It pays to know what your up against........

Posted by Jim (68.113.224.117) on July 28, 2002 at 23:14:00:

Clearly, collections companies and departments are always looking for agents, good times or bad, due to the nature of the business. There are two distinct classes in collection agents—those that work long-term debt and those that work short term. Though agencies set their own time frames, long-term agents typically seek to collect debt that hasn’t been paid in over 180 days. These agents are more experienced and better compensated than those collecting short-term debts because the older the debt, the tougher it is to collect. The debtor may be harder to find or on the edge of bankruptcy. The median pay for these agents is around $50,000 a year, according to several executives. Attrition is less a problem because long-term collections are more likely to be a career position.

Agents collecting short-term debt are generally younger. Like other teleservices jobs, short-term collections may be a temporary position while the agent is searching for other career opportunities. The attrition rate is higher and the pay is less. But collecting short-term debt can be easier because it often entails reminding the debtors they’ve forgotten to send in a bill. This agent typically makes more calls but spends less time trying to negotiate with the debtor.

More than ever, agencies are pressured to find these talented short-term debt collectors because they can make an immediate contribution to the bottom line. An argument could be made that with all the recent layoffs, it must be easier nowadays to find sharp folks that can convince debtors to open their wallets. Right? Well, not necessarily.

“It’s not hard to get people,” says Steve Gayheart, vice president at KCA Financial Services Inc., a full-service third-party agency with 110 agents in Geneva, Ill., near Chicago. “It’s hard to get talented, good people. I can get hundreds of average Joes.” KCA collects card debt for medium-size issuers and has three offices in the Midwest.

Fact is, most people don’t have the necessary skills and personality traits needed to be a productive agent, executives say. “They have to be a creative problem solver with great listening skills,” says DiMarco.

Just being smart or having the skill to design a Web site doesn’t mean much, says DiMarco. What counts is the ability to listen, to negotiate, to convince, and to have the thick skin required to take the occasional insult or slammed phone. Dialing for dollars can be tough work.

“Doors are shut in your face, but you have to get up every morning with the same energy level,” says DiMarco.

For large card issuers, the ability to attract agents to their in-house collections groups can be likened to the saying about buying a house—location, location, location. It’s tougher in states with tighter job markets. And teleservices firms bunched in one area fight for good workers.

“Hiring prospects are market specific,” says David Reak, executive vice president risk management/recovery at Metris Companies Inc. based in Minnetonka, Minn. Metris has about five million cards outstanding and receivables of $10.1 billion. The issuer operates collections call centers in the Phoenix, Jacksonville, Fla., Tulsa, Okla., and Minneapolis metropolitan areas. A glut of teleservices firms around Phoenix has led the company to downsize there while hiring in Tulsa, Reak says.

Overall, the number of collections job applicants walking through Metris’ door has lagged the downturn. It may have started about a year ago, but Metris only began seeing more jobseekers around the beginning of this summer, says Reak.

The New Economy
And expansion is going on in Duluth, Minn. Metris is completing a call center there that will target short-term debt. Duluth, in the northern reaches of the state on Lake Superior, is a shipping town whose glory days coincided with the American steel industry. The nearby Mesabi Iron Range once supplied the giant mills in Illinois and Indiana with ore. When the range was mined out, Duluth went into a long decline.

Metris, representing the new, service-oriented economy, hopes to find plenty of willing workers in the city of 86,918. It plans to hire between 250 to 300 agents in the next 18 months. Starting salaries will range from $11 to $13 an hour. Agents can earn performance-based incentives that can reach 3% to 8% of the salary, says Doug Mayblum, senior vice president of collections.

Getting applicants has been going well, but the real test comes with keeping them. Mayblum says Metris has focused on cutting agent turnover and that Metris’ attrition rate is lower than the industry’s average.

“It’s a tough job, and no one grew up thinking, ‘I’m going to do collections,’” says Mayblum. “We have to make it rewarding, fun, challenging, and interesting.”

One way to liven up the office and build returns is through competitions, a long-standing teleservices industry tradition. Agents may vie to garner the highest single payoff on a credit card bill, or the greatest number of debtors that agree to make a payment.

There are also spot incentives where every transaction in an hour earns a payoff. One of the most popular is a car wash by the call center’s manager.

“We balance contests out so it doesn’t turn into a food fight,” says Mayblum. “We may pit one site versus another, that adds to team spirit.”

Along with the fun, using contests and commissions to charge up agents is essential because of the competition between lenders for what little money is in the debtor’s wallet, executives assert.

“(Agents) need to be money driven. You have to work hard for a commission,” says KCA’s Gayheart. “If you’re happy with $10 an hour, you’re probably not going to work out. I want the guy that’s looking for $25 an hour with commission.”

KCA will have a call-center celebration when a collector gets a debtor to agree to pay off a card debt of $1,000 or more, he says.

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