How to Hire and Train
a Collections Staff
Aggressive hard-hitting collectors have been favorites for
(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
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
• Friendly–Makes eye contact, personable, pleasant
• Diligent–On time for interview, sends thank-you
• 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
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
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
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
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
Robert Holt is President, Baltimore
Credit & Collection Services. Telephone 410-549-6444.