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September 1, 2007

Help Wanted: A Good Inside Sales Rep

Why new graduates shun the inside sales rep job.

James Geddes has tried it all. Newspaper advertisements. Online job postings. Even hiring recruiters to do the legwork for him. Nothing works. Inside sales jobs languish unfilled for six to 12 months, while other sales representatives at Alliance Metals pick up the slack.

Successful inside sales reps at other metals companies don’t want to make the switch. Those who are looking often don’t have metals industry experience and have turned out to be mediocre.

“Of all the openings we’ve had, these have been the most difficult to fill,” says Geddes, who took over as CEO of the Philadelphia-based company 3 1/2 years ago.

Geddes is hardly alone in his frustration. Leaders from across the industry grumble about the challenges of filling such positions, regardless of whether they’re looking for recent college graduates or experienced talent.

Why is it such a problem? There is no pat set of reasons, of course, but metals industry hiring managers have some ideas. The job is too clerical for choosy college graduates. The metals industry competes for sales talent with employers in faster-growing industries or those that offer better compensation packages (see “No More Ugly Duckling,” Forward, May/June 2007). Young recruits complain that advancement doesn’t come quickly enough, reflecting an impatience that is typical of members of the Millennial generation just entering the workforce.

Experienced inside sales representatives often are unwilling to change jobs. They like where they are. The pay and benefits offered at a new company may not be sufficiently attractive. Or they may not want to disrupt their families or change current routines, such as a familiar commute.

“What are you going to give them that they don’t already have?” asks Robert Knopik, a former steel executive and founder of the Leadership Search Group, an executive search firm in Barrington, Illinois, that specializes in the metals industry.

He’s given up trying to recruit experienced candidates for inside sales positions “because they’re impossible to find,” he says. “Everybody wants them.”

The need for inside sales help will become more pressing as Baby Boomer employees near retirement. Some companies have stepped up college recruiting or brought in interns. Others try to hire those with inside sales skills from related industries. But companies seem to be reluctant to change their hiring models or make alternative work arrangements, such as allowing workers to do their jobs from home.

THE MILLENNIAL RADAR SCREEN

In the past, new young employees often were willing to bide their time in an inside sales position— even if it took years—knowing that if they proved themselves, there would be opportunities eventually in outside sales or middle and senior management. Today, with even greater opportunity thanks to the aging workforce, young people typically want to be on a much faster track to career advancement.

If they want a role model, they can look to top executives who began their careers on the inside sales desk, such as Bill Jones, CEO of O’Neal Steel Inc. Jones joined the Birmingham, Alabama, service center in 1976 and was named to the company’s top job seven years ago after serving in such positions as outside sales representative, director of marketing and vice president of the Birmingham division.

“Inside sales is as good a position as any I can think of in the industry to learn the business and take on greater responsibility down the road. It lends exposure to all facets of the business,” Jones says.

Part of the problem is simply getting young people interested. At Alliance Metals, Geddes’ most recent solution has been to hire a summer intern from West Chester University of Pennsylvania, where he is an adjunct professor in the business school. Senior marketing major Ryan Corcoran spent the summer in marketing and inside sales positions at Alliance. The company hopes to hire him full time after his December graduation.

With an intern, “it’s a very lowrisk hire,” Geddes says. “We’ll work together for three months. He’ll know if he loves me; I’ll know if I love him. It’s a chance to live together before committing.”

Corcoran says he never dreamed of taking a job in metals, but says he would take the job if it’s offered. After two months on the job, the 22-year-old says he’s improved his customer service skills. “I feel at this point like a productive member of the team.”

Some executives say they get the best results by not aiming too high.

A.M. Castle recruits from regional or smaller schools such as Northern Illinois University and California State University, Long Beach, rather than big names like Northwestern University and University of California, Los Angeles, says Paul Winsauer, vice president of human resources at the company, based in Franklin Park, Illinois. By targeting the smaller schools, “we’re a bigger fish in a smaller pond.” At the top universities, Castle is up against better-known competitors such as Procter & Gamble, Kraft Foods and Dell Inc.

