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QHow do you hire “good” sales people?

AThe best predictor of future behavior is past behavior. I think that’s also the definition of insanity. If you’re hiring a sales rep and you have the choice between a rookie and someone who’s built a brand name in your territory, who’s taking your business and has a few million dollars of business that you don’t? Most will go with the latter. I’ve used just about every sales, aptitude, intelligence and personality test out there and no test is going to sniff out what your gut can tell you. I’ve been recruiting for electrical distributors exclusively for over 10 years and frankly…nothing has changed when it comes to recruiting sales people. By the time I’m involved, the only people that a client wants to see is the one they can ‘plug and play’ they’ll pay a premium for that person in hopes they can get that person to drag their business across the street, the win of landing a big hitter is intoxicating. More often than not that big hitter will use your big offer to get a bigger offer to stay put…and the cycle continues. I absolutely agree, and I’ve interviewed thousands of distributor sales guys and the big name, big dollar guys are rarely worth the investment because of the web of issues that keep them where they are; product line, pricing, an inside person they can’t leave behind, etc, etc…the real gold in this industry is the guy (or gal) who’s waiting for that person to retire, leave, move away…coddle your big dogs but groom your puppies. I’ve placed hundreds of sales people in electrical distribution, I know the difference between a good ‘en and a good talker. If you’re having trouble attracting talent, call me…I’m happy to help!

Want to ask the expert?

Prudence Thompson is a time-tested recruiter exclusive to the Electrical Wholesale Distribution industry & she’ll tell it to you straight.

Email her at pt@egretconsulting.com with any questions you have about your career or the industry in general and get a unique pespective from a recruiter who’s seen it all.

For 8 years we’ve reviewed the number of women attendees as a small viewpoint into how the industry is changing. Albeit this is not the most scientific survey but the results confirm the obvious; we are a male-dominated industry, and worse; we’re not changing to meet the demands of the near future. There are elegant rationalizations for that; the distribution industry was launched in it’s current form from the end of World War II, when the returning soldiers represented an extraordinary influx of labor at a time of government sponsored construction projects; where the availability of materials was a major contributor to the efficiency of our re-birth from the War. The industry was started by servicemen and has remained virtually male-only for 65+ years. Dad’s turned the business over to sons, and a handful of daughters, but a strategic process of attracting a diverse workforce into distribution and even electrical manufacturers simply never gained traction. Here are the results for 2012:

               Category          # of Females    Total # Attendees       % Female       Executives

2005    Distributors           20                  322                 6.2%

2006    Distributors           22                  316                 6.9%

2007    Distributors           21                  323                 6.5%

2008    Distributors           25                  396                 6.3%

2009    Distributors             9                  159                 5.7%

2010    Distributors           22                  254                 8.7%

2011    Distributors           15                  243                 6.2%

2012    Distributors          17                  208                 8.2%         12 (5.8%)

2005    Manufacturers       27                  381                 7.0%

2006    Manufacturers       17                  358                 4.7%

2007    Manufacturers       17                  331                 5.1%

2008    Manufacturers       23                  348                 6.6%

2009    Manufacturers       21                  221                 9.5%

2010    Manufacturers       23                  289                 8.0%

2011    Manufacturers       24                  282                 8.5%

2012    Manufacturers      23                  254                 9.0%          9 (3.5%)

2005    Total, above          47                   703                 6.7%

2006    Total, above          39                   674                 5.8%

2007    Total, above          38                   654                 5.8%

2008    Total, above          48                   744                 6.5%

2009    Total, above          30                   380                 7.9%

2010    Total, above          45                   543                 8.3%

2011    Total, above          39                   525                 7.4%

2012    Total, above          39                   462                 8.4%       21 (4.5%)

My professional interpretation? Although there have been some fluctuations throughout the past 8 years, there are no significant changes in diversity. And the facts reveal the rapidly diminishing relevance of the NAED conferences.

This year I decided to look more closely at who those women actually are. 12 of the 17 women attendees from Distribution hold titles of VP or higher. 9 of the 23 manufacturing women hold VP or C-level titles. As a total, 21 of a meager 39 total women attending held executive level positions at VP through C-levels. Male senior executives represented 165/208 distributor attendees (79%) and175/254 manufacturer attendees (69%).

Expressed another way; there are a total of 360 senior executives attending this conference. Women represent 21 of those: 5.8%

In a recent Harvard Business Review study by Zenger and Folkman* that compared leadership effectiveness of women vs. men, it concludes that women outscored men in 15 of 16 leadership competency variables they tested. They tested over 7,000 leaders across multiple industries and reported that the average number of women at senior executive levels is ‘only’ 22%. The NAED industry conference is arguably considered one of the top gatherings of industry senior executives and it has an executive representation of only 6% women?

