Report Q1 Addressing the Recruitment Power Balance in 2015

Addressing the recruitment power balance in 2015

Quarterly Sales Index

About the Index

This report is compiled from a variety of sources including vacancy data, candidate salaries, client survey information and specific sector reports. As a business, we interview over 500 sales candidates per week, speak to 2,000 decision makers and have a national presence with 7 offices throughout the UK. This gives us access to a wealth of regional and national data, information on candidate salaries and job expectations, and insight into the challenges facing decision makers. The Index is produced quarterly and provides organisations with a good barometer of trends in the UK sales recruitment market.

About Us

We specialise in recruiting and training high-calibre people across the UK, Ireland and Australia. Our network of offices gives us strong local presence and allows us to support a long list of blue-chip clients who view us as partners they can trust.

We have grown to become a leading force in our field, placing more people than ever before. But we haven’t let our standards slip. We take the time to get to know you, your business and the type of people you need. We tailor our services to ensure the right recruitment solution for your business. In short, we make things run smoothly and produce results.

BMS Quarterly Sales Index

1| BMS Quarterly Sales Index - Published February 2015

According to the BMS survey of sales and recruitment leaders, the past 12 months have seen businesses lose money as unfilled vacancies left territories without sufficient sales cover. Talented salespeople were hard to find and tie down. And with the laws of supply and demand in full effect, the cost of salespeople in 2014 increased rapidly, causing concern within recruiting organisations.

There’s no relief from candidate power in 2015. It’s time to recognise and respond to the realities of sales recruitment today.

As the UK sales recruitment sector sees its largest increase in quarterly vacancies since 2012, there’s little doubt we remain locked in a candidate-driven market.

Addressing the recruitment power balance in 2015

2014 was the year of the candidate-driven market. Sales vacancies have risen 19.2% since 2013 and

competition for sales talent is fierce.

Chart One: Quarterly Sales Vacancy Growth 2012 - 2014

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Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Q4 14

2014 was the year of the candidate-driven market. Demand outstripped supply with BMS reporting an annual growth rate of 19.2% of advertised sales vacancies on the previous year’s figures. This was the highest annual increase since BMS began reporting back in 2012, as we see in chart one.

But as we’ll see, the industry began to respond: teams were restructured, new methodologies adopted, headcount increased, and investments were made in strengthening employer brands, training and more.

This BMS Sales Index report looks back at the defining trends of 2014, and analyses what we can expect this year.

Crucially, evidence suggests employers also put measures in place to address a growing salary disconnect - albeit perhaps not to the degree that was (and is) needed.

Remuneration is doubtless a perennial problem in attracting and retaining the best people in this candidate-driven market. And while BMS survey respondents felt expected salaries were unrealistic, there was a growing recognition that the market is dictating levels and that getting the best people required a shift in approach.

2014 – When candidates took control


No 53%

Yes, 47%

No 72%

Yes, 28%

The challenge for leaders was filling vacancies. The vast majority of firms found recruitment harder in 2014 than in previous years. And as we see in chart two, more and more firms reported losing revenue as the year went on because of it.


With the UK economy outperforming government and analyst predictions for much of 2014, this rise in vacancy numbers is of little surprise and reflected growing business confidence across the sector spectrum.

Unfilled vacancies threaten sales targets

By the end of the year, nearly half (47%) of sales managers and directors reported losing revenue because of a lack of sales presence on the ground.

The opportunity cost of not having someone on patch is creating a sense of urgency for

54% of businesses.

In addition to this, competition for candidates remains fierce. Almost a third of vacancies (28%) were filled by second or third choice candidates in the second half of the year – as we see in chart three.

Q2 Q4

Chart Two: Losing revenue because of unfilled sales vacancies is becoming an issue

No 72%

Yes, 28%

No 72%

Yes, 28%

Q3 Q4

Chart Three: We’re filling our vacancies but not always with our first choice candidate


That’s not to say that sales leaders didn’t react. They did. With 55% of team leaders looking to achieve sales growth targets over 11% (including 18% aiming for growth of 21% and more), a number of actions were taken to strengthen sales teams:

Efforts to achieve target in 2014

As the final statistic suggests, recruitment remained a serious priority. Indeed, in the second half of the year the BMS survey uncovered some 57% of sales leaders were feeling a sense of urgency by not having salespeople on patch.

As we see from chart four, this response jumped to top spot. So while firms assume the issue is remuneration based, they don’t actually know.

