This week has been an interesting one, and it hammers home a couple facts I believe in – a collection department or debt collection agency is only as strong as its staff. In our business, the skill and efficiency of reaching out to people and arranging payment is strongly based in the skills, personality and culture of your team.
Fighting The Rotating Door
Our business can be a hard one – the great thing about collections is that the results of a team member’s work are completely quantifiable. The bad thing about collections, is that the results of a team member’s work are completely quantifiable. In third party collections, working on contingency, there is the opportunity for staff to excel and be profitable, and there is also the opportunity to fall short of target.
If a collector has a portfolio of 300 new accounts per month, with an average balance of $600, and a historical liquidation rate of 20%, and a contingency rate of 25%, both the agency owner, the creditor and the collector should expect $36,000 gross dollars collected for a contingency fee of $9000. That would be a winning scenario for everyone – but that is dependent on about 60 payments in full. There is a huge opportunity for swing factors, and a collector might have a stellar month in April, and a disastrous month in May, all because of a dozen failed payments.
Sadly, in the collection world, many managers and owners only believe a collector is as good as their current month, treating struggling collectors who have done $8000, $12,000, or more in previous months poorly – demeaning them, forcing them to work overtime (without pay), or even terminating their employment. This is crazy. If a staff member has worked for you reliably for over a year, consistently producing good results, and has a single bad month, if they have not deviated from the work plan or failed to put in the effort, their previous efforts should have build up some cache, and their employment shouldn't hang by a thread.
This week, I had no less than three potential employee applicants who shared horror stories of previous employers that caused them to quit or be terminated, and I have seen my share of this as an employee of collection agencies in the past. Why would you undermine the confidence, experience and skill of a staff member that is already a part of your company, and react emotionally to the current month when they have proven themselves to be capable employees?
If They Want the Google Slide, Give Them The Google Slide
One of our team was talking the other day about the Google Slide – he pointed out (quite rightly, I believe) that if you reduce stress in the workplace that your team will work harder and improve cooperation between themselves. I also believe it’s also about giving team members control over their environment.
I worked as a collection manager at a rather typical collection agency, that would buy prizes for staff – electronic devices, gift certificates, and so on. But when I asked one of the staff what they wanted as prizes, one of the collectors said ‘a puppy!’ We all had a good laugh about it, but she was mostly serious – she hit target, so I Googled an ad for a puppy in the area and showed it to her – while she didn’t end up getting the puppy, the fact I cared enough about what she wanted, rather than ramming random prizes down the team’s throat made a difference in her morale and commitment to the team.
So, we were talking about the Google slide, and two or three of the staff asked if we could have one. While our Cambridge branch only has one floor, and that makes for a rather dull slide, I told them if we could grow the branch to a two-floor operation, I would happily install a slide (and this is me putting it in writing, like I promised). If our Ontario team can build the company to the point we could have a slide, why wouldn’t I give it to them? They’ve earned it.
If you are in the service industry, your asset is not an office building, or some fancy equipment – it’s the people that choose to work with you, and that you choose to work with. If you overlook their needs of fail to appreciate them, they won’t be there in a year or two. It’s a relationship, and you need to try to get along – of course, you can’t necessarily get them a personal masseuse or a nap room, but you can realistically share your roadmap of the company and let them help shape the journey.
If you want to have a conversation about rewarding staff or making them feel appreciated, by all means give me a call or send me an email – I’m happy to continue the discussion.
Kingston Data and Credit