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When Salespeople Leave Their Jobs

Stealing your pipeline and customer list.Approximately 40% of sales people leave their jobs each year, either willfully, or involuntarily.   There are a number of factors that contribute to this terrible situation.  I’ve talked about a number of them on this blog.  ESR has some very strong recommendations, as well, based upon our research.  But that’s an issue for another day.

What I’d like to discuss is what happens to those people when they leave. 

Derrick Moe wrote a post about “Garden-Leave Clauses.”  Evidently he picked up this phrase from a CNNMoney article

A growing trend: So-called garden leave (or gardening leave) clauses, which require an employee to give at least 90 days’ notice of his or her departure, during which time the employee must stay home and avoid all contact with customers. (Hence the name: You’ll have time to do plenty of gardening, or whatever else floats your boat.) The purpose of a garden leave is to give your employer a head start in trying to hold on to your clients before you begin working at a different firm.

As a consultant, I’ve been involved in too many situations where salespeople left a company and brought with them pipeline reports, forecasts, customer databases and other highly proprietary and potentially damaging materials.  Are the people that lie on their resumes (and during interviews), the same as those who, when they are fired for cause, would do anything to get themselves hired by your competitor, including sharing your most highly valued information?  It’s likely.  In my experience, rarely are salespeople a threat when they are performing well and decide to leave. 

As a sales leader, you can try to limit any individual sales rep’s access to team- and company-wide information, but that’s often very hard.  Especially in smaller companies.  You can have all your employees sign non-compete clauses as a precondition of being hired (or getting their final paychecks and expenses), but that’s either illegal  in some places (in the latter case) or will just not hold up in court.

I agree with Derrick that this is an approach that might work in some situations, but it far from ideal.  I think a company would have to worry about too many people taking them for a 90-day free ride. 

I’ve not heard of any foolproof way to avoid this problem.  There are no silver bullets.  If you’ve got one, please let me know. 

In the meantime, if you’re up at the average 40% annual attrition rate for salespeople within your company, implementing a proven hiring methodology will help.  So will a commitment of time, money, resources and unfailing support in helping your salespeople to be successful. 

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4 Responses

  1. Dave, one thing that would really help this situation is companies refusing to accept new hires using confidential information brought from the prior company.

    It takes two to tango, and if companies encourage or accept their new salespeople leveraging the old company’s confidential data, they shouldn’t be surprised when the same trick is pulled on them when that person leaves. [I have seen this happen more than once.]

    Here’s an idea that would stop the practice in its tracks–don’t hire anyone who offers to bring pipeline reports, customer data, etc., along with them when hired.

    regards, John

  2. John,

    Thanks for your comment. I like your idea.

    The problem continues to be that there are enough companies out there that would welcome confidential information brought to them by a job candidate.

    The confidential information doesn’t have to be a document or computer file. It can take the form of a sales person sharing with a competitor the issues that their former company is having–angry customers, quality or customer service problems, law suits, etc.

  3. I agree with you, Dave. The issue i have is that the same companies who welcome confidential information brought to them by a candidate are indignant when that employee shares their information with his/her next employer.

    My point is that salespeople who use confidential information as currency are unethical, and companies that accept confidential information are also unethical. Both unethical practices have to be addressed, or the problem will persist.

    Let me tell a story. Back when I worked for a company you know that starts with a big A, we had a certain systems integrator “partner.” This partner was always coming to me offering insight on our competitors, for whom they also served as partners. At the same time, they wanted to engage on some of our most strategic undertakings (like the outsourcing cost model, probably the most proprietary item we had).

    I told them I didn’t want to hear about my competitors. I didn’t trust their information or motives.

    I also told them to stay out of our cost model. Whatever insight they could add to it was more than offset by my certainty that they’d use some of that information as currency with my competitor.

    Soon, they stopped offering me competitive insights. But I never gave them access to our cost model.

  4. In the defense of salespeople, more and more employers are demanding proven track records of individual sales for consideration. These reports are all we have to show all the blood, sweat, and tears we have put into our jobs. Salespeople are judged by numbers and in hard economic times like these, having a record of high sales will increase chances of employment and pay. In reality, a lot of times this information can be found on the internet or is leaked by higher-ups in the company. Is it really going to put my company at risk if the competitor knows my individual sales or sales of the region when they probably already know the entire company’s revenues?

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