How Collector Experience Drives Recovery Success

The collections industry is facing a perfect storm. Total household debt has reached $18.04 trillion—increasing by $93 billion in Q4 2024 alone—while consumer debt delinquency has surged to a five-year high. Credit card utilization also sits at historic highs with average APRs exceeding 22%, and 5.3 million borrowers are now subject to student loan collections as payment pauses have expired. 

Amid this challenging landscape, collecting debts is far from easy. That’s why some leaders in collections are reimagining how they engage, motivate, and retain their frontline teams. The difference lies in how they treat their most valuable asset: their collectors. 

These were all topics of discussion during a recent webinar hosted by AccountsRecovery.net with industry experts Blair DeMarco-Wettlaufer of Kingston Data and Credit, Josh Seuberling of Lendly, and Michael Ciancio of Centrical.

Why Are Collections Getting Harder?

Today’s collectors face a dramatically different landscape than even five years ago. Consumer financial fragility has reached critical levels, with many households facing monthly budget gaps and relying on credit for basic essentials. This means collectors aren’t just dealing with unwilling debtors: they’re navigating conversations with consumers who are genuinely struggling to pay their bills. 

The first challenge: it’s harder to reach consumers. As Blair DeMarco-Wettlaufer, Managing Director of Kingston Data and Credit, explained: “In the old days, when I started in collections, all the phones were bolted to the wall. You make 100 calls, you could get 20, 25 right-party contacts. Now you get a call on your smartphone, you see a toll-free number. You don’t know, you swipe right.” 

Where collectors once could expect reliable right-party contact rates, they now face increasingly sophisticated call screening, automatic spam detection, and consumers who simply don’t answer unknown numbers. Apple’s upcoming iOS features will only make this more challenging, with automatic call screening built directly into the operating system. 

But there’s a silver lining that savvy operations are capitalizing on. Josh Seuberling, President of Lendly, noted: “What we’ve seen is an increase in conversion because the right-party contact is so elusive that it becomes the motivated consumers that are answering the phones; the ones that want to resolve something or have something to say.”

How Is AI Changing How Collectors Work? 

As in most other industries, AI is reshaping collections workflows, handling routine tasks and lower-complexity accounts with increasing sophistication. While this creates operational efficiencies and cost savings, it also means human collectors are increasingly handling only the most challenging, emotionally complex cases—precisely when consumers are under the most financial stress in years. 

Michael Ciancio, CMO at Centrical, described the impact: “[Collectors] need to be even more empathetic nowadays … When you’re constantly dealing with that high level of empathetic conversations, you get burnt out collectors.” 

This shift makes traditional metrics like average handle time less meaningful. As Ciancio pointed out: “If you’re dealing with longer types of conversations, you’re not reading from a script.” 

The conversations that matter most and drive real recovery results require time, empathy, and sophisticated interpersonal skills. Operations that continue to optimize for speed over quality are missing the bigger picture. 

Rethinking Performance Management and Fostering Collaboration 

The most successful collection operations are abandoning outdated management approaches in favor of systems that engage the whole person. 

DeMarco-Wettlaufer has implemented an agile management structure inspired by software development teams: “I took all my collectors and said, what would you like to be in charge of? So, I have one person in charge of credit bureau disputes. I have one person who’s the point of contact for client X… So, you engage the rest of their brain.” 

This approach extends to compensation structures designed to foster collaboration rather than competition. Rather than individual bonuses, his operation shares branch profits with all team members when targets are met. “The IT people get a bonus. So, they get rewarded for keeping the lights on and the computers running. And the one-star collector you have, rather than creating resentment, they’re cheering that person on because they’re having a fundamental bottom line effect on everybody in that branch.” 

This transparency extends to daily operations. Every day, the team receives company-wide reports showing overhead, revenue, and whether each branch is ahead or behind target. Visibility helps everyone understand how their individual contributions impact collective success, which is crucial when dealing with today’s challenging recovery environment. 

