Here’s a stat: It takes a company an average of 41 days to fill a sales job. How do we know that? Well, The Wall Street Journal said so.
So we started thinking, “What does 41 days cost a company?”. I’m no math major, but a simple formula can give us an understanding. Let’s apply it to a specific type of salesperson: SDRs.
(By the way, you can plug your own numbers in here, but I’m going to pick some nice round ones for demonstration purposes.)
No need for a calculator here:
Let’s start by thinking about how many opportunities you expect your SDRs to generate in 1 week: We’ll say 3 in 5 business days. If we translate that into 41 business days, that’s about 25 opportunities.
Now let’s call the average close rate 25%. Factor that in and we’ve got 7 new deals that could have closed.
Lastly, what’s your average deal size? Let’s call a one year SaaS Software Subscription $5k per year.
So $5k X 7 = $35,000 in revenue. With that conservative estimate, in two months, your company has missed out almost as much revenue as you would pay an SDR over the course of an entire year.
Here’s that simple formula once again. Plug your own numbers in!
(# of opportunities expected in a week) X (8.2 weeks) X (average close rate) X (average deal size) = Lost revenue over 41 days of searching for an SDR.
41 Days is Crazy
If you’re like us, you’re probably thinking, “41 days to hire an SDR? That’s ridiculous”. And it is, but hiring SDRs can become complicated for a number of reasons:
- In-house recruiters are sending you poor candidates
- In-house recruiters aren’t sending you enough candidates
I want to stop here and say, we’re not picking on in-house recruiters. Most of the time, recruiters are hired to find top talent - the new VPs, Directors, C-level, Tech Talent - whatever it may be. Unfortunately entry-level sales isn’t their top priority or even their expertise necessarily. When in house recruiters are asked to recruit entry-level sales this is what usually happens:
- Everyone in the world, plus their cousin, applies.
- Recruiters’ inboxes are full of look-a-like resumes from recent college grads.
- Those recent college grads are notoriously unorganized, unprofessional, and undecided on what they want to do in life.
What does all this translate to?
- A MAJOR TIME SUCK.
- Frustration from both ends (Sales managers and Recruiters)
- And don’t forget - the opportunity cost of LOST REVENUE.
So here comes the pitch:
LaunchSource was created to end this vicious cycle. We do the heavy lifting upfront for sales managers and in-house recruiters.
After sorting through resumes, phone screens, and in person interviews, plus educating candidates about the SDR role, we present hiring managers with a marketplace of ready-to-go, awesome, prepared, vetted candidates.
But wait, there's more...
LaunchSource also cuts down on SDR ramp up time by teaching them the basics of the role before they even start with you! This isn’t, by any means, meant to replace your training, but it has proven to reduce ramp-up time by up to 50%.
OK, pitch over. I encourage you to take my formula and throw your own numbers in there. See what the real opportunity cost of a long hiring cycle has on your business. You may even have your own formula.
Feel free to let me know what you think of my formula in the comments, and if you want to chat, hit us up on our live chat or give us a call.
Thanks for reading!