why companies fail to retain employees

Why Companies Fail

Your Guide To Avoiding The 5 Most Common Mistakes That Lead to Business Failure

There are many reasons companies fail: They run out of money, can’t find qualified employees, or don’t know how to manage their resources.

As sales recruitment consultants, Improve Growth has a unique perspective since we’re often called in at two widely varying points in a business’s lifecycle.

One, they’re growing like crazy and need to hire additional sales staff.

Or, more often…

Two – they’re looking to make changes to save a struggling company.

No matter when we come in to assist, we’ve noticed a few things. The businesses that succeed all have several things in common…and so do the companies that ultimately fail.

In this article, we’ll share what causes most business failures so you can avoid these challenges when starting or growing your business.

Why do companies fail to retain employees?

When they first join a company, new hires are the company’s best ambassadors and most valuable resources. But what happens to these employees when they start feeling underappreciated, unimportant, and irrelevant? 

At some point, they start looking for another job. And then they move on. 

Companies that succeed at retaining their top talent invest in processes and programs that support and promote the unique value that new hires bring to the organization.

We can’t help you scale if your business is unable to attract, recruit, and retain employees! This is usually the first place a struggling business needs to get control over. 

Below, we’ll share the exact 5-step framework we go over with all our clients…if you recognize your struggles, pay close attention because these are the top five things I see routinely leading to business failure.

Not having the appropriate training.

You need to show your staff what you want them to do, otherwise, how will they know what is expected of them?

One significant reason companies fail to retain employees is they lack training programs. They don’t train employees to perform particular tasks or utilize specific skills in new ways. Often, employees are never shown how to handle high-pressure situations.

Before you try to hire more employees, make sure your onboarding, training, and continuing education programs (if applicable) are dialed in, appropriate to the job at hand, and well-received by your team. 

Hiring more people to fill open positions is expensive, time-consuming, and risky – make sure you’re making the most of your investment by training new hires appropriately so they’ll stay with your business long-term.

Have the wrong people on the team.

If your company doesn’t understand what’s going on internally with your new hires or doesn’t know what to look for in the hiring process, it is practically impossible to create a successful sales team…and the same holds true for other departments inside your business as well!

This is one of the reasons our data-driven hiring approach is based on reliable data like sales assessments and a scientifically backed process that lets us know about a potential new hire’s Sales DNA before they’re ever offered a position within your business.

You can’t build a successful sales team with people who aren’t ready, willing, and able to sell. If you don’t have a method in place to get that information before you hire a new recruit, your business will suffer because of it.

You lack processes and systems.

Our data-driven hiring approach is designed to attract only top-tier sales talent…but is it possible your business is actually repelling those types of sales superstars?

If your company lacks sales processes and systems that show your sales team how they can grow your market share and their pocket (and their ability to grow with you) top performers will just leave! 

They know they can get a sales job anywhere and succeed, so why would they hang around getting frustrated and losing out on commissions with an unorganized and poorly-run business?

Not only does this mean top performers will be tempted to leave, but it also means non-performers will be attracted and stay because they can often coast through without you noticing…or closing very many sales.

Sales Leadership isn’t in place.

Sales leadership is the glue that holds the entire sales department together…yet often they are poorly trained, not sure how to build a successful team, and they’re pulling double-duty working as a salesperson as well.

The only thing your sales leaders should be doing is creating a self-sufficient sales team! They should be working on understanding their sales team on a deep, personal level so they know what motivates each individual, and can offer the incentives, accountability, coaching, and training they need to achieve their goals.

Without well-trained leaders in your sales leadership roles, your business will struggle on many levels, and for many reasons. Finding the right people for this important role is critical, as is making sure they stick to your sales process and stay working within their clearly defined role.

What’s the biggest reason why companies fail?

By far, the biggest problem we see is that a CEO becomes hands-off and wants others to fix the problems within their own company. Once we’ve seen this type of attitude and behavior, it’s likely the company and/or our efforts will probably fail no matter what help and resources we can provide.

As the CEO, you need to be involved throughout our initial conversation and the entire consulting process. You can’t pass the baton to the VP of Sales and expect good results, no matter how capable and qualified they are.

While you may have worked yourself out of the day-to-day operations of the company, you still have a responsibility to its success. That means participating in the activities that are most meaningful to your growth and further success…I would argue getting your sales team and sales process optimized are two of the most important things you will ever be asked to do for your company.


It’s easy to slip into complacency and start doing the easy thing, especially when it comes to sales hiring. But as you’ve seen, that can lead to your business failing. 

While there are ways to make this process easier and repeatable, running a successful business means you have to get a sales hiring process implemented and executed by everyone who is a part of the sales hiring process.

There are many moving parts to that, so it makes sense your business may need some support! Contact us today to schedule a call and determine if a Sales Organization Evaluation is right for you.

Our Sale Organization Evaluation is the first thing we do for companies who find themselves unable to scale and grow their business. This evaluation will give us insights into “why” you may have challenges steering your business to where you want it to go. We’ll analyze your people, process, systems, and leadership to determine the bottlenecks. And, we’ll give you the roadmap to solve them. 

It could be much easier than you imagine to turn your struggling business around…if you know exactly what needs to be fixed and how.  

Click here to get more information on how a Sales Organization Evaluation can help your business choose success over failure.

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