How Much Does Losing a Collector Really Cost Your Agency? 

Because skilled collectors are increasingly valuable, the economics of retention have become stark. 

Seuberling broke down the real impact: “If you’ve got a collector that’s spent off $12,000-15,000 net revenue per month. It takes a good six to nine months for somebody to build a portfolio to get to that kind of fee numbers. So, there is a ton of opportunity lost when you lose that collector if you haven’t led them correctly.” 

Beyond the direct financial impact, turnover creates ripple effects throughout the organization. It pulls experienced staff away from revenue-generating activities for training and onboarding new team members, it disrupts team dynamics and morale, and erodes institutional knowledge precisely when that expertise is most needed to navigate complex consumer situations. 

With higher delinquency volumes and more challenging conversations becoming more common, the loss of a seasoned collector who knows how to handle these situations effectively represents a significant competitive disadvantage. 

How Do You Keep Collectors Happy in a Stressful Job? 

The definition of collector wellbeing has evolved far beyond basic job satisfaction, especially given the increased emotional demands of the role. 

As DeMarco-Wettlaufer explained: “Collector wellbeing is work-life balance. It’s their overall happiness with work. It’s their engagement. If they’ve shut off their brain and they’re just punching a clock and showing up, you don’t have collector wellbeing.” 

Some collection agencies are experimenting with flexible scheduling, allowing collectors to adjust their hours around personal commitments, recognizing that financial stress isn’t limited to the consumers they’re calling. Others are implementing transparent communication systems where team members can share challenges and solutions in real-time, fostering collaborative problem-solving when facing increasingly complex cases. 

The impact extends beyond employee satisfaction to actual business results. DeMarco-Wettlaufer’s operation maintains over 600 Google reviews with a 4.3-star rating, which is remarkable in an industry typically plagued by negative consumer feedback. “We reward them for that. And it has a knock-on effect because debtors get a call from us and go, ‘Oh, this is scary.’ And then they Google us. ‘Oh, they’re not monsters.’ And they’re more willing to pay.” 

This consumer perception becomes increasingly valuable when dealing with the current demographic of financially stressed debtors who are more likely to research and evaluate their options. 

How to Develop Leadership in the New Era 

Modern collection leadership requires a fundamental shift from managing tasks to developing people capable of handling today’s complex consumer interactions. 

The most effective managers are those who can identify individual motivations, provide personalized coaching, and create clear pathways for professional growth. 

Ciancio emphasized the importance of transparent goal-setting in this environment: “You make sure that performance is transparent, so they see the performance that’s there. They know what their goals are, they know what they’re trying to achieve. They have a goalpost in front of them that’s not constantly moving.” 

The Technology-Human Balance 

As AI handles routine interactions, human collectors become more valuable, not less, especially when dealing with emotionally charged situations. The key is leveraging technology to enhance human capabilities rather than replace them. 

As Ciancio noted: “It’s really that combination of AI and humans. It’s the hybrid workforce, it’s the augmented workforce. What you’re doing is supplementing what they’re using… The [required] skill sets are no longer going to be Microsoft Outlook and Microsoft Word. It’s going to be, ‘How are you leveraging AI?” 

Here are a few examples: 

• Predictive analytics can help prioritize accounts based on likelihood to pay and emotional complexity. 

• AI-powered coaching can identify skill gaps and suggest targeted training for handling difficult financial hardship conversations. 

• Engagement platforms can make performance improvement engaging and collaborative, providing positive reinforcement in an inherently challenging role. 

Conclusion: Moving Forward in a Challenging Environment 

The collection operations that will thrive despite rising delinquency rates and operational challenges are those that recognize their people as their greatest differentiator. This means investing in comprehensive training for handling emotionally complex situations, creating clear career advancement paths, implementing fair and transparent performance metrics that reflect today’s realities, and fostering a culture where collectors feel empowered to solve problems rather than simply follow scripts. 

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