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The True Cost of an SDR (Sales Development Rep)

The True Cost of Hiring a Sales Development Rep

Traditionally, SDRs have been the public face for most companies. They focus on outbound prospecting, setting up qualified meetings, and moving leads through the pipeline.

Many different expenses come with hiring new salespeople.

Beyond hiring costs, you should consider base compensation, commissions, benefits, and travel.

These costs add up quickly.

The truth is, it takes a long time for the sales rep to begin to repay the company. And it takes a new SDR even longer for the company to break even on its investment. 

It's been estimated that the average cost of hiring a new sales development rep is $100k.

But hiring only tells part of the story.

The True Cost of Losing a Sales Development Rep

The Bridge Group and For Entrepreneurs surveyed 342 B2B SaaS companies and found a growing shift within their sales organizations.

Their data does a great job shining a light on the real hidden cost associated with building an internal sales department. They found that the average turnover rate of an SDR is 34 percent, and nearly two-thirds of those SDRs left voluntary.

saleshive 34percent sales development representative attrition chart

From there, the data gets worse, with many companies showing even higher attrition rates. In fact, 12% of companies experienced annual turnover rates over 55%.

SalesHive sales development representative attrition rates chart

There are many different reasons why a sales rep might leave your company. Many get recruited by other organizations, and underperforming SDRs will need to be let go. Some sales reps will decide it's time to transition to an entirely new career for any number of reasons.

Regardless of the reason, the consequences extend far beyond the sales team. Higher turnover rates lead to more wasted time and money, more missed opportunities, and more intangible losses to consider.

Continually losing team members is demoralizing to everyone in the company, and hiring new employees is not only expensive. It’s also time-consuming.

It takes a lot of resources to interview new employees, check references, and file the paperwork. Training a new SDR can take months. And it's impossible to know what kind of effect a high turnover rate has on your customers.

Not to mention, a high sales rep turnover can have a snowball effect on the rest of the team. The team is continually performing below capacity, and the hiring manager is always scrambling to bring on new people.

The problem is, the hiring manager isn’t hiring for growth. They get stuck in a cycle. Treading water until they can get the newest person up to speed.

A Better Solution

There are a number of tips we could give you on how to improve your SDR turnover rate.

We could make suggestions on how to hire, improve your employee onboarding and train your reps, and even if you did everything by the book it could end up being more wasted time, money, and resources.

The real problem is that building an in-house sales team is simply no longer a viable model for most companies.

What if we told you there was a solution to executing effective sales development strategies that evolve and scale with your goals.

Consistently delivering results for less cost and time investment, and none of the inherent risks of building an in-house team.

Also consider the costs and benefits of hiring more than one outsourced lead generation company to find the right partner for your needs.

At SalesHive, we saw the writing on the wall when it comes to in-house sales development reps. This is why we developed our own sales development team that will help you accelerate your sales pipeline. We will research your leads, manage their objections, and schedule meetings for you.

We will write and optimize your email copy and reach out to every lead six or more times per day via email, social media, and direct mail. And we do all of this at a fraction of the cost of the average sales rep salary.

Love this article? Also consider reading our post about "Creating successful outbound email campaigns in the new decade."