Debt collection is a challenging job. There are countless regulations to be aware of, cash flow can suffer during holiday months, and excellent employees are hard to come by. We must applaud agents for their remarkable efforts to collect past due receivables. Over time, however, agents do lose their zeal and ambition to rectify delinquent accounts. This is where collection agent incentive programs come in to save the day. These incentive programs motivate debt collection agents to work harder and, in turn, keep your collection agency in the black.
Collection Agents Bring in Revenue
Agents play a pivotal role in the debt collection agency. They manage accounts and ensure payments steadily flow to your business. Remember, not all borrowers are willing to pay off their debt, which is an agent’s biggest obstacle. Secondly, They have to find ways to convince the debtor to pay while complying with debt collection rules and guidelines.
From the above, we see the role agents play in bringing revenue to collection agencies. They work directly with debtors to establish a positive relationship and create a realistic payback plan. Their role in an agency’s success is crucial. It is for these reasons collection agencies need to incentivize agents to stay on their A-game.
Incentive Programs Increase Agent Effectiveness
Contrary to employer perception, salary alone is rarely enough to motivate employees sufficiently. Providing additional incentive programs is very beneficial in the debt collection industry. Agents undergo lots of challenges in their day to day duties. This ranges from meeting ambitious deadlines and interacting with tricky debtors. Also, as mentioned earlier, collector agents lapse into monotony unless given an incentive to keep their performance healthy.
For example, did you know companies using incentive programs have a 79% success rate? Incentive programs boost both loyalty and employee morale. Incentives do a great job of making agents communicate better, use new technology, and ensure compliance. If you use the right incentive program, you can be assured of attracting and retaining top talent. This will reward the collection agency with a steady cash flow and keep you ahead of the competition.
Incentive Programs Help Maintain Agency Compliance
We all know that debt collection is regulated mainly by the Fair Debt Collection Practices Act (FDCPA). The act protects consumers from unfair treatment, harassment, and intimidation by collection agents. When setting up an incentive program, be sure to roll in strict adherence to these regulations to elevate and maintain agency compliance.
To illustrate, having a strong incentive program with a solid foundation in FDCPA practices ensures an agent does not intimate or harass a debtor to receive Payment. Non-compliance results in hefty fines, penalties, and puts your collection agency under immediate scrutiny. This is why you need to set up disciplinary policies and educate agents on best practices. This ensures incentive programs are set up from the get-go to maintain agency compliance.
Examples of Incentive Programs a Debt Collection Agency can Adopt
There are two main ways to incentive your agent – financial and non-financial. Makes sense, right? Below we discuss both so your agency can create the best incentive program from your corporate culture and company goals.
Financial incentives work best in an uncertain economic climate. As an employer, this is something that you can easily observe. When compared to their counterpart, financial incentives appeal more broadly to employees. Examples of financial incentives include raises, bonuses, and commissions.
Most financial incentives equate 5% to 10% of an employee’s monthly salary. Since many agents work alone in the collection industry, you might want to host a small party where the most successful are awarded a bonus or commission. Initiating competition between collectors inspires friendly rivalry and often leads to each individual being at the top of their game more often than not.
Similarly, non-financial incentives also improve productivity and loyalty. When choosing a non-financial incentive program, there are several factors to consider. These incentives should be practical and useful for your team. They need to have meaning and should spark friendly competition among agents. Excellent examples of non-financial incentives include:
- Shopping vouchers
- Title changes
- Training and educational retreats
- Creative rewards such as reserved parking spaces
Executing a Collection Agent Incentive Program
To conclude, we’ve reviewed the benefits of the collection agent incentive program, now go forth and create the perfect plan for your agency! The sooner you implement a dialed-in incentive program, the easier it will be to achieve agency success overall. Although incentivizing agents creates some upfront and recurring costs, the rewards are worth every dollar.
If your agency needs a custom payment solution, why not give Payment Savvy a call? Our customer base is collection agencies just like yours. Since 2010 we have worked side by side with some of the nation’s leading agencies to dial-in what solutions what best for the ARM industry. From our often imitated Fee-Free Payments™ program to our compliant Pay by Text solution – let us create the payment channels your agency needs to succeed.