Medical CEOs: Help Me, Help You!
My biggest challenge as an owner of a recruiting firm is getting medical company decision-makers to understand “the why” their sales managers ask them to enlist outside recruiters the second they have a vacant territory. The easiest way to describe “the why” is to understand the impact of the overall Return on Investment (ROI) an elite sales professional can have on a company. So, I decided to share my experience as a Medical Sales Manager and as a Recruiter when hiring top talent.
I hope this helps provide medical company leaders some insight, so they can have the best hiring process that attracts those elite sales professionals. Like the AT&T commercial says, “just ok is not ok,” and nothing is more accurate when hiring the “MOST IMPORTANT” asset in your company—sales professionals. I know my comment might be raising some eyebrows from the non-sales folks, no doubt, every person within a company is important. However, the sales force is the tip of the spear regarding the customer, patient and generating revenue, so everyone within the company receives a paycheck. If the spear is dull, the company will eventually struggle.
Back in 2008, when I was promoted to a new Regional Sales Manager position, the VP of Sales, Area Directors, and seasoned Regional Managers all gave me similar advice and I want to share that with you.
“Hiring is the most critical function of a manager, 90% of being a success is how well you hire, and 99% of your headaches come from one bad hire.”
Even after 12 years, their advice is 100% spot on and I’m certain every proven Sales Leader would echo the same advice.
Ok, now let’s talk about the ROI and recruiting costs when investing in elite sales talent. I’ll provide a visual aid to show you some of the faces responsible for taking an unknown company and turning it into a dominant market leader.
This picture is my first sales team at a company called LifeCell. For those who are not familiar, LifeCell has been purchased three separate times, the last time by Allergan, for around $3 billion. I want to make a couple of points about the picture. First, if there were a medical device sales team, “Hall of Fame,” they would be first-ballot inductees. Second, the photo was taken at our National Sales Meeting in 2011 after winning our first Region of the Year Award (we won several more after that).
That particular year we sold $5 million over quota for a total of $24 million in sales. So, in essence, every rep was $1 million over their quota and the company made an additional $5 million that it wasn’t expecting. What’s interesting is everyone in this picture came to LifeCell through efforts by external recruiters with a total cost of less than $50k. That same team generated over $75 million in sales, which $50 million were in “New Sales” over three years before most of them were promoted to managers.
I will never be accused of being a math expert, but it’s an unbelievable ROI to pay a search firm $10k and they find you an asset that can sell millions of dollars over their quotas. Think about it for a second, one sales rep in one year could pay for 100 new hires recruiting fee.
What I find fascinating is how many medical companies refuse to engage outside recruiters when hiring the people who can bring instant profit to a company. It’s similar to how hospitals are siloed. Like when a purchasing manager is only fixated on acquisition prices but refuses to understand the huge readmission cost savings for the hospital by utilizing a novel medical device. We all can give endless examples of the “cheapest” products, causing billions of dollars of lost profit and even worse, poor patient outcomes. On the other hand, there are just as many stories with medical companies losing billions of dollars in “just ok” hiring processes.
One of the biggest light bulb moments I had was when LifeCell leaders figured out how much lost revenue a vacant territory produces. They used a model called “carry-over effect” to figure out what the per day loss of a $2 million territory was. They determined the company was losing close to $5,100 per day. So, if the right sales professional could be hired 2-3 days faster, it pays for the Recruiter’s cost. I see companies spend months trying to fill vacant sales openings on their own. Either they haven’t run the lost revenue data, or they are in their silo, not understanding the downstream ROI. Let me remind the sales leaders, “who is responsible for hitting national sales quotas?”
That’s right, you are.
Something tells me if the non-sales folks who are in charge of the hiring process had 50% of their income tied to hitting sales goals, your hiring process might go from “just ok” to “beyond awesome!”
I’m not trying to be hyperbolic, but I wonder if the medical company CEO’s understood how valuable great sales professionals are? Do they know only 20% of sales professionals look at job boards? The reason many of them are looking is that they are poor performers who are being forced out of their current company. Do they understand superstar salespeople usually are happy at their current company and it’s challenging trying to convince them to look at other opportunities? Do they understand the external recruiter’s, a lot of times, only get paid if their candidates get hired? So actually there is no out of pocket cost to hire an external recruiter.
I feel like Tom Cruise in the Jerry Maguire movie begging clients to see the big picture; “help me, help you!” What’s the worst that can happen? The hiring manager hires the best talent regardless of where they came from and the company makes millions of dollars and patient outcomes improve.
*Open Invitation: If a CEO, Commercial VP, Sales Leader, or Talent Acquisition Director ever wants to discuss how to develop a “beyond awesome” hiring process, please contact me anytime. If you don’t take me up on my offer, then we are both losing revenue.