For developing strategies moving forward, knowing why candidates decided not to accept roles will become increasingly vital – particularly because, as we’ll see, sales leaders expect this candidate-driven market to continue into 2015.

• 73% imposed greater structure within sales teams to achieve targets • 69% restructured their teams to achieve targets • 69% invested in sales training to upskill teams to achieve targets• 42% increased headcount in an effort to achieve sales targets

Efforts to attract top talent in 2014Recruitment was certainly seen as crucial to helping firms achieve target. And they invested significant time and energy into attraction mechanisms:

• 47% increased salaries to attract and retain talent • 44% invested in employer branding to secure candidates• 39% increased bonuses to attract and retain talent• 26% shortened recruitment times and processes to secure candidates

However, as the responses from our surveyed sales leaders suggest, recruitment remains an intensely challenging task. As we’ve seen, many firms struggled to find the right people, and many missed out on first choice candidates.

Why firms missed out in 2014 The report highlighted the most quoted reasons for missing out on talent:

1) Counter offers from existing businesses keen on retaining their best people2) The inability to meet salary expectations 3) Offers from another employer

This latter point highlighting, perhaps more than anything else, the competitive recruitment environment in which firms found themselves in 2014.

Interestingly, in the Q4 2014 survey, a new answer category was inserted into the employer questionnaire – whether firms actually knew what the reason for losing candidates was.

28% of sales leaders don’t actually know why they missed out on a candidate at

interview. Understanding your competitive position in the market as an employer will be essential to compete for talent in 2015.


So what do sales leaders and in-house recruitment professionals feel will be the big issues in 2015? As we’ve already mentioned, finding the best people will be a priority and remain a major issue. Over 40% of firms had more sales vacancies in Q4 than they did in the same period in 2013.


Chart Four: The main reason for missing out on candidates in 2014

24%

15%

6%

9%

17%

28%

0%

5%

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20%

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30%

Counter offer fromthe existingemployer

Offer from anotheremployer

Long recruitmentprocess

Unable to meetcareer aspirations

Unable to meetsalary expectations

Unsure of the realreasons

That’s good news from a growth perspective, but even when we consider that stated growth targets are more conservative than those for 2014 (the majority of leaders, 63%, expecting 6-20% growth), the need to have people ‘on patch’ remains as strong.

There’s no doubt that remuneration remains the sticking point in a candidate-driven market. And while the majority of employers (61%) consider

salary expectations too high, levels are, of course, set by the market.

As we see from the BMS Index in chart five, the salary expectations gap has been growing steadily – in line with macro-economic growth, and the corresponding growth in advertised vacancies.

Tough times for recruitment

With vacancies (and unfilled vacancies) now reaching pre-crash levels, high demand means more candidate choice. Inevitably that puts them in a strong bargaining position. While firms may not like it, what a salesperson with a particular level of expertise and experience cost three years ago is no longer the same (or indeed particularly relevant) today.

Here, a role being offered with a basic salary of £32K would have been in line with candidate expectations in June 2013. 12 months later, while the ‘offered’ average hadn’t risen, the expectation of the candidate had – to £38K.

While the ‘pay candidates more’ position is one you’ll have heard a lot, it doesn’t make it any less of a fact. To get the best people, firms have to pay market rate.

While many firms may not like it, what a salesperson with a particular level of skills and experience cost three years ago is no longer the same in today’s market rates.

40% of sales leaders have more vacancies in Q4 compared to the

same period in 2013. This suggests a continued rise in 2015, exacerbating

problems when recruiting in a candidate-driven market.


We’ve seen some of the more fleet of foot firms do just that, and they are getting the best people – while others are losing them at interview to counter offers. And indeed, as has already been highlighted, we saw some movement towards salary increases in 2014.

Are the 61% of firms who, for entirely legitimate business reasons, chose not to increase bonuses and the 63% who chose to do the same for salary destined to keep missing out?

The evidence of more unfilled vacancies would certainly suggest this is the case. However, while remuneration is a hugely important issue, so is location, sector, employee brand and the offer of wider benefits.

Increasing headcount from the bottom up solves this problem in the longer term, while also going some way to relieving short-term resource pressures on sales teams.

Over the past few years, we’ve witnessed the scarcity of middle ranking sales professionals principally because many firms halted graduate programmes during the recession. Unsurprisingly then, the pool of specialists with 3/4 years’ experience is small and their wage demands higher.

