“Having spent 30 years evaluating and tracking executives and studying the factors in their performance, I now consider potential to be the most important predictor of success at all levels.”
– Claudio Fernández-Aráoz, Harvard Business Review
As a Talent Specialist at OpenView, it’s my job to work with our portfolio companies to source and hire the best sales and marketing talent out there. Prior to OpenView, I led a team of recruiters that specialized in scaling revenue-generating teams for growing software companies.
Over the course of this work – recruiting for and advising tech companies from pre-series A to IPO – I’ve come to understand that finding that so-called perfect candidate often has a lot more to do with future potential than past experience. In fact, I think it’s time for more companies to embrace this mentality when hiring.
Typical Requirements for Sales Candidates
When looking to hire top performing sales reps, hiring managers usually focus on past performance (average quotas, attainment, biggest deals and logos won, etc.). There might be an emphasis on years of experience as well as education, often with a focus on top colleges and universities. You might perhaps even require a minimum GPA. Hiring managers also tend to look at industry background and verticals in which the candidate has previously sold into.
Though it’s definitely not wrong to seek out candidates who do fall in line with these defined characteristics, hiring managers have to understand that there is only a very limited pool of candidates who will meet these requirements. Moreover, that pool is shrinking all the time as more tech companies scale their teams. By focusing solely on candidates who meet a predefined set of criteria, you’re excluding an entire pool of potential hires who might be very successful at your company.
What’s more is that by putting these strict limitations on applicants, you’re discouraging people from applying as well. So in fact, you’re shrinking your own application pool from both ends.
Why It’s Important to Start Looking Past Traditional Markers of Success
For companies dead set on evaluating and hiring candidates based on very limited criteria, it’s time to face the ugly truth. Hiring candidates that meet your requirements may end up costing you big time. Experienced candidates who move roles laterally often expect a 10 to 15% bump in their overall earnings. When you do go out on a limb and hire a candidate who doesn’t check all of the typical boxes, you’re most likely to acquire said hire at a steep discount.
As mentioned, the pool of candidates who meet your criteria is shrinking rapidly. Every hiring manager is looking for candidates that check all the same boxes. To build out your team as you scale, you’re eventually going to have to expand your pool of acceptable applicants. In fact, a 2014 PWC survey of CEOs in 68 countries found that 63% of respondents said they were concerned about the future availability of key skills at all levels.
By focusing solely on things like education, years of experience and past performance, you put yourself at risk of hiring the wrong people. It’s estimated that the average cost of a mis-hire is between 25 and 40 times that person’s salary. Putting more of an emphasis on culture fit and willingness to learn (factors that are typically indicators of success), you’ll likely reduce your chances of hiring the wrong candidate.
The Benefits of Hiring Based on Potential
It’s time to view a candidate’s lack of experience as a positive – especially when it comes to sales. When you consider a candidate with less experience, it’s possible that he or she has picked up fewer sub-optimal professional habits that will likely be difficult to break. They may also be less fearful or cautious when it comes to making mistakes or overlooking potential opportunities. Candidates with less experience also lack extensive networks and rolodexes on which they can rely. They have to work harder to prove themselves. In essence, you’re getting someone with a fresh perspective who has the capability of being flexible and creative – qualities that are important for smaller, growing companies.
Hiring that less experienced candidate also means you have access to a pool of talent that is completely overlooked (ie. not picked through) by your competitors. Plus, you might be uncovering that hidden star.
Hires based on potential are also likely to stick around longer. Extending an opportunity to a newcomer builds loyalty. You’ll be the employer who gave that person a chance (after he or she was likely turned away by others).
How to Hire for Potential
It’s likely that many hiring managers are hesitant to hire based on potential because they simply don’t know how to do so effectively. So, to get started you should consider the following:
- Require potential hires to take an assignment that tests for innate skills, qualities and intangibles. For instance, rather than asking a candidate to present on a specific industry or product, ask him or her to present on a topic that they are familiar with. This format enables you to look out for things like presence, confidence, articulation and resourcefulness.
- Look for patterns of past success through perseverance. Someone who has been successful in other instances where she or he had no prior experience or knowledge is likely to hit the ground running in any new role. Seek to understand how that candidate ramped in that situation. Ask them about the goals they set for him or herself. Understand the driver behind their motivation to succeed. Ask what they learned from past experiences and what they’re hoping to gain going forward.
- Seek out people who’ve worked in your target industry. For instance, former finance employees will understand how to sell ERP software, a marketer will be adept at talking about a marketing automation platform, a lawyer looking for a career change is perfect to sell legal tech. The right person will come in as an industry expert and can play the immediate role of trusted advisor to prospects and customers. Hiring a candidate who can empathize with your target customer by understanding things like typical pain points can add real value to your sales team.
- Promote from within. As a hiring manager, you might be focused so intently on finding talent outside of your organization that you overlook those sitting right in front of you. Specifically for sales roles, most managers will look to transition BDRs, but don’t pass over those in sales support, marketing, account management or customer success who know the ins and outs of your sales process, product and customer base.
Hiring based on potential rather than experience can be a scary undertaking. It requires you to in part toss aside long held criteria you’ve used to evaluate each and every new hire. But, with the pool shrinking, it’s time to look outside of your typical talent base. We think you’ll be pleasantly surprised by what you find.