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Inside Heartland Payment Systems' Successful Sales Recruiting Machine

October 12, 2010

With new growth initiatives now on the table for many industries, Heartland Payment Systems Inc. is doubling the size of its sales force.

The Princeton, New Jersey-based payments processor announced in early 2010 that it will hire 1,299 new sales professionals by the end of 2011. Eight hundred positions are still open.

To fill the jobs, Heartland is relying on an approach to recruiting, assessment and incentives that it has refined over the past decade. That formula has helped Heartland capture the No. 1 spot the past two years on Selling Power magazine’s 50 Best Companies To Sell For Now list for sales professionals. The list is based on the compensation, training and career mobility.

While many employers are meeting new demands with temporary workers or independent contractors, Heartland’s belief is to hire full-time payroll employees.

“It would be less expensive for us to use independent contractors, and that’s certainly common in our industry, but we don’t believe in that and never have,” says Sanford Brown, Heartland’s chief sales officer. “We have a brand to protect.”

Heartland, the fifth largest payments processor in the United States, delivers credit, debit and prepaid card processing and payment services to more than 250,000 business locations nationwide. The company reported revenue of $1.7 billion for 2009 and employs 3,400 workers nationwide.

Recruiting more than 1,000 employees for specialized selling positions requires a mix of strategies that fit with the philosophy of hiring full-time workers. Heartland relies on a six-person in-house recruiting team supported by several recruitment process outsourcing, or RPO, providers that specialize in certain industries and local markets. The internal recruiting team works across most geographies and job titles.

“We run a grass-roots recruiting organization consisting of sales professionals and managers,” Brown says. “But as we grow, we know we need to remove some of the administrative functions from the sales managers, so we are using a variety of methods for sourcing, including social media and job boards, and we outsource some portions of recruiting. But at the end of the day, it always comes down to the sales managers.”

The internal recruiting team and two RPO providers are handling the new sales positions. The jobs do not require a college degree, but candidates must have prior success in selling business products or services.

All candidates take an assessment test. “We looked at standard tests but couldn’t find one that fit,” Brown says. To develop a customized test, the company studied its top 100 and bottom 100 sales professionals and isolated the traits for both.

“We found that sales skills are the least important characteristic for success,” Brown says. “The most important are behavioral traits related to values and motivation.”

The company bases about one-third of the hiring decisions on the assessment test score; one-third on the candidate’s work history, the interview and references; and one-third on the intuition of the sales manager. Brown believes this mix produces solid hiring decisions.

“When we’ve failed, it’s because there was an emotional factor—a marriage breakup or a personal problem, for example—that we didn’t uncover and that created an obstacle to the person’s success,” he says.

Several identifiable groups account for most of the company’s new hires. Twenty percent are first-generation immigrants.

“They are attracted by the huge upside potential and by the fact that this job is more than just a job,” Brown says.

Another key group is former small-business owners. “If you run a small business, you have to be proficient in selling yourself to some extent,” he notes.

Other new hires have been sourced from industries that laid off large numbers of employees during the recession.

“We recruit a lot of business-to-business sales professionals from the insurance and mortgage industries,” Brown says. “And recently we’ve hired salespeople from the pharmaceutical industry, which is in a very sharp downturn. These are highly trained people who simply need a product to sell.”

The new hires span several age groups.

“The first consists of young people with two to four years in the workforce who have seen the good and the bad of sales work and want something better,” Brown says.

The second group consists of people with substantial work experience who want to take a new direction in a second or third career.

“A candidate may be someone who has owned their own business for 10 to 15 years and wants to break from those demands,” Brown says.

In addition to meeting the hiring goals for new growth, Heartland must engage in heavy ongoing recruiting to cope with high turnover. Among the company’s sales professionals, turnover is 50 percent in the first year.

“This is higher than we would like to see,” Brown says. “Our goal is to reach a retention rate of two out of three in the first year.”

After the first year, turnover drops to 12 percent, and after the third year it falls to 5 percent.

“In other words, if they stay for three years, we have them for life,” Brown says.

The company offers new hires a choice of two compensation plans. One pays employees on a commission-only basis from the first day on the job.

“This is our most aggressive compensation structure, and 75 percent of new hires choose it because of the high potential upside,” Brown notes.

The other is a hybrid that pays employees for completing each of four levels in the sales process regardless of whether a sale is made. Employees who select this plan typically migrate to the more aggressive commission-only plan after three to six months on the job, Brown says.

“Sales is all about confidence, and once they gain some confidence, they want to change to the more aggressive plan,” Brown says.

The company’s pay target for new hires at the end of their first year is $70,000 to $75,000 in cash compensation. By the third year, successful sales professionals earn $110,000 to $120,000, Brown says.

Heartland’s sales professionals earn a signing bonus and commission on every sale they make, plus a monthly residual percentage as long as they retain the customer. When sales professionals reach a pre-defined level of success, they can earn stock options through promotions and incentive programs.

“Historically, every year we have more than a dozen sales professionals who out-earn the CEO,” Brown says.

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