Saturday Morning Sales

Kevin Latchford


The Cost Of Bad Employees - January 26, 2019

If you’ve been in business for even a few years I am sure you’ve heard or read this statement: “If you think good employees are expensive, try bad employees”. It is a phrase that executive leadership and HR groups have come to use as a mantra over time. But, this statement is often overlooked by sales managers, and I believe it is due to either being in the weeds or believing the issues of a bad employee will resolve themselves.


Let’s first look at this from the eyes of the sales manager viewing the sales rep. Generally I’ve found many sales organizations are very slow to recognize and react to bad reps (bad employees) because they are focusing on the accomplishments and successes of the good employees. Bad employees get pushed aside which then make them worse employees. And, it is typically too late to correct bad employees, thus leading to many terminations. Sales managers get frustrated quickly when their bad employees are not performing. They begin to ignore them and then these employees go on about their day as lone rangers.


The term bad employee means a lot of things to a lot of sales managers. The rep may not be the right fit for the organization. They may be a behavioral problem. They may have a bad attitude. They may blame others for their shortcomings. Regardless, they are expensive in terms beyond just compensation. Whatever the issue, not all bad employees are bad people, and some can be changed.


The same goes for a bad employee that is in a leadership position. Bad sales managers can be very expensive and again not just in terms of compensation. How many good reps has the sales manager lost or pushed away? How many deals did the sales manager blow due to ego or lack of trust with the reps? How many manage through fear tactics instead of mentoring?


The basic cost of an employee is quite easy mathematically. Salary, commission, bonus, taxes, benefits, etc. all determine the loaded cost of any one employee. What cannot be easily calculated is the cost of the employee, good or bad, in terms of client relationship management skills, likeability, leadership or mentoring qualities, business and personal connections, and reputation in the marketplace. These are serious factors that must always be taken into consideration when calculating the cost of a good or bad employee regardless of their specific position within the company.


Ultimately, the value placed upon a good employee is priceless, while the cost of a bad employee is expensive. Very, very expensive.

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