The 2012 conference is the first conference in many years that actually has talent development on the agenda. The conferences have largely been formulaic: how to improve gross margins or cash flow, manage rebates, decrease inventories, etc. Darwinism will take care of companies that can’t figure out how to manage inventories. The real gorilla in the room is talent to succeed in an industry that is going through disruptive changes due to technology. The industry needs to talk and exchange ideas on: new channels, new technologies, risks/rewards of entering new markets, how to attract or train talent to up-sell, how to maximize government stimulus dollars, how to Topgrade your organization, etc? Those topics can only be addressed with diverse input. Talking to the exact same 360 legacy executives over and over again won’t help the industry adapt to ‘new’.

As rapidly as the industry is evolving, it’s time to stop talking about rebate dollars, SPA credits and RMA policies and move to real business discussions on how to access the 2.1M commercial buildings across America that are using outdated lighting and electrical equipment and would be eligible for incentives to modernize them. The same discussions could occur for other areas of growth; alternative energy, data centers, smart grid, etc. Just as conferences have emerged and grown for specialty applications (Automation Fair, LightFair, Strategies in Light, AWEA, CEDIA, BICSI, EmergeAlliance, etc.) the industry needs a vehicle to attract the leaders of the industry into discussions of real value. As an example, Strategies in Light had 5,000 attendees. NAED can’t find 500 people to show up. NEMA is too small but NAED could provide the medium of helping the industry address its legacy hangovers: diversity, technology, channel fragmentation, and competitive threats from corporations that dwarf the largest US electrical manufacturers. It’s time for either NAED to step up or an alternative organization to arise.

In short, do you want to grow and become more profitable? Then you need to attract people who look at this industry as a step into the future; where electronics and low voltage applications will dominate everything: lighting, controls, factory automation, building management, security, as well as: TV’s, sound, voice and all computing. Technology is emerging now for behavioral control through color. The industry needs to be at the forefront of this R&D and deployment.

Let’s break down the barriers and promote real idea exchange, with women, minorities and consultants who view the industry from the sidelines. Some of these people play golf, too.

*http://blogs.hbr.org/cs/2012/03/a_study_in_leadership_women_do.html

AThere is little consistency between distributors from one side of the street to the other and each company tends to have multiple programs for their sales teams. I can only tell you what I’ve experienced. When I’m involved the company tends to offer increases between 5 and 10% but that’s not consistent. I can tell you, as unfair as it may seem that in most cases, companies are more likely to offer an increase in pay to entice an employee who is working for a competitor than one that isn’t working at all. I would tell you that the best thing you can do is take out a piece of paper, put your current company on one side and the new company on the other and start dissecting the offer line by line. I would expect that you’ll find a lot of hidden advantages embedded in the new position. If not, you can always attempt to counter the offer, but be sure that you have all of your issues out on the table and are clear in your mind what the walk away number is. You can go back, but usually only once. Best of luck, let me know how it works out.

-Prudence

Have a question about industry trends and how it affects your career? Ask an Expert! Prudence Thompson has been recruiting exclusively in the electrical industry for over 12 years and has (almost) seen it all! Email her at pt@egretconsulting.com with your question & don’t forget to check her out on LinkedIN and Twitter for updates on job openings, people moves and more.

Are you having trouble finding good people out there? I’ve posted our job to all the job boards and have searched Linked In, talked to just about everyone I know to see if they know of anyone looking and we’re coming up empty. Actually, let me rephrase that, outside of a hundred people overseas and a hundred people who are completely unqualified that is. Is there a big decrease in people who are looking for a job?

Randy

AHi Randy-

I get this question a lot and I really don’t know the industry from an ‘applicant’ perspective, or the stats on the unemployed in distribution because I’m looking at the market from the absolute opposite end of the spectrum. I don’t use job boards but I do post my active positions to my groups on Linked IN and of course to our website but that really doesn’t elicit many applicants. I’m calling people up at work and telling them about something completely different and most of the time those people weren’t even thinking about a move. We actually track the number of unemployed people we place and our numbers stay pretty stable at about 2% of the people we place each year are unemployed. I think that the traditional means of attracting talent to your company will work the majority of the time utilizing the methods you’re using, I live in that little percentage of time that it doesn’t, so if you get to that point, I know a really good recruiter!

-Prudence

Transactional talent acquisition. I consider this the rough equivalent of outsourcing those services you don’t want to develop into a departmental organization within your company. Transactional talent acquisition allows the company to define the specific needs of the company and attract that need.

Pros.  Transactional talent acquisition allows you to attract talent only when actually needed; to replace the loss of a critical employee or develop a new discipline within the company. The costs of hiring are higher on a per employee basis, but the overall expense to the company is generally significantly lower. The talent can be narrowly specified and can be defined as permanent or temporary, as the need may require. The acquisition of the talent can be more efficient if the responsibility, definition and selection of the talent are limited to the direct hiring authority, with a small number of internal interviewers involved in the selection process. Transactional talent acquisition enables a company to attract talent for specific tasks; such as product development, engineering, sales or marketing channel development or operational expertise (LEAN, manufacturing engineering, plant management, plant expansion or relocation, etc.). Transactional talent acquisition shines when the task is to attract the best and brightest talent available. The costs of hire for this approach to hiring can be reviewed on a direct ROI basis; tied to each hire with their metrics of performance delivered as a percentage of hiring costs expended.

