Your Sales Rep Interviews Might Be Less Effective Than a Coin Flip
The foundation of a robust sales process is fundamentally linked to how we recruit our sales representatives. Despite all the knowledge and research available, we still observe hiring managers conducting unstructured interviews, thereby placing the fate of their sales team in the hands of chance. Research1 indicates only a 20 – 40% correlation between interview ratings of candidates and their actual job performance. Some studies even show a negative correlation, suggesting that picking applicants at random could possibly produce better results!
I was very fortunate to work with Marco Garbrecht for many years, during which we hired over 500 sales reps across Europe. I asked Marco to co-author this post with me so we could share our joint experiences in successful hiring and scaling of sales teams.
The Unstructured Interview: A Coin Toss in Disguise
If there is one takeaway we would like you to get from this post, it would be: Stop running into an interview and asking questions as they come to you! We refer to these as unstructured interviews, where the conversation flows freely without a predetermined set of questions. While this might seem like a comfortable approach to gauge a candidate's personality and spontaneity, studies2 have shown that unstructured interviews are less effective than a coin flip in predicting job performance. This lack of structure leads to significant variability in outcomes, heavily influenced by the interviewer's bias and the day's circumstances.
Structured interviews represent a significant advancement in the hiring process, where a predefined set of questions is used to ensure consistency across interviews and theoretically enhance the reliability of assessments. However, when these interviews lack predefined and scaled answers, they can still suffer from subjectivity, as interviewers might interpret responses based on personal biases or inconsistent criteria. These biases can skew the evaluation process, potentially favoring perceived past successes over genuine potential.
A Rather Radical Approach: Just Hire, Evaluate Later
Perhaps the most unconventional and aggressive approach we have tried was during a period in which scaling the sales teams was our number one priority. At that time we were playing it by the book with structured interviews, predefined answers, and even practical tasks and role plays during the process. Still, the results did not indicate a significant improvement in predicting future job performance and at the same time, we were falling behind in terms of growing the teams.
We found that the reason for this was that every hiring manager and recruiter conducting the interview had to have the same understanding of the questions and potential answers. Ensuring consistency in how to conduct structured interviews across large teams, different regions, and cultures was impossible for us at that time.
So we decided to try a radically different approach. Just hire everyone that scored well enough in a very basic set of questions. Before doing that, we hired a team of full-time sales trainers who developed a sophisticated training and onboarding program for all new hires. During an intense 4 weeks of training and coaching, only those who proved to have a high chance of being successful in our sales team handed over to their new team lead.
It is not a surprise that this approach had better results than the structured interviews, taking into account only those who made it out of the first 4 weeks. But this is also the most resource-intensive and expensive way to scale. At the same time, it was a challenge to maintain the ownership and accountability of the sales team leads during this process, due to the fact that they were only partially involved in the selection and training.
Putting Everything to Work: Competence-Based Interview with Behavioral and Situational Questions
Perhaps the biggest effect we could measure so far in predicting future job performance was the development of competence models. The way we approach this is to define a set of competencies that are most predictive regarding future success in a role. For example, "self-motivation," "result orientation," "learning ability," etc.
In a second step, we define a set of Behavioral Interview Questions that ask candidates to describe past behavior in specific situations related to the job they are applying for. For example, "Can you give us an example of a complex sales situation where you used your analytical skills to be successful?" The rationale is that past behavior is the best predictor of future performance. We also add Situational Interview Questions that present hypothetical, job-related situations to the candidate and ask them to explain how they would handle them. Situational questions are useful for evaluating a candidate's problem-solving ability and judgment, particularly in cases where the candidate may not have direct experience in a similar role.
Developing such a model with the right questions and analysis framework can be quite resource-intensive. We recommend starting with roles that are hired often or using existing models that can be applied to the role more or less out of the box. Here are two example results for a model we developed for one of our clients. The role we were hiring was SMB Account Executives (i.e., inside sales rep).
Interestingly enough, at the beginning of the projects we thought that the profile above would be the perfect placement for our client. However, after diving deeper into the project, it turned out that the profile below was much more likely to be successful in the given context. In this specific scenario, the ability to learn and collaborative competencies were more important than being highly results-oriented and focused sales rep.
The beauty of such an approach is that this can be done with the existing team. Having such a profile for existing high performers can be very helpful in order to define who it is actually looked for.
Conclusion
With decades of available research about effective interviewing, the message is clear: Unstructured interviews are a relic of the past. Designing a structured interview with behavioral and situational questions should be the minimum ambition.
The evolution from traditional to modern interview techniques reflects a broader shift in recognizing the complex nature of sales roles today. In a successful sales organization, the sales process starts with recruiting. Having a clear understanding of who is most likely to be successful in a certain sales environment based on which competencies and putting those competencies at the center of how candidates are selected is a key success factor.
Dana , “Belief in the Unstructured Interview: The Persistence of an Illusion,” Judgment & Decision Making (2013)
McDaniel, M. A., Whetzel, D. L., Schmidt, F. L., & Maurer, S. D. (1994). The validity of employment interviews: A comprehensive review and meta-analysis. Journal of Applied Psychology, 79(4), 599-616.