O’Neal hires from schools with industrial distribution programs, such as the University of Alabama at Birmingham, one of a handful of colleges that offer such specific training. Kristen Craig, the university’s industrial distribution program manager, says many of the students work full time while attending classes. It helps that Birmingham is a city with a lot of steel and manufacturing operations.

The UA-Birmingham program is a hotbed for recruiters across different industrial sectors, and 90% of the jobs are in sales. Students realize inside sales is an important training ground, and can actually become frustrated if they don’t get that experience, Craig says. Some complain that they are thrown into outside sales positions before they are wellversed on the product lines.

But Millennials, as a generation, want to advance quickly. Although students “are very relieved to have spent some time in inside sales, our students don’t aspire to go into inside sales and remain there,” Craig says.

For those who take inside sales jobs, love the work and remain, benefits like profit sharing and a feeling they are playing an integral role within the company are important, Craig says. “If companies treat it like a clerical role and don’t require a college degree, our students are eager to move beyond it.”

Alliance tries to promote workers quickly if they are qualified. Fred Weidner, 25, who was hired for an inside sales position a year ago, already is making a few outside sales calls.

Geddes would be skeptical of someone who applied for an inside sales job and wanted to do nothing else for the next 20 years. “It would be a very tough sell to me,” he says. “Ideally, this should be a feeder job for other things,” Geddes says.

Executives say it’s important to keep young inside sales representatives engaged. “Our challenge is to keep them challenged,” Jones acknowledges. O’Neal trains new inside sales hires in product knowledge, customer service, phone skills and the negotiation process.

“A two-day lecture isn’t going to cut it any more,” adds Jeff Hill, O’Neal’s corporate training and development manager. “You definitely have to keep evolving your training to try to really appeal to the tech age.”

O’Neal might put the most promising hires on the fast track with opportunities to work in each department, such as operations, finance, purchasing and human resources, as well as shadow salespeople and go on sales calls.

THE SEARCH FOR EXPERIENCE

But not all companies are ready to build new talent and would rather buy it from someone else, particularly given the job’s importance.

Having a metals industry background is less important for a new hire than experience dealing with details and time constraints, so Samuel Son & Co.—Midwest, considers those with experience in office management, purchasing or retail, says Thomas Sennett, vice president and general manager.

The company doesn’t have high turnover because it invests so much in the hiring process. “We have a hard time finding the right fit” and will interview 15 or 20 people to fill one position, Sennett says. The company also turns to headhunters for help.

Atlas Tube in Chicago also opts for those with work experience, even if it’s not in metals. Customer service manager Matthew McMahon reasons, “I need to teach people steel, so I want them to understand what customer service is all about.”

Many of Atlas Tube’s inside salespeople have been in their jobs at least 10 years, but as openings arise in the future, McMahon says there will be more of a need to recruit young people at college campuses “who you can mold your own way.”

He says a healthy inside sales department should be comprised both of those for whom it is a career and others who want to move to outside sales. If everyone is longing to move to outside sales, they never build strong relationships with customers. “Customer relations takes time and nurturing.”

Some service centers respond to the hiring problem by paying more. Inside sales representatives can start at $35,000 to $40,000 a year with no experience.

O’Neal starts young recruits at $40,000, while sales reps with more experience can earn $60,000 or more with incentives.

Companies get what they pay for, and some don’t pay enough, says recruiter Jerry Vogus, senior partner with the recruiting firm Cumberland Group. Some companies pay only $40,000 for four years of experience, but should be paying more than $50,000 at that level, he says. “Good inside people really are worth their weight in gold.”

If metals companies are unable to attract inside sales representatives through traditional channels, perhaps a new model is in order. Could the job be handled off site? That might make it attractive to people who need to work from home, such as mothers with young children and workers seeking a flexible schedule.

Some metals companies, such as Atlas Tube, allow employees to work from home on a temporary basis—to accommodate a family emergency, for example. But they hesitate to start down that path in a dramatic break with tradition and frown at the notion of letting inside sales representatives— especially newcomers—work from home. “One of the most powerful training tools we have is co-workers. It’s like coaches sitting around you,” Winsauer says.

But as the workforce becomes tighter and employees seek more flexibility, McMahon predicts the metals industry will have to rethink its position if it wants to retain top talent. “I do think that’s coming if you want the best of the best,” he says.