Running Thin: The Search for Talented Collection Pros

April 1st, 2007

By John Fiumano
President, Executive Alliance
April 2007 

The receivables management industry has undergone a transformation over the last five years and the result has been a thinning of the available talent and an abundance of job openings. There are several reasons for this; however, for the most part, it can be attributed to the growth of our industry.

The industry has matured and become more sophisticated due to technology and tightening profit margins. Growing debt levels have caused it to become a growth industry, and there has been a lessening of the negative perception of our industry as a profession. As a result, there has been a slow change in the leadership. The old-school collection professional who hasn’t been able to embrace this change has been replaced by new generation of collection executive.

Another factor affecting available talent is the advent of debt purchasing. An alternative to traditional contingency collections, debt buying is another growth industry with a need for individuals with receivable management experience. Although not all debt buyers service their own accounts, the firms that do are pulling talent from the same pool as traditional collection agencies. If they’re not working the accounts in-house, they’re either creating a servicing entity or farming the accounts out to a contingency agency or attorney network – again creating the need for receivable management professionals.

Sales and Marketing

Sales and marketing professionals drive business. Traditional contingency agencies are now competing with debt buyers for individuals who have existing relationships with creditors who might need their services or have might have debt to sell. This has pushed up compensation levels and made the availability of these connected individuals scarce. Receivable management firms have looked at alternative pools of talent for the right salesperson. Some companies are hiring MBAs and training them on the process; others are looking at salespeople from outside of the receivables management industry who sell to a particular industry, such as telecommunications, healthcare or credit reporting agencies.

There are risks involved in this type of hiring model. Receivables management is a long sales cycle, so companies have to be patient with a salesperson who is selling into the industry for the first time. There can also be problems with contingency salespeople entering the debt buying space. Although a salesperson might bring deals to the table, there’s no guarantee that the company is going to be the highest bidder for the portfolio. This can cause frustration on the part of the salesperson. We have also seen companies shy away from connected salespeople with multiple job changes. Employers are concerned that if you cannot consistently represent one company for a sustained period of time, creditors will begin to not take your pitch seriously.

One last trend which is worth mentioning and is specific to the debt buying industry: we have seen a lot of experienced and connected salespeople go out on their own and act as debt brokers. If they sell independently, the thinking seems to suggest they can represent numerous companies and not be limited to the services provided solely by their employer.

Operations Management

Because receivables management firms are offering a greater variety of solutions to creditors, whether it is traditional contingency collections, debt purchasing, or master servicing agreements, they are all pulling operations expertise from the same pool of talent. We have seen operations professionals become more analytical while not losing any of the traditional “floor general” capabilities of the past. We have also seen a trend toward client relations, with senior-level operations people needing to have strong presentation and relationship management abilities.

Analytics and Accounting

With profit margins tightening, today’s accounts receivable management firm must make sure they have the analytics in place to ensure operations are efficient. Accounting, too, has to make sure that the paper is profitable. Forecasting results accurately has never been more important than right now.

As any industry undergoes change it inevitably effects human capital. Evidence of this can be seen on the issuer side of credit. A couple of years ago when all of the major banks were merging, there was an influx of available talent, available positions lessened and compensation for specific skill sets were compressed. The receivable management industry is officially on the other side of the pendulum now. If you have a critical need, you’re not alone!

John Fiumano is CEO of Executive Alliance, a strategic partner of Kaulkin Ginsberg, and a leading national recruitment firm that specializes in the debt collection and accounts receivable management industry. 

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