Graduate intake offers optionsOf course, recruitment and salary budgets will always face pressure. So for those unable or unwilling to pay the higher costs of proven sales specialists, graduate talent offers an opportunity to get ‘feet on the ground’. While university leavers will lack the sector experience and are unlikely to hit the ground running, investing in the best graduate talent can be a smart strategic move.

We are already seeing more and more technical companies looking to graduate schemes to bring on new sales talent, and this is a trend that is likely to continue into 2015. The key, of course, is the ability to offer the right training and skills programmes in the first instance, as well as the career progression to ensure returns on these investments are achieved.

We can’t pay more!

Chart Five: Company Salaries vs. Candidate Expectations 2013 / 2014

£25,000

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£41,000

Apr May June Jul Aug Sept Oct Nov Dec Jan Feb Mar Apr May June Jul Aug Sept

Candidate Expectations Vacancy Salaries

Throughout 2014, the BMS Index reported firms’ efforts to remain competitive in the search for the best people to fill their vacant roles and territories – strengthening employer brand and increasing training being two areas of focus.

Rather than increase salaries, we saw a range of other tactics being used to attract

talent in 2014 including investment in employer branding, sales training and looking

outside your market. This trend is likely to continue in 2015 as competition increases.




Candidates won’t wait – because they don’t have to. And because candidates are salespeople, it’s not hard for them to calculate the financial cost of them attending multiple interviews when they could be out selling.

Yet the fact that 88% felt all these stages were relevant highlights a disconnect between the recruitment process and the realities of a candidate-driven market.

Given that the majority of firms are unable or unwilling to offer the hook of high salaries, it would seem logical to, at least, refine their processes in an attempt to get the best people under contract as soon as possible.

If you’re unable to increase salaries, consider shortening recruitment processes.

76% of businesses have 3 or more stages, 86% of leaders believe they are all necessary but 39% argue they are too long. Resolving this disconnect will be essential to

compete for talent in 2015.

Only 26% of firms put ‘shortening processes’ in their top three strategic priorities for remaining competitive in the recruitment market. It’s hardly surprising then that good people slip through the net.

In 2014, BMS reported that nearly 40% of organisations felt their processes were too long.

All the above tactics have undoubted value. But perhaps the most relevant is one of the most overlooked. Just over a quarter of firms chose to look at recruitment process problems. And problems there are – despite some 76% of sales and recruitment leaders failing to recognise or address the length or complexity of their own internal processes.

Poor recruitment processes being overlooked

Over three quarters (76%) undertook at least three or more stages, while 71% of organisations required candidates to attend three interviews. In addition to this, almost half (47%) require an initial telephone interview, and over a third (35%) require some form of psychometric evaluation, as we can see in chart six.

47%

97%

63%

71%

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Telephonescreen

1st interview 2nd interview Finalinterview

Day on theroad

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Assessmentcentres

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Other

In 2015 we’re expecting to see more and more companies turn to the graduate

talent pool as a way of resolving issues of recruiting in a candidate-driven market.

Chart Six: What recruitment stages apply to your business?

While some firms recognised this competitive landscape in 2014 and took action (investing in various attraction methods, to varying degrees of success), many did not.

The bottom line is that in 2015 businesses need to move quickly. Territories are still unfilled, and we have already seen a recognition that money is being lost because of it.

Developing and acting on sustainable, efficient and successful recruitment strategies is now essential in helping teams hit the ground running in the first quarter of 2015. Doing so will avoid quarterly sales targets overrunning into subsequent quarters, making the annual number harder to hit.

Ultimately, understanding and coming to terms with the recruitment market sales leaders are operating in today – not the one they were in three years ago – is crucial. And with that understanding, it’s possible to take a realistic view and put the right plans and processes in place to make recruitment work in 2015.


Looking forward in 2015? Fundamentally, we’re in the same place as last year. Candidates are in control, they have high expectations and they can pick and choose.

While rumblings of economic trouble ahead (particularly in the Eurozone) are likely to impact confidence in the short term, the medium picture looks more assured as low oil prices and continued strong domestic demand look likely to continue.

It is logical therefore that we will continue to see a growth in vacancy numbers and that filling empty territories with the very best salespeople will remain a priority.

Adapting your recruitment strategies to a candidate-driven market will be essential

to competing for sales talent in 2015.

Talk to usTalk to us to discuss how you can adapt your recruitment, retention and training strategies in this changing market.

0800 279 26 02

[email protected]

www.bms-uk.com

Quarterly Sales Index

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Report Q1 Addressing the Recruitment Power Balance in 2015