Friday, August 1, 2014

Let the good times roll – growth and expansion create people issues

Let the good times roll – growth and expansion create people issues

According to a just released survey from the National Association of Wholesalers and accounting firm McGladrey LLP, distributors are experiencing robust sales growth. Actually, the numbers looked even better than one would expect; 74% had growth over the past 12 months and 91% expect to see growth in the coming year. The distributors came up with projections just shy of 9% projected increases ahead. All pretty darn good.

Here are a few factoids from a couple of the National guys:
• Wesco reports organic sales increases of 6% with Gross Margin holding in the 20.5% range.
• Lawson Products reports sales increases of 5.5%.
• Graybar, the electrical giant, reported a record first quarter.
• Praxair and Motion are talking 6% increases.
• Grainger was up 5%

Yes, this is a very rosy outlook for distribution.

Why do I share these numbers? I believe we all need to benchmark ourselves against the industry. It’s easy to say things are great because our numbers are up, but the whole market is up. You are most likely not growing your position in the market unless you are pushing double digit growth.

To sustain growth like this many distributors, including the big national guys, are adding people. According to the same survey, 66% of distributors are contemplating the addition of more people. Many of these positions will be customer facing positions.

Based on experience, finding good people is tough. Actually, much more difficult than you would imagine.

A couple of months ago we wrote a piece for Industrial Supply Magazine called “Hiring Right”.
You can read the whole thing here:  I want to make one point clear, everyone is on the hunt. Lots of people will be “fishing for employees” from your sales department. You may be thinking about going after some of theirs. I had this to say about “stealing” Sellers from the competition:


Talking about this topic is both taboo and time honored in our industry. I would have to wonder if the practice really brings the “dreamy” results some people imagine. Experience dictates that many recruits actually disappoint their new employers. Promises of large customer followings and instant sales results fall unmet. Unless particular care is exercised, people recruited from competitive organizations bring along years of bad habits, unwanted supplier issues and potential legal issues.

I would like to leave you with three of additional thoughts:
• Let your salespeople know you appreciate them. Most people leave good companies because they are upset by something small and it gives them pause to consider other offers.
• Consider your current bench strength. It will take you far longer to find a new person than you can imagine. Start your process now instead of six months from now.
• Keep your eyes peeled for customers and/or supplier people who may be getting cut loose. Some of the Fortune 1000 companies are still shedding people for seemingly ridiculous reasons. There is a good chance of finding a keeper in there.

And even though it may seem self-serving and arrogant, I do recommend reading the article in Industrial Supply.  

1 comment:

Abe WalkingBear said...

Great blog, Frank.
How about "growing" sales people?
No bad habits to break.