Thesis: Rising student debt is having a detrimental effect on the supply of sales positions, and employers must change their recruiting approaches to counteract this deficit.
In a Wall Street Journal article by Lauren Weber, our attention is drawn to companies and their desperation for more young employees to have an interest in technical sales positions. She stresses the importance of these positions through her example of Paycor Inc. She writes:
Paycor Inc., which sells cloud-based software for human-resources and payroll management, said it would have forecast $2 million more in 2015 revenue if it had hit its 2014 hiring goals for new sales reps in 2014.
Weber goes on to give a few hypotheses for this deficit in supply. She states:
The youngest generation of workers, having lived through the financial crisis and recession, is more risk-averse, say sales executives, adding that young prospects are reluctant to enter a hard-charging work environment where success often boils down to a number.
Weber also mentions the existing stereotype that “sales isn’t really a career” and that either anyone can be a salesman or that you’re born to be one. Given these arguments, I believe that Weber fails to mention what could be the leading deterrent to emerging sales positions: student debt.
According to an article by Phil Izzo, student debt from loans has more than doubled in the last 20 years, even when adjusted for inflation. The average 2014 Bachelor’s degree recipient graduated with a debt totaling $33,000. In my opinion, this figure has had an even greater effect on graduates than the recession when it comes to their identification as risk-averse. Graduates risk aversion has even grown to the point where 12 states have 50% of their 25 year old college graduates still living at home. This article, authored by Neil Shah, states that every $10,000 increase in student debt accounts for 2.9% more 25 year old graduates living with their parents. I would argue that a similar correlation would hold between student debt and the tendency for graduates to stray away from sales positions. Sales positions are usually performance based, in contrast with other career paths that have salaried wages. When a student graduates with large amounts of debt, their willingness to take a risk and accept a sales offer goes down.
I feel that in order for employers to combat this growing grudge against sales positions, they must change the way in which they sell the positions (kind of ironic eh?). Weber mentions that technical companies often market their sales positions by highlighting the “competitive environment.” A risk averse graduate will not find much safety in that statement. To stoke demand, I believe that employers should draw more attention to the freedom for creativity and the team environment that often accompanies a sales position.