Keeping collections agents in the fold has never been easy. Just ask Joe Hughes, a vice president at the $7.6 billion-asset UMB Financial Corp. of Kansas City, Mo.
In 2004, Mr. Hughes, who manages the banking company's collections center, was struggling to reduce attrition among its collections agents, which was averaging 50% a year.
Though some left for reasons such as job incompatibility and burnout, many who had blossomed into good collectors were going to larger competitors such as Citigroup Inc. and Wells Fargo & Co., which offered bigger paychecks, Mr. Hughes said.
UMB - whose credit card portfolio was the 25th largest last Dec. 31, at $146 million, according to SNL Financial - "felt like baseball's Kansas City Royals, always grooming talent that gets lured away by the Yankees or other deep-pocketed clubs," Mr. Hughes said.
Determined not to take it on the chin anymore, in January 2005 the company more than quintupled the $100 to $150 bonuses for hitting individual performance benchmarks and began paying those bonuses monthly rather quarterly or annually.
Since then there has been zero attrition among UMB's 22 agents, Mr. Hughes said. Furthermore, he said, he now finds them willing to help co-workers meet performance goals so they can earn group bonuses.
"Our agents feel more invested in the overall performance of the group, not just their individual performance," Mr. Hughes said.
Others companies are also trying to lower collector attrition rates, which average about 35%, with better incentives, more opportunities for advancement, improved training, or some combination, industry experts say.
The aim is to give agents a sense that they can build a career in collection rather than roam from job to job for several years before getting into some other line of work.
"There is a big difference between having a job and a career," said collections supervisor Gary Jensen at Iowa Student Loan Liquidity Corp. of West Des Moines, a state-created nonprofit that helps arrange and services loans from private lenders.
Five years ago, at the outset of a growth spurt, the company implemented training and incentive programs as a preemptive measure against attrition. "If you want retention, give your employees a career," Mr. Jensen said.
Experts stressed the need to create a sense of empowerment. The traditional high-pressure environment in which managers give the hook to those falling short of performance goals can make collectors feel like cattle, they said; today's collectors want to feel that their contributions are meaningful to the company and that they are respected as individuals.
"The days of browbeating agents for missing a quota are gone," said Robert C. Eskin, a collections manager for Hatmaker & Associates Inc., a collection service in Vero Beach, Fla. "Collectors need to be motivated and made aware of overall group performance levels, not just individual performance, to consistently do a good job."
Mr. Eskin said he talks with Hatmaker's agents individually each year about what they bring to the job. "I'll replay calls they have made and focus on their strengths," he said. "I'll also address weaknesses, but I want employees to know what they are dong right, so they can build on it and be motivated to eliminate their weaknesses."
In the past five years no Hatmaker agent has left because of working conditions, though several left the region in 2004 after four hurricanes ravaged Florida, Mr. Eskin said.
Collections executives also said training that explains the corporate philosophy and work rules can help motivate employees.
"When the reasons why rules regarding security and such are explained, employees will work harder to abide by them, because they understand why the company has put these rules in place," said Ralph Liberio, the vice president of operations for NCB Management Services Inc., a collection agency in Trevose, Pa.
Each new NCB employee, even one on a fast track to management, spends a year or two as a collector. The idea is to make sure they always remember the importance of the job.
In Missouri, UMB has created an employee action committee where collectors can suggest ways to improve productivity and the workplace, express concerns, or simply gripe without fear of reprisal.
"It has helped associates feel as though they have more input into what is going on," Mr. Hughes said.
Mr. Lucas is a freelance writer in Chicago. This article appeared in the June issue of Credit & Collections Risk, a sister publication of American Banker.
