Last month, I just put together a presentation for a handful of VC-backed portfolio companies on building attrition into SDR planning. The broader topic was what happens to your 2024 SDR pipeline number if your quit rate spikes. You can watch a shorter video version of the talk here.

For many companies in the audience, the SDR operating plan was built off of 2023. “We did $20M new logo ARR last year, want to grow by 30%, goal for this year is $26. We need sales development to source 25% of that so we need 2 more SDRs.”

This is a very common aspect of the headcount planning process but what is often overlooked are the underlying assumptions of rep attrition. If 2024 attrition mirrors 2023, no problem. But what if it doesn’t? And is that even a reasonable expectation?

Turning to the BLS Quits Data

We’re coming off of 15 months of the lowest quit rate that we’ve seen in a decade. With layoffs being broadly publicized and stiffer market conditions keeping people in role longer, voluntary attrition (aka quits) dropped significantly during Q4’22-Q4’23.

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For New Englanders like me, Spring means three things - golf, despair over the Red Sox’s starting rotation, and college graduation season.

A new crop of sales talent is readying to enter the market and nearly all of my clients have open headcount for Sales Development Reps. And, I can assure you, most are facing a very competitive hiring market. If you’re looking to attract the class of 2016, you have to be creative. It should come as no surprise that 90% of those under the age of 30 use social media. What you may not know is that Instagram’s usage has surpassed Twitter’s – registering 400M monthly active users.

A new channel for recruiting

If you are looking to drive candidates to your positions, you need to fish where your potential candidates swim.

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Did you pay for your wedding cake on your one year anniversary? Did you put the down payment on your car after your first oil change? Ridiculous, right?

Then why do companies pay after the date of hire for inside sales candidate referrals?

There is definitely a talent crunch for SDR and ISR candidates. I’m seeing referral rewards of $500, $1000 and even $2000 for a single hire. That’s a big payoff, but the long odds encourage little effort. (Note: I’m talking about getting more referrals from your network - not from current employees.)

Many companies pay out after the candidate has been hired and working for 30, 60, or even 90 days. That length of time doesn’t incent immediate action and leads to little or no referral efforts.

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