As boomers retire, decades of experience, and product and market knowledge, leave as well
A hot topic of conversation for many B2B industrial companies is the talent and skills gap due to the generational shift in the workforce from baby boomers to millennials. According to Ben Willmott, head of public policy at the Chartered Institute of Personnel and Development, “Too many employers are sleepwalking toward a significant skills problem that risks derailing their business strategy if not addressed. Not enough organizations are thinking strategically about workforce planning or even enough about the make-up of their workforce.”
Generational skills gap causing a quality gap
Recruiting and retaining millennials for sales teams is often cited as a primary concern. As baby boomers retire and exit the workforce, decades of quality experience, product, and market knowledge leave as well. Loss of quality is often the impact of this workforce transition on sales teams.
A PricewaterhouseCoopers’ (PwC) report, “Workforce of the future: The competing forces shaping 2030,” states that the millennial generation “will make up 25 percent of the workforce in the United States and should account for 50 percent as soon as 2020.” According to the Bureau of Labor Statistics, between 2014 and 2024, more than 28.6 million people will leave the labor force, mainly as a result of aging and retirement. During the same time period, the Bureau of Labor Statistics projects that 36.4 million workers will enter the labor force. These figures compare with 25.4 million exits and 33.9 million entrants during the 2004–2014 period. This translates to 3.2 million more exits and 2.5 million more entrances compared to the previous time period of 2004–2014, showing that although the workforce is growing, it is growing at a slower rate.
This leads to an inevitable and serious skills and knowledge gap. The pain of this accelerated shift will be particularly acute in companies with large sales teams, vast product catalogs, complex go-to-market methods, and large customer bases. Not only will experienced sales reps take extensive industry knowledge with them, but they also will take strong customer relationships, in-depth and broad product knowledge, and pricing know-how.
Quality must transcend the product
A zero-defect manufactured product is usually defined as being error-free or failure-free. But if a zero-defect product is sold at a loss, that is another kind of defect. Product quality must be paired with pricing quality (profitable margin) in order to be truly defect-free in a holistic sense. Thus, both product and process quality are required.
A company’s profit-and-loss performance is largely the culmination of all of the commercial decisions made by sales representatives, including which customers to call, which products to pitch, and what prices to quote.
With 50 percent of the workforce shifting to a less experienced generation by 2020, this should give any manufacturer or distributor cause for concern. It is no secret that the learning curve for new sales reps in distribution and manufacturing is quite steep. Many companies estimate that a sales rep’s time to full productivity is between six months and one year. Sales representatives are asked to manage large books of business and sell from increasingly vast product portfolios. Putting the right technology and tools in place to transfer knowledge as the experienced generations age out and younger workers begin is critical to easing the transition.
Advanced analytics help onboard new hires
Quality organizations can mitigate the loss of knowledge held by exiting, aging workers. Much of the collective experience and wisdom of those exiting the workforce has already been captured. It is embedded in the transaction data companies have been collecting for years. Data regarding which customers bought which products, when, and for how much, generates actionable information. Proactively mining those data and pulling out insights helps to guide new sales reps on each component for key commercial decision making.
Manufacturers accustomed to tracking equipment using overall equipment effectiveness (OEE) are increasingly turning to advanced analytics to tackle a new OEE: overall employee effectiveness.
Prescriptive sales and pricing solutions pull out key data signals and deliver actionable data, including which accounts should be purchasing additional products, and which accounts are beginning to defect. These data also indicate what prices to quote for a given deal.
Those insights serve as a guide for new reps, effectively shortening the learning curve, helping them to better meet customer expectations and sell more at the right prices. These data allow new reps to operate from a better position than even their exiting predecessors.
It is a well-accepted premise that data-driven decision-making that relies on advanced math outperforms experience-based decisions. The human mind is simply not capable of poring through massive amounts of data to come up with the best answer every time, and even if it could, biases would still get in the way of making the optimal decision.
This advanced analytics approach helps close the skills and knowledge gap, besting existing selling and pricing approaches. Access to data metrics is like giving sales reps their own virtual analyst to help guide them to the best possible, or optimal, quality decision every time.
Companies embracing these algorithms experience smoother workforce transition and empower newer sales reps to start selling smarter and faster. B2B company leaders are seeing more sales at better prices across their entire sales force, not just new employees.
Quality professionals understand that data represent actionable intelligence that accelerates profitable growth. AI-enriched SaaS solutions maximize the lifetime value of B2B customer relationships. Quality guidance culled from AI-generated solutions eliminate generational differentiation and emphasizes the immediate value of every customer transaction—as well as the lifetime value of every customer.
Article was first published on Quality Digest
About the AuthorFollow on Twitter Follow on Linkedin More Content by Barrett Thompson