Debt Collection: Challenges and Opportunities for Frontline Teams

With the tremendous increase in consumer debt over the past several years, debt collection organizations have faced increased pressure to create strong frontline teams to deliver payments and meet key KPIs set in place by the organization’s customers.  Andrea Meyer sat down with Centrical’s Derek Rousseau, Corey Mustard, and Piers Brown to discuss some of the challenges and opportunities facing today’s debt collection leaders.  

Andrea Meyer: Debt collection is one of this group’s areas of expertise. What makes the debt collector agent experience different from other contact center roles?  

The biggest differentiator is the nature of the activity. As an agent, you’re making outbound calls to people for money that is owed, and that the customer knows they owe. More often than not, agents are calling a financially distressed demographic. The outbound aspect of these calls makes it especially hard – people are not usually calling the agent to offer payment, and generally, the tone tends to be aggressive. This makes for an extremely stressful job and environment which leads to a high attrition rate – making it difficult for leaders to create a unified, cohesive team and company culture.  

AM: What kind of regulations are in place? How often do regulations change, and are there any upcoming changes?  

Regulations are constantly shifting, specifically around compliance. What makes this especially challenging for midsize and smaller BPOs is the lack of financial resources to hire attorneys to research and advise on new regulations and updates around compliance. This can subject the BPO to legal action, ranging from fines to lawsuits. 

AM: What are some of the most pressing challenges facing the debt collections industry today?  

Attrition, agent quality, and emotional intelligence from agents. Because of high attrition rates, organizations will very often have inexperienced agents that don’t have experience with compliance (with can be a highly complex topic) or an understanding of the critical importance of empathy. Emotional intelligence is really key here – agents spend their days speaking to people in tough financial situations – which is stressful for everyone involved. A good agent will listen to the customer and say, “I understand. I know X has happened and that is rough. But we do need to make an arrangement of some type. Can I put you down for a small payment, even $25?” Empathy will get that payment, help raise the promise-to-pay ratio, and get the agent into the habit of making a transaction.  

AM: Let’s expand a bit on agent quality. What makes for an ideal debt collection agent? 

In addition to empathy and the active listening skills mentioned a moment ago, a successful debt collection agent will have several additional key traits, such as: 

• Experience and knowledge around the debt they are collecting. This will enable the agent to fully understand the laws and regulations that apply to that debt collection and to develop case-specific methods for success.  
• Communications skills are incredibly important.  Agents must be able to effectively communicate with debtors, creditors, and other stakeholders in the process.  Plus, these calls can be emotional and hostile, and agents must handle (and diffuse) difficult situations calmly and professionally.  
• Problem-solving skills are a must. Debt collection agents should be able to identify and solve problems that arise in the process. An ideal agent will take a creative, innovative approach to solve problems.  
• Ethics are critical.  Agents should be trustworthy and always act in their client’s best interests. They will also need to be aware of and follow the FDCPA and other regulations that govern debt collection. 

Getting to this point requires a good deal of engagement and motivation on the agent’s part, which comes down to delivering the right training and actionable feedback. Agencies must also do their best to keep these agents, which is another area where training and coaching help tremendously.  

AM: What are some of the day-to-day challenges for debt collection team managers?  

Team managers have responsibilities coming from all directions, from the larger responsibilities of retaining customers and meeting the agency KPIs. On a more granular level, the daily challenges that impact the overall outcomes include:  

• Account management. Debt collections teams must manage large volumes of accounts – which can be difficult to keep track of. This can be especially challenging if the accounts are spread out across different states or countries. 
• Dealing with difficult customers. Debt collections teams (and their managers) often have to deal with difficult customers who are unwilling to pay their debts. This requires time, patience, and understanding. 
• Keeping up with the latest regulations. Debt collection is a highly regulated industry; those regulations tend to be complex and are continually evolving. Managers must stay up-to-date in order to ensure compliance.  
• Managing employees. Managers are expected to motivate, engage, and inspire their employees, as well as provide them with the feedback and resources they need to be successful. 
• Maintaining a positive work environment. The debt collection work environment is stressful and demanding. Therefore, managers are tasked with creating a positive work environment to boost employee morale and productivity.  
• Remote Work Requirements.  Debt collection team managers will likely manage both onsite and remote agents, thus making onsite incentives hard to manage and losing remote worker engagement and participation.    

Team leaders aren’t just meeting KPIs – they are managing the people who meet them. So managers really need robust, holistic systems that allow them to be proactive, rather than reactive, and truly set their people up for success. For instance, many calls in debt collection centers are escalated, and it is critical that managers know who is delivering the escalated calls and who their top performers are. Managers must be able to train their teams on taking an empathetic, customer-focused approach to empower agents to de-escalate calls without assistance – or losing phone time so they can train. 

This also speaks to the need for agent wellness feedback. If an agent is stressed out or otherwise having a tough day, they won’t be empathetic – which means their calls will not go as well as they could and will be escalated or be otherwise unproductive.  

AM: Let’s go back to what you just said about call escalation for context. For instance, it sounds like the platform would enable a manager to deliver training between calls and not lose phone time.  

Exactly. And once that training module is completed, our platform’s AI engine will deliver new micro training activities, based on the agent’s goals, and any knowledge or performance gaps. When these activities are completed, agents move ahead on the leaderboard, pass levels, earn badges, etc. Offering real-time performance management, and the gamified aspect, enables agents to see how they are doing and gives autonomy over their roles and progress. This all brings a hugely positive and motivating element to the agent’s work. 

AM: How does Centrical help debt collection companies retain staff?  

This environment is stressful and can be de-motivating. Our platform helps keep agents motivated and engaged by applying game mechanics to the workday, leveraging advanced gamification. It is not just points, badges, and leaderboards either, which can sometimes backfire when only your top performers have a chance to win. Centrical motivates bottom and middle-performers as well to drive performance improvement with progressing game narratives, individual performance challenges, and other opportunities to receive rewards and recognition, including completing training, meeting personal goals, etc. This real-time performance management and personalized goals motivates agents at every level and drives desired behaviors (such as completing learning and development, sharing tips and best practices with other agents, and meeting goals) and helps to boost performance. 

Author’s note: First, a tremendous thanks to Derek Brousseau, Corey Mustard, and Piers Brown for their time. To learn more about Centrical for debt collection centers – including how the platform drives employee motivation, engagement, performance, and retention – request your personalized demo today.  

We also invite you to learn more about how our newest release, AI Microlearning (powered by ChatGPT) enables the creation of frontline learning materials in seconds, helping to keep agents updated on compliance updates, guidelines, and more.