From Big Tech to the financial services industry, the start to 2023 is bleak for many employees as major corporations continue to announce significant workforce layoffs. Sales organizations are clearly not immune from this reality.
Layoffs can be a motivational nightmare for sellers, so we sat down with Doug Bushée, VP Analyst in the Gartner Sales Practice, to discuss how sales leaders can navigate the turbulent labor market and improve remaining sellers' engagement.
Journalists who would like to speak with Doug regarding this topic can contact Katie.Costello@Gartner.com. Members of the media can reference this material in articles with proper attribution to Gartner.
Q: The constant headlines about the looming recession and corporate layoffs can undoubtedly manifest in seller "drag," or demotivation away from work. How can sales leaders motivate and retain the sellers that remain?
A: Sales leaders face significant challenges in motivating their teams and finding ways to keep them focused on their objectives in times of disruptions such as now. There are three initiatives sales leaders should evaluate during this current macroeconomic environment to address these challenges:
- Offer ways to support employee professional development. Employees are clear with Gartner that the largest demotivator is working for organizations that lack professional development, especially with organizations where layoffs are a concern. Employees are willing to upskill and improve their competencies, but they want the employer to provide them with a path and the opportunity to enhance their skills.
- Reduce administrative burden. Organizations often ask those remaining after a layoff to be more productive and get more done with less. While remaining talent can't replace all the productivity of those let go, sales leaders have to make it easier for the remaining sellers to do their jobs.
- Remain human during the layoff process. Sellers are clear that one of the reasons driving them to look for other opportunities outside the organization is they feel like a cog in a machine. It's critically important that managers stay tightly engaged with their employees through the layoff process, listening to employees in 1:1 situations, making them feel valued, and identifying hot spots that demotivate employees that remain.
Q: What are the most immediate impacts felt by sellers and their larger sales organizations when they're at risk for layoffs?
A: There are many impacts felt by sellers who think they're at risk for layoffs. There are feelings of anxiety, confusion, and uncertainty, which lower morale. Sellers are bound to operate with a "Am I next?" mentality, which is undoubtedly a demotivator.
Also, once layoffs occur, sales leaders typically ask remaining sellers to cover now-open territories their laid-off colleagues previously owned. Again, this means lower interim productivity as those individuals get up to speed doing new tasks.
Finally, there will be an impact on the overall sales organization as layoffs often hit not only the sellers but also the sales support organizations. The reduction in sales support talent could mean reduced investment in professional development, sales content, and sales tools.
Q: How can sales organizations prepare themselves to better respond when the economy recovers?
A: It's imperative to have a disciplined cost-reduction process to protect long-term interests. Reducing costs by simply changing sales coverage or organizational design is risky, given that these changes, combined with talent reductions, create barriers to effective execution. Similarly, reducing costs by eliminating critical areas of sales support which enable the sales force, such as onboarding and training, have a moderate impact on the overall business.
Be deliberate in reducing sales coverage for high cost-to-serve customer relationships rather than across-the-board seller reductions.
Organizations should also ensure they're retaining the right sellers to weather the economic storm by looking not only at seller performance but also on their direct impact on business results and skills alignment to the future strategy of the sales organization.
Sales leaders must consider (i) the seller’s familiarity with the organization's operations and offering, (ii) the impact the individual seller has on other roles such as customer success, pre-sales support and key account managers, and (iii) their ability to remain adaptable and flexible through disruption.
Join Doug and his colleagues at the Gartner CSO & Sales Leader Conference, taking place May 16-17, 2023 in Las Vegas, NV. Tune into the complimentary Gartner for Sales Leaders webinar, “Boost Seller Motivation, Hunger & Energy to Close More Deals.”
If you are a member of the media who would like to speak further on these topics with Doug, please contact Katie.Costello@Gartner.com. Members of the media can reference this material in their articles with proper attribution to Gartner.