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Turnover Costs -
"Employee turnover is much more
costly than most business owners realize. Current research places the
cost of recruiting and training a new employee at 90% - 150% of the
former employee's salary when all related costs are taken into account."
source: HRPowerHouse
The cost of replacing a
salesperson is even greater, and should be calculated at a low rate of
"on-target earnings" (OTE) to as much as 1 times quota.
Replacing just one employee who
makes $75,000 per year could easily cost your company over $100,000 - a
salesperson's replacement cost could be many times that amount,
depending on the complexity of your products and length of the sales
cycle!
If your company turned over 20
employees in a twelve month period, at an average salary was
$35,000, your turnover costs ranged from more than one half of a million
dollars ($630,000) to over a million dollars ($1,050,000)!
With numbers this staggering, it's
easy to understand why Management Standards says,
"Don't Fire 'em, FIX 'em!"
| Salary |
Replacement Cost (minimum) |
Replacement Cost (high) |
Salesperson Replacement Cost |
| $25,000 |
$22,500 |
$37,500 |
On-Target Earnings |
| $30,000 |
$27,000 |
$45,000 |
On-Target Earnings |
| $35,000 |
$31,500 |
$52,500 |
On-Target Earnings |
| $40,000 |
$36,000 |
$60,000 |
On-Target Earnings |
| $45,000 |
$40,500 |
$67,500 |
On-Target Earnings |
| $50,000 |
$45,000 |
$75,000 |
OTE - up to 50% of quota |
| $55,000 |
$49,500 |
$82,00 |
OTE - up to 50% of quota |
| $60,000 |
$54,000 |
$90,000 |
OTE - up to 50% of quota |
| $65,000 |
$58,500 |
$97,500 |
OTE - up to 50% of quota |
| $70,000 |
$63,000 |
$105,000 |
OTE - up to 50% of quota |
| $75,000 |
$67,500 |
$112,500 |
OTE - up to 100% of quota |
| $80,000 |
$72,000 |
$120,000 |
OTE - up to 100% of quota |
| $85,000 |
$76,500 |
$127,500 |
OTE - up to 100% of quota |
| $90,000 |
$81,000 |
$135,000 |
OTE - up to 100% of quota |
| $95,000 |
$85,500 |
$142,500 |
OTE - up to 100% of quota |
| $100,000 |
$90,000 |
$150,000 |
OTE - up to 100% of quota |
| $110,000 |
$99,000 |
$165,000 |
OTE - up to 100% of quota |
| $120,000 |
$108,000 |
$180,000 |
OTE - up to 100% of quota |
| $130,000 |
$117,000 |
$195,000 |
OTE - up to 100% of quota |
| $140,000 |
$126,000 |
$210,000 |
OTE - up to 100% of quota |
| $150,000 |
$135,000 |
$225,000 |
OTE - up to 100% of quota |
| $160,000 |
$144,000 |
$240,000 |
OTE - up to 100% of quota |
| $170,000 |
$153,000 |
$255,000 |
OTE - up to 100% of quota |
| $180,000 |
$162,000 |
$270,000 |
OTE - up to 100% of quota |
| $190,000 |
$171,000 |
$285,000 |
OTE - up to 100% of quota |
| $200,000 |
$180,000 |
$300,000 |
OTE - up to 100% of quota |
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