When it comes to interview questions, there has been a lot written about the right type of competency based questions to ask a candidate in an effort to ascertain if they are the right person for the role. That then begs the question; “Are there any questions that should not be asked in a job interview?”
The short answer is - Yes.
Just as we choose the right questions to ask a candidate to get the most value out of the interview process, it is also important to be aware of the types of questions that legally, are not allowed to be asked. These include questions about the candidates;-
Questions relating to these topics are illegal, as they do not relate to the candidates ability to do the job. The law in Australia is pretty clear in this regard and is covered under the following pieces of Commonwealth legislation;-
The provisions of the Fair Work Act 2009 apply equally to prospective employees (ie job candidates) as they do to existing employees. Each State in Australia also has its own Anti-Discrimination legislation and so should be referred to alongside the Federal laws.
There is an exception in the Fair Work Act 2009 that allows a question if it is directly related to the candidates ability to perform the role. An example may be a question that relates to the candidates physical abilities where a particular role say includes heavy manual labour. Similarly a question about languages spoken if the role requires proficiency in a second language.
Equivalent legislation in New Zealand is covered by;
What If I’m asked an Illegal question?
Most HR professionals will be across the legislation and therefore know what can and can't be asked in an interview. This mostly becomes an issue when functional managers who are not across the law/have not been properly briefed, become involved in subsequent interview rounds.
Sometimes an Interviewer may not ask an illegal question directly but instead frame it in a more casual way such as “When did you leave school?” - In an effort to establish how old the candidate is.
If faced with an illegal question during an interview, it is often best to respond with another question. Such a tactic may also make it seem like you are simply asking for clarity or more information. E.g., “Can you tell me a bit more about the role?. I’m not sure how this relates to the job”
Candidates must also be careful not to answer interview questions that relate to proprietary information relating to their current and/or previous employers. If faced with such a question a simple response like “I’m sorry I can’t talk about that” will suffice. It may feel abrupt to answer in such a way but you will gain confidence in knowing what can and cant be asked and that you are prepared with an answer.
It can be difficult in the pressure of the interview environment when you are trying to be open and responsive to each question. The simple rule of thumb though is to ask yourself in each situation - How does the question relate to the job and your suitability for it.
Information provided in this article is general only and it does not constitute legal advice and should not be relied upon as such. Fifth Executive provides no warranty as to its accuracy, reliability or completeness. Before taking any course of action related to this article you should make your own inquiries and seek independent advice (including the appropriate legal advice) on whether it is suitable for your specific circumstances.
.The recent year-end results announced by leading insurance broking groups throughout Australia and New Zealand highlight the difficulties that the Broking sector has faced over the last 12 months, and will continue to face in 2021-2022.
Sustained revenue pressure has forced Broking firms to focus on efficiency, reducing discretionary spending accumulated during the buoyant markets of previous years. While brokers have generally been successful in remaining profitable despite these difficult conditions, further efficiencies will become harder to find without genuinely transforming established Broking business models.
InsurTech start-ups and direct market insurance providers are also gaining traction and starting to win greater market share. This is having a direct impact on Broking revenues. Against this changing and increasingly competitive landscape, it is imperative that Brokers develop and implement effective new growth strategies.
Brokers are targeting three key growth strategies moving forward;
Mergers and Acquisitions
Historically, mergers and acquisition tend to be more prevalent during harder economic times. Smaller sized brokerages are typically absorbed by larger brokerages as the larger brokerages seek enhanced scale, product enhancement and or improved internal efficiencies. An impact of this increased merger and acquisition trend has been the consolidation of various insurance lines. Typical of merger and acquisition activity so far in 2021 was the recent acquisition of Canberra based Mutual Brokers Pty Ltd by AJ Gallagher. Likewise, Steadfast’s acquisition of Coverforce Pty Ltd.
According to Global Data’ 2021 Brokers Survey, 74.4% of Brokers intend to expand their geographical footprint over the next 12 months, once lockdown restrictions are lifted.
With the current tight market conditions we should expect to see further market consolidation in the months ahead.
New Business Development
As the insurance sector moves on from the COVID era, business development activities will be increased significantly. A key strategy in winning new business from competitors revolves around maximising value to clients and insurers, which requires a considered sales and marketing approach.
Traditionally broking houses have combined the roles of broker and business developer into one. This model has served the industry well for many years as brokers, as the subject matter experts and trusted advisors, have been able to effectively convey the market options to their clients.
