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Hiring The Right Head of Sales To Drive Growth

Hiring the right Head of Sales is a critical decision that can make or break a company's revenue growth. While the allure of a seasoned full time sales leader with an impressive track record might seem tempting, it's crucial to exercise caution.  

Too often, small and medium sized business fall into a number of traps when searching for the right Head of Sales, such as:

- prioritizing flashy resumes (with all the right sales keywords).

- not understanding the candidate's true capabilities and successes.

- hiring a talented individual contributor who is not a sales leader.

- recruiting a Head of Sales who benefited from timing or luck or both in his or her career.

- poaching from competitors and then the Head of Sales leaves for another competitor pitching the same promises of bringing new customers.

This list plus the known problems with applicant tracking systems, can lead to costly missteps. Hiring the wrong Head of Sales will derail even the most promising business, sales strategies, and top-performing teams. And, if that risk wasn’t enough, your Head of Sales will likely be one of, if not the top paid members, of your team. The wrong choice can be a significant hit to your P&L.

In a Harvard Business Review article titled, 4 Mistakes Companies Make When Hiring Sales Leaders, 150 past sales leaders (VP sales or equivalent role) at the 100 largest U.S. manufacturing companies were surveyed. One in four lasted in the job less than two years, and half lasted three years or less. This is at established manufacturing companies who can withstand the financial hit of turning over a Head of Sales. That true cost is often 2x their annual compensation. In a related post titled, The Power of Fractional Chief Revenue Officers: Boosting Sales and Revenue Without Breaking the Bank, we shared Linkedin research that the average tenure of a Chief Revenue Officer is 1.5 - 1.9 years. What would the impact of this type of turnover be for a small business?

The risk, uncertainty, and price tag with hiring and retaining sales leaders is a driving reason why many businesses ranging from pre-revenue to $50M in revenue are shifting their hiring practices. Instead of hiring full time sales leaders, they are now hiring fractional Heads of Sales and fractional Chief Revenue Officers. These qualified fractional leaders are really compelling options, but until recently companies were hesitant. Recruiters and HR teams often put down the value of fractional leadership stating that while they might tout proven success and a network of top-performing contacts, the reality is that their part-time commitment can make it challenging to truly scale with the business. Without a full-time, results-oriented sales leader at the helm, companies risk disjointed strategy, lack of accountability, and difficulty maintaining momentum. 

A fractional Head of Sales would simply answer that concern by stating the obvious. Their renewal is their goal. New business is harder to find than maintaining current relationships, which is Sales 101. Fractional heads of sales want a long term relationship or sometimes the offer to join full time if the company is legit. Therefore, a fractional head of sales and the overall revenue growth and success could not be more synergistic. And, without a full-time results oriented leader who is an employee at the helm, recruiters risk earning commissions on the placement and HR has less involvement in the process.  

Let’s look at hiring a Head of Sales with a compensation plan with OTE of $300K, benefits, options, etc.. If the average permanent placement commission is 25%, and benefits costs on average 20% of the salary, this $300K employee will cost $435K the first year. And, if they are working for another company, they need to resign and transition out, right? Then, most want some time off to be ready to go “and attack the new opportunity refreshed and excited”, so you likely lose 30-60 days before they officially join if they decide to move forward.

Now, if the Head of Sales is fractional:

- you can hire someone more experienced that was not in the budget originally and benefit greatly.

- they can often start right away which means you will see results much faster.

- your business has more money to invest in other very important things such as marketing, lead generation, incentive programs, customer service, business development reps, technology purchases, and services, etc.. 

- they bring a wealth of knowledge, best practices, sales playbooks, GTM strategies that work, training programs, and other extremely valuable and real experience.

- they have to be a player coach whereas all too many seasoned sales leaders are above getting their hands dirty and don’t have a do what it takes attitude.

- they can still commit to a longer term contract except you do not have to pay them benefits.

- they have to get results fast and always have to prove themselves and their value. 

- the team knows the leader is fractional and is committed to stay with the company and to empowering the team to be successful, which shows leadership is investing in the team and the opportunity for them to get promoted with growth.

- they provide continuous sales mentorship to the Founder and the sales team because when the team sells, the company wins and so don't they.

- they want the renewal, or sometimes the offer to join full time.

- their success could not be more joined at the hip with the business now and in the future.

There are many talented full-time Heads of Sales with a solid track record who can be invaluable to a company's success and growth. Additionally, a growing number of proven Heads of Sales prefer the fractional Head of Sales approach, and there are many reasons why they might be a better fit for your business.

Good luck hiring the right Head of Sales to drive your revenue growth. Happy selling!