variety of potential metrics. It will start you on your way to the intelligence needed for success in the Sales 2.0 World.