Case Analysis

Sales Force Training at Arrow Electronics

Arrow Electronics, the world's largest electronics distributor, implemented a college recruiting program to hire salespeople in mid-1980s. Increasing the professionalism and skill set of the sales force in the company and thus the company’s performance maximisation was their motto. But company failed in their unique idea since they were not able to retain the skilled labour which they created by the training program. The benefits were drained miserably to its competitors.

It was mid-1980s Arrow was trying to build its sales force and the industry was having few salespeople who were having higher education or a college degree. Recognizing company’s strength in its sales force, Arrow decided upon a strategy of hiring college students and training them to attain the skill level required by the salesperson. There are a couple of reasons which lead the company to that decision. Initially industry had a lack of sales personals. Then hiring from the competitors was so common practice such that the salespersons had a chance of changing the company routinely in every two to three years. Thus no employee liability and the sales were tied to personal relationships. The current salespersons in the company were having age of 30-40 years, with no higher educational qualifications. But they were high on their energy & aggressiveness. The sales were highly relation based and they did it in their own way since the lack of any training program. Also it was difficult to assert new ideas to those experienced salespersons. The expectations of the new recruits by Sprouts training was that they would perform well by understanding customer strategies. Unfortunately this did not reach the fruitful results it wanted to have. Then the Pathway was introduced.

Then understanding the mistakes made, Arrow, in the guidelines of their CEO Mr. Kaufman developed a new training program called pathways. The program was made strict to avoid any pitfall happened in the earlier case. There was a 30 minutes first round interview followed by the second round for the selected. Then those students were given training. More importantly compensation package for the trainees were so attractive. Base salary, an incentive bonus, and a ‘Pathway special bonus’ were competitive enough with the entry level positions offered by the other companies. And they hoped pathways would be more successful than the Sprout program.

After analysing the results of first class of pathway recruits Arrow continued to see some of the new hires leaving the company. The options like targeting specific campuses with programs like sales & industrial distribution, stop hiring from colleges and recruit only experienced sales people from other industries, focus interviews to screen for people who had perseverance and could deal with adversity, defer the signing bonus longer, Steve Kaufman suggested they change the training to be more like the original Sprout program 13-week boot camp and work had to better communicate the expectations and career path for new hires at Arrow were considered to reduce the turnover.