Receivable/Accounts - Information for Credit and Collection Issues

Monday, December 11, 2017

Who Pays For The Tools?


Talking to a colleague today, we were discussing a large agency that not only makes the collectors pay the fees for their provincial licenses, but also has them pay for their headsets as well.  I think that’s crazy, cheap, and short sighted, and frustrates me beyond end.  It’s like making the accountant in your company pay for his pencils, or telling your administrative staff to go buy their own reams of paper.

Let’s look at what it costs to license a collector across Canada -- even if Ontario wasn’t fazing out the collector license, the biggest provincial costs are $72 per year for the Alberta collector license, $190 every 2 years for the Ontario license, and $208 per year for the BC agent license … so rolling in the other, smaller provincial fees, you are probably looking at $600 per year for a collector licensed across Canada.  That’s $50 per month.  After January 1st, when Ontario no longer requires individual collectors to be licensed, it goes down to $510 per year or $42.50 per month. 

If a collector is licensed nationally, and breaks a headset every three months, at worst you are looking at the cost being under $1000 a year.  Compared to a modest salary, that’s 3% on top of their salary expenses.  If they are a successful collector consistently earning a commission, it may be even less than 1%.  Why would you potentially alienate your staff, not create a supportive environment, and nickel and dime your workforce to save such a small amount? 

Giving a staff member the tools they need to succeed is the employer’s responsibility – that means paying for licenses, headsets, decent computers, ergonomic chairs, and if they want or need them, footrests, standing keyboards, coffee and tea, snack trays, company parking spots, training allowances, health benefits, pensions, and any other perk you can think of.  It’s not only ethically responsible, it shows you are investing in your team, that you care about their wellbeing, and that the employer and employee are working together towards a mutual goal. 

Imagine you have a staff member making $2600 a month and being forced to pay for their licenses and headsets, and a staff member making $2500 a month and not having to – who is going to feel more supported?  Who is going to stay with the company, and who is going to leave when a better job comes along?  Is it worth saving $2 a day in costs per employee?  What value does the employer put on staff morale or company culture?

This is the environment in some collection agencies in Ontario now … now imagine what is going to happen January 1st, when Ontario’s minimum wage goes from $11.60 to $14.00 an hour?   Employers are going to be paying $3.40 an hour or an additional $27 per day (more like $32 after you add in source deduction contributions from the employer).  Is saving $2 a day by making collectors paying for licenses and headsets going to make any difference to the bottom line?  Or will it become even more egregious as employers attempt to make staff bring their own pencils and pay $60 per month for their parking spot and $1 per coffee in an attempt to defray the cost of people working for them.

First and foremost, I’ve been a collector, and I’ve worked in some stressful environments over the years – I’ve been forced to pay for coffee and parking, and I’ve seen hard working collectors been taken advantage of because the employer sees them as an expendable resource – someone else is always looking to be hired to fill empty seats because people don’t stay.  In those environments, the collection staff had a rotating door with new staff members constantly coming and going.  And across the building, I’ve seen IT managers that were overpaid and underworked, in another department there were too many administrative staff, back on the collection floor in corner offices there were supervisors reviewing notelines without contributing to the bottom line, telephone costs were in the thousands every month, and collection software was costing hundreds or thousands of dollars every month in licensing and support.  As a collector, I think you could improve efficiencies on a far greater scale by looking at software, administration, sales, and technology, and making smart business decisions.  Collectors drive a collection agency, generate the revenue that is needed to operate, and they are the nucleus of a successful agency – if you don’t appreciate them, and make them feel wanted and supported, at least as much as the other departments in your company, you are cutting off your own nose to spite your face.  Looking at the ‘collectors pay for their licenses’ environment example above, I’m betting at this same company the IT staff are not charged for the software licenses, and the sales staff are not forced to pay for Salesforce or their business cards.

Businesses should be smart about costs – they are easily controlled.  But smart doesn’t mean stingy, vindictive, mean, or short-sighted.  Sometimes investing in your staff is the best thing you can do.  Buying nice chairs might mean less sick days, paying health benefits might mean your employee turnover might be reduced by 5%, giving flex time or paid time off might mean staff put in some extra time in the evening or on a Saturday when you don’t ask them to.

Here are some interesting articles on company culture that touch on cost and benefit, and name top Canadian employers and what they do for their employees:

https://hbr.org/2017/03/why-do-employees-stay-a-clear-career-path-and-good-pay-for-starters
http://www.businessinsider.com/the-one-office-perk-you-must-splurge-on-2011-3
https://www.theglobeandmail.com/report-on-business/careers/top-employers/canadas-top-100-employers-make-their-workplaces-exceptional/article21427767/

If you have a horror story to share, or a support tool that you pay for your employees, I’m always interested to hear it – if we talk, we make our industry better, not just for the collectors, but our companies as a whole …

Thanks very kindly,

Blair DeMarco-Wettlaufer
KINGSTON Data & Credit
Cambridge, Ontario
226-946-1730
bwettlaufer@kingstondc.com