Receivable/Accounts - Information for Credit and Collection Issues

Friday, September 18, 2020

Overworking The Collection Industry

Late nights, mandatory Saturdays, working through lunches – there are, as we speak, collection staff burning the candle at both ends … and it’s not a good thing.  Let’s look at how collectors can be overworked.

Many agencies focus on Key Performance Indicators (KPIs) as a measurement of efforts of collections – it could be calls handled per day, revenue generated, talk time, and so on … and if treated obsessively, management can start to look at collectors as a collection of statistics rather than human beings.

Many years ago, I worked for a number of agencies that would require ‘mandatory Saturdays’ or a late night for staff that were behind target … the struggling team members would come in on their weekend, and crank out another hundred calls, in the hopes of generating more revenue.

It never really worked.

The reason was, these collectors had something fundamentally wrong in their process – either it was a training issue, a portfolio liquidation issue, a management of their workday between Monday and Friday, or something along those lines – and just adding more gross effort didn’t add any significant revenue to the bottom line – and worse, either the staff were paid an hourly wage, so the cost of bringing them in outweighed what revenue they generated, or the staff were on salary, and it abused the employee’s personal time for no benefit to them.  Regardless of whether the staff were paid for the extra time, it lowered morale and company culture because it singled out and pushed staff for non-performance, and created a group of second-class citizens in the company.

When things go right, a collector spends 20% of their time generating 80% of their revenue – things just click.  And the remainder of their time is used to top up the final 20% of their revenue.  Adding more time actually lowers the average time in vs revenue out equation.

We could all collect a near infinite amount of revenue if we had an infinite  manpower pool with unlimited hours … but if you are burning out staff members, creating a negative environment, or calling attention to failure, is it going to help anyone in the long run?

What our company does is ask the collectors to work 8:30 to 5:00 Monday to Friday, one day till 7:00 pm, one day till 3:00 pm, with an hour lunch.  That’s a 37.5 hour work week.  If we can’t accomplish our goals in 37.5 hours, then there’s a problem with our fundamental processes, not the collector.

Here, if a collection team member voluntarily wants to work more than 37.5 hours, we let them, and they can bank that time as flex hours to take off later – and it eventually caps out.  We have several staff we have to push to take the time they are owed, because we actually care about their work-life balance and not burning them out.  We actually want them to be happy, and have time to recharge.  We don’t want to overwork them … and so far, it works 99% of the time.  Our company absenteeism rates are below 5%, our turnover is lower than others in the industry, and we still meet our client and company revenue expectations.  And more importantly, our team members don't feel abused or taken advantage of.

Want to talk about flex time programs, or collection team morale, or efficiencies?  Happy to share what I know.  Drop me an email and we can chat.

And it’s Friday afternoon – to all the collection team members out there, go take your weekend.

Thanks kindly,

Blair DeMarco-Wettlaufer
KINGSTON Data & Credit
Cambridge, ON