How Should Firms Onboard New Salespeople? The Relative Efficacy of Centralized Versus On-the-Job Training
Michael Ahearne, Phillip Wiseman, Zachary Hall, and Seshadri Tirunillai, 2019, 19-125-08
On average, U.S. companies spend close to $1 million annually on sales training, and many are developing “blended” training programs which incorporate digital content and can be administered at lower cost out in the field. In fact, some industry research indicates training hours delivered through blended learning doubled in 2018 over 2017.
How do such blended, on-the-job training programs compare to traditional centralized training programs? Michael Ahearne, Phillip Wiseman, Zachary Hall, and Seshadri Tirunillai examine this issue through the implementation of a quasi-field experiment conducted for close to a year by a firm which had its newly hired salespeople undergo onboarding through either a centralized or on-the-job training program. They analyze the data produced from this study through econometric methods and use a control function approach to address potential concerns related to strategic selection of salespeople into a given training program.
They find that on-the-job training yields greater benefits relative to centralized training, with these benefits being further enhanced for on-the-job trained salespeople when their respective manager can allocate sufficient time for coaching. Specifically, they find higher levels of performance in salespeople when the sales manager guides the process, assisted by digital training content.
Put into Practice
Their findings have implications at the sales manager and firm levels. Digitally supported on-the-job training programs may offer greater cost savings than centralized training programs, and can provide a suitable setting for a new salesperson to internalize the values of the firm in a meaningful way.
Importantly, however, firms that follow this practice should ensure that sales managers tasked with onboarding their salespeople have the resources (e.g., time) to be appropriately involved early on in their tenure. This is particularly important in the first few months of the newly hired salesperson’s tenure, since a significant proportion of the performance benefits observed are realized during that time.
Michael Ahearne is C.T. Bauer Professor of Marketing and Phillip Wiseman is a Ph.D. candidate, both at C.T. Bauer College of Business, University of Houston. Zachary Hall is Associate Professor of Marketing, Neeley School of Business, Texas Christian University. Seshadri Tirunillai is Assistant Professor of Marketing, Marketing C.T. Bauer College of Business, University of Houston.
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