An increasingly competitive market has forced some broking houses to rethink this approach and this has seen the emergence in a small but growing number of firms (particularly amongst the larger independent firms), of dedicated and professional sales positions working alongside brokers.
These Sales resources tend to have extensive B2B sales backgrounds, are trained in one or more of the recognised sales methodologies (Value Selling, Solution Selling etc.,) and have a strong understanding of insurance and broking.
Professional sales resources are able to open the client doors and bring in the subject matter experts (The Brokers) to work in tandem to effect the sale – A model that has been employed successfully in other industries such as Tech and Medical/Travel Assistance. This model also helps preserve the “trusted advisor” status of the broker. In building a successful sales team, it’s important to identify sales staff with the right sales experience, competencies and behaviours.
Other opportunities to differentiate their offering include;
-Improving the quality of the advisory services provided
-Tailored risk management solutions
-Increased insurer choice
In an article appearing in Insurance Business Australia (May 2021) Cara Morton, CEO of Insurer CoverMore says that the Insurance Industry as a whole is “lagging in terms of pivot to digital and innovation”. Digitisation is the use of Websites, Apps, Email, Social Media (LinkedIn), Live Chat, Text and other digital channels to reach out to customers and/or streamline company processes and the customer interface. While a full exploration of the impact and direction of digital technologies on the Broking industry is outside the scope of this article, there are significant opportunities for Brokers in this area to improve their customer/business development reach and to also drive operational efficiencies.
According to a 2013 Report (Social Media and Sales Quotas, UK) - 79% of salespeople who use social media to make sales outperform those who did not. This statistic also ties back to the point made above regarding the use and skills, competencies and behaviours of sales professionals.
An informative and engaging website should be a driver for lead generation and capture and should be considered as an essential and key digital sales platform. The website is often the first exposure that potential customers have of a business, It is therefore highly important to create a strong first impression and project a professional brand.
Traditionally brokers spend a lot of time talking with clients providing them with rich customer and industry data which is often under utilised. An online platform can provide the opportunity to demonstrate this knowledge and establish thought leadership capabilities across a range of risk management areas. Such platforms will allow brokers to build relationships with their clients over the longer term with engagement and high quality content.
While the greater impact of Digitisation on the Industry is still to play out across Large vs. SME, Commercial vs. Personal Lines, there are immediate opportunities for agile broking houses to take advantage of readily accessible digital platforms and skilled sales professionals to differentiate their offerings and drive their businesses forward.
A question we are often asked by our clients is “What should the split be between the base salary and commission for our sales people?” The answer depends on a few variables, which we will explore in this article, but before we get to that, lets start with a few definitions;
On Target/On Track Earnings. (OTE).
This is the salary (usually expressed as an annual figure) that a Sales person can earn if they achieve 100% of their allocated sales target/quota. It is made up of two components; A Base Salary (BS) and an At Risk Component (ARC).
Base Salary (BS)
As the term implies is the amount paid to a Sales person before the payment of commissions.
At Risk Component (ARC)
Is the “incentive” component or commission paid to the Sales person for achievement of their targets/quotas. So named as this component of the salary package is “at risk” of not being paid if the targets are not met.
OTE = BS + ARC
When is the ARC paid?
This depends upon each organisation but usually, commissions are paid on a periodic basis (usually quarterly against quarterly sales targets) as opposed to annually. Complex sales/sales with a longer sales cycle may be paid annually.
The ARC can also kick in at some point before 100% of sales targets are achieved – i.e., at 90%. Some organisations also apply an “accelerator” after the achievement of 100% of target to further incentivise behaviour.
The following table provides an example.
A further consideration is whether to retain some proportion of the quarterly ARC payment to be paid at year-end. The aim of which, is to incentivise consistent performance over the year and not just in one quarter. It is common practice to retain anywhere up to 25% of the quarterly payment, which is, then payable at year-end on achievement of the individual’s annual sales target.
What should the split be between Base Salary and ARC?
We call this split the Pay Mix. The Pay Mix is the ratio of Base Salary to ARC. In the previous example above we have used a 60/40 split of Base Salary to ARC.
Where this ratio is set depends on a number of factors including;
The nature of the sales role
In the example above we used a Pay Mix of 60/40 which would be common for a front line “hunter” sales role, often more directly responsible for signing new business; Business Development Manager/Business Development Director etc. The range here could be from 50/50 to 70/30.
For “farmer” sales roles, e.g. Account manager, Account Executive who may carry smaller new business targets the Mix could range from 90/10 to 70/30.