Cons. Transactional talent acquisition can be expensive for functions that are very broadly defined at an administrative level within the organization: administration, accounting, customer service, etc. As a general rule (see TopGrading for an excellent discourse on the costs of hire), the cost of a hire is directly related to the level of responsibility and compensation for an employee. As such, investing in an outsourced solution for a Director of Marketing, relative to their compensation and responsibilities is usually a very strong ROI (assuming you hire well).  The impacts on internal equity for compensation models tend to get strained by continual outside sourcing since the cost to attract someone away from their current employer usually results in paying a premium to their wages; and typically a premium to your internal salary ranges. Most compensation plans have a mechanism of mitigating these costs by arbitrarily changing the period of merit raises; but ultimately, attracting people at current market rates may have a negative impact on your comp budget.

Build your own. This model has been employed by many large corporations for decades; companies such as GE, Graybar, Eaton, Grainger all have formalized campus recruitment programs with extensive training and development resources to attract new people into their companies and build them into performers in the future.

Pros. Build your own programs contribute many benefits to the organizations. You’re able to attract young, well-educated people from your preferred universities. You can train them in the culture and the strategy of the company. It builds a strong internal brand identity to the company at large, as eventually the new kids enter the industry and project a similar identity of shared values, structures and policies. Coupled with a strong leadership training and development program, you build in a well-defined and clearly visible to the enterprise succession plan. It delivers a constancy that is dependable, predictable and nurturing. It also allows the company to closely manage their comp/benefits budgets with strict oversight on merit raises and employee costs. Managing a homogeneous workforce is easier and far more malleable than one built by attracting the best and brightest from outside the company.

Cons.  Build your own talent acquisition requires a very large investment in talent acquisition, training, mentoring and administration. Build your own works only if the company has the ability to think outside of their own company; most companies tend to become very inbred with a build your own approach to talent management. Build your own strategies struggle dearly during recessionary times. They reduce their college recruitment efforts and cut training costs and when the economy returns, their bench strength strategy is often lacking in sheer manpower or specific skillsets.  When a BYO company is faced with a critical employee loss, they are often faced with a large internal compensation struggle when they realize that their salaries aren’t competitive with key competitors and the premium required to attract an occasional recruit renders their cherished internal equity policies moot. BYO appeals to slow steady growth companies where headcount programs are carefully planned and staged. Emergence from a recession doesn’t allow for careful, staged talent acquisition. It’s a race for the best and large corporate recruitment departments rarely feel ‘rushed’ to make a hire. The long term ROI for a BYO strategy is rarely as cost-effective as a transactional attraction strategy. If times are good and steady growth is predictable, then building a bench is a cogent strategy for large companies. But if the company recognizes that the industry is changing and products and markets are changing, then BYO may be a very limiting approach to enable thinking out of the box. The calculation of a cost to hire is nearly impossible under a pure BYO strategy. The infrastructure required to administer all facets of this approach are seldom included in internal budgets for costs of hire. BYO is inherently more expensive than a transactional model; but it delivers a longer term bench strength and succession planning strategy than the transactional model.

Buy or Build? It’s your call, but buying talent in a market that is undergoing considerable changes makes the most sense to me. It’s difficult for our clients to build a solar or wind or controls or LED expert; especially when there is little talent inside of the company to train them. As fast as this industry is changing, we see the Bigs adding transactional attraction into their talent acquisition models; at the risk of tweaking their core brand identity and succession plan org charts.

The next 5 years will bring transformational change to our industry. Now is the time to ensure you’ve got the people who can help shape your company for those changes.

For more information: http://www.tedmag.com/news/news-room/people-news/Executive-level-promotion-at-Independent-Electric-Supply.aspx

For more information- http://www.tedmag.com/rooms.aspx?id=10681

I recently had a telephone interview with a human resources person and she insisted that I tell her the exact date that I graduated from the university that was on my resume. She told me that she was required to obtain this information. If I did not give her this information she was required to end the interview and I could not be considered for the position. Is this legal? After I provided her with the year and month of my graduation the interview focused only on what jobs I had after graduation and before the relevant employment experience I have had in the last 20+ years listed on my resume.

Thanks for your help.

Best Regards,
Leif

AHi Leif-

It actually is legal and very common in interviewing. Human Resources and even my own staff will also ask for a candidate’s date of birth, not to gauge their age but to verify their degree and for the company to run background checks. While it may appear to be a case of age discrimination, it’s really just standard operating procedure.

-Prudence