How to Hire and Train a Collections Staff

Aggressive hard-hitting collectors have been favorites for years, but...
(From the September 2000 article in Credit Today)

You have just been selected to open a new collection department office. What type of individual would make a good collector? Someone aggressive, right? A real go-getting, hard hitter that will collect all of the money–and quickly

I submit that this is precisely not the type of person needed. Someone too tough and aggressive runs the risk of alienating your customers and jeopardizing future sales. The objective in collections is to speed up cash flow and reduce DSO.

A heavy hitter might help contribute to a reduction in sales, thus having a corresponding detrimental effect on cash flow and DSO. Further, customer base alienation leads to an alienated sales department.

With unemployment figures of three to four percent, getting good help can be a difficult task. All too often the available candidates have little experience, few skills, and no desire to work in collections. How do you pick winners from the group?

Instead of Traditional Skills, Look for These Qualities

• Problem solver–Some one who does crossword puzzles or reads mystery novels
• Organized–Neat appearance, keeps appointment book
• Friendly–Makes eye contact, personable, pleasant
• Diligent–On time for interview, sends thank-you note
• Task-oriented–Able to implement specific projects that show results.
• Good phone skills
• Good with numbers
• Have a good business sense and an overall understanding of company objectives
• Be able, in essence, to sell.

You’ve Hired Them. What Now?

Okay, now you have a good group of collectors hired for the new department.
Chances are that you have some that have worked in collections in the past and some who are new to the field. Where do you start?

First, teach the shorthand. Collections departments everywhere use a variation of the same shorthand codes: LM, PTP, CB, PP. Make sure everyone knows them, uses them, and knows what they mean. Use anecdotes to describe uses and situations. Make sure everyone uses the same codes, so that the supervisor can track progress and accounts can be reassigned as needed without a hitch.

Next, explain overall company objectives and policies. Make sure everyone understands that he represents the company, and emphasize the team aspect.

Discuss interaction with the sales force. There must be a good working relationship with sales, and a desire not just to increase collections, but to increase overall revenues as well. Inform sales of problem accounts, and work with them to get them resolved. Have the collector suggest to the customer that your salesperson can contact them to resolve open issues.

Next, run through some what-if scenarios. Discuss problems: promises, broken promises, delays, no-return-calls and avoidance. Also discuss resolutions: payment plans, notes, COD plus payment on old invoices, ability to make future shipments. Answer questions, do some role-playing, encourage dynamic thought. Then, let them make some live calls. Initially, sit with them and listen to their procedures and the tone of the calls. Make more suggestions. Ensure good notes are taken and that an on-line tickler file is developed to track promises and follow-ups.

Finally, meet with the group again to compare notes. Did the collectors believe that the calls were successful? What did they learn from the transactions? Allow the group to learn from one another, while moderating and moving the discussion in the right direction.

Some Tips for Success

Consider starting an incentive plan. Of all the collections departments that I have worked in or managed, by far the most successful had the same key element: an incentive plan. Pay a base salary, but add commissions based on exceeding pre-determined goals.

Reductions in DSO and over-90 work well. Set out goals for monthly and quarterly objectives, then raise the bar each quarter to make goals harder to achieve. All goals must be obtainable, but the collector must have to work to reach them.

Also, set team goals and individual goals. Give new collectors smaller accounts to get them started, but ensure there is sufficient incentive to pay larger commissions to those that do more work.

Create a climate for collectors in which they are clamoring for additional accounts. Keep score. Post results. Make it a game. Collections is an integral aspect of credit. Cash flow must be driven to allow all other functions to operate. Let’s face it, collections is not for everyone. Many just don’t want to do this kind of work. But many thrive on being successful at something that most can’t.

Find the right individual and turn them into a Professional Collector.

Robert Holt is President, Baltimore Credit & Collection Services. Telephone 410-549-6444. www.bccs2.com