For Senior Sales Manager roles, e.g. Head Of Sales, Sales Director where delivery of targets is through teams, we may expect to see the Mix around 70/30 - 80/20.
For these roles the larger % Base Salary can also attract higher quality candidates.
The length of the sales cycle
For organisations with a shorter sales cycle, we may expect a lower Mix as deals are being closed more regularly. For longer sales cycles, a higher Mix (i.e. higher Base Salary) can help keep the motivation levels high to stay with it.
The complexity of the sale
For complex project/process sales the Mix again will usually be higher in order to attract a candidate with the requisite skills and industry experience.
Finally, The overall OTE should be set somewhere around 1/5 of the Sales Target. In other words the Sales person should be earning the company 5 x their OTE.
What are the Pros and Cons of OTE?
If you or your team need assistance with designing your organisation’s OTE plan, the Fifth Executive team has over 50 years combined Sales experience and can assist today. Call us on (02) 9258 1130 or visit our website at www.fifthexecutive.com.au
Congratulations ! You have successfully passed your initial interview with the Company and now they want you back for another round. As you successfully progress through these subsequent interview stages, you are likely to be interviewing with Managers who are higher up the food-chain and/or with Managers with a cross functional interest in the Sales team who are one or more steps removed from your day-to-day. It is important therefore, that you tailor your messages in these interviews accordingly, by addressing their higher order needs, and the specific issues that could be keeping them awake at night.
For those of us that are familiar with the work of Robert Miller and Stephen Heiman (MillerHeiman/Strategic Selling) we know that for more complex sales processes, there are a number of buying influences in the Client organisation and they are all on their own specific purchase paths and have their own requirements that must be met. (Coach, Economic, User, Technical buying influences). In a similar way, your value proposition needs to be framed in the context of the person you are interviewing with.
As an example: You are Interviewing for a senior sales position and have had a good first round interview with your prospective boss - The National Head of Sales. They now want you to Interview with his boss the Regional Sales Director. A lot of your messaging will obviously be the same but what are some of the issues that this person faces that your prospective immediate boss may not? These issues may relate to the sharing of best sales practices across the region, the leveraging of client relationships from one country to another etc. How have you done this in your current role?
Your next interview is with the Regional General Manager - This person will probably want to know, - How you can support the business across functions, ie, How can you strengthen the connections between the Sales department and other functional departments in the business which helps drive organisational efficiencies and profitability. This approach is not about rewriting your whole pitch, but rather letting the interviewer know that you are cognisant of the challenges that they face, and how you will be able to support them in your role- even if in a small way.
Also, on the issue of cross-functional collaboration, interviews with the more senior managers of an organisation are also often through a lens of how you are able to support the objectives of the business beyond your immediate sphere of influence. We have discussed above, some of the areas that are directly within the scope of a Salesperson's remit that can help you demonstrate your collaborative approach; you should however also use these opportunities to shine a light on your soft/non-technical skills.
In his article "Soft skills are too important not to be discussed" (Lou Adler, LinkedIn May 4 2020) Lou talks about the value of candidates who have a range of soft skills. He uses the example of a candidate whose consistent election to a number of organisational committees in their present and past companies would indicate someone having the strongest of non-technical skills. What similar things have you done/experienced that could demonstrate your added value, particularly in these subsequent round interviews?
About Fifth Executive
Fifth Executive is a boutique Sales Talent Development Agency that specialises in finding and growing Sales talent for organisations involved in B2B sales. We have over 50 years combined Sales and Sales Management experience.
We're certainly not Engineers but we do know a little high school science.
We know that a fulcrum is something that allows you to get a greater output from the amount of energy put in. (Think of the triangular shape in the middle of a playground see-saw). The fulcrum allows you to lift a much greater weight on the other end of the see-saw than you otherwise would have been able to had it not been there.
At Fifth Executive we very much see ourselves as the "fulcrum" in that central role between employers and candidates, providing both parties with capability through good communication, information and talent development.
This blog page is designed to support those objectives by looking to provide topical and relevant information to employers and candidates alike in the area of Sales. Some articles will be written from our 50 year combined sales and sales team management experience, others will be from published authors that we think have the hit the mark on a topic, and from time to time we will be interviewing subject matter experts from HR Managers, to Sales Coaches to successful candidates on a range of Sales related issues.
Okay, science lesson over and back to the business of Sales!
Martin and Graeme.