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.
Conclusion
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.
Thanks kindly,
Blair DeMarco-Wettlaufer
Kingston Data and Credit
Cambridge, Ontario
226-946-1730
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