About a month or so
ago, I watched an excitable webcast that talked about all the collection
agencies in Canada closing … so I reached out to some of the provincial
registrars. And it’s true, I confirmed
that over the last two years, Ontario has gone from just under 400 registered
collection agencies to around 170. Over
50% are gone.
What happened to them?
W
ell, I think the
pandemic had a lot to do with it – either it caused stresses on the businesses
that they couldn’t handle, or it accelerated or amplified problems they were
already having. So they either closed
the doors, or amalgamated with another existing collection agency.
I
’m making an educated
guess here, but I am assuming the bulk of these agencies that disappeared were
smaller companies – 10 employees or less.
Companies that size probably relied on simple technologies, or had all their
revenue tied up in a couple clients.
Imagine this – the pandemic
hits, and your client calls you and tells you to stop working their
business. That happened to us – we have
a client that services mainly from restaurants and bars, so it’s understandable
that they would want to hold off on collections, and that caused us some stress
– but imagine if that was our main client, with 50%+ of our revenue coming from
them? All sorts of creditors put the
brakes on, and some still are telling their agencies to hold off.
N
ext, imagine having to
move everyone to home. We were
incredibly lucky that we built our own collection contact management software
and phone servers and maintained them in house – we had complete control over
our tools and knew how to set it up for remote work. Now imagine a business owner who is not
tech-savvy trying to navigate the problem of working from home without knowing
what a VPN connection is, how to set up a soft phone application, or find a way
to communicate effectively daily with staff members sitting in their homes.
Lastly, take into account
how important company culture is – this pandemic hasn’t been a short term
disruption, we’re at 18 months now. That’s
a long time to not see people face to face.
If you didn’t have trust for your team members, or they hadn’t been
encouraged to self-manage, I can only imagine the nightmare of trying to run a
predictive dialer call-center style company with remote staff. Never mind the ongoing need for people to
actually take pride or enjoyment out of their job, or have camaraderie with
their co-workers or seek greener pastures elsewhere.
A
lot of companies hit
a brick wall with one or more of these issues, and are now gone.
W
hat does that mean for
the collection agencies that remain?
Well, I can tell you there is a lot more business out there, creditors
seeking new agencies to partner with, and regulators now open to the concept of
staff working from home, even after this pandemic winds down.
B
ut there are new
challenges – talking to fellow agency owners all across Canada, hiring
candidates is more challenging now with less applicants, and people less
willing to change jobs with an uncertain future. Other agencies appear to be joining the 21st
century with work from home, flexible schedules, and relying on team members to
self manage. These are significant
hurdles to navigate, and it’s going to take a while for agencies to find their
feet, and creditors to understand the ramifications of these changes happening
inside the companies of their agency partners.
W
hat does the future
hold? Change, and a lot of it. With less agencies out there to service
clients, it’s possible that the race to the lowest bidder for contingency rates
might be less prevalent, RFPs may have less bidders, and the fortunate agencies
that remain can be more particular about which creditors to onboard with their
agencies.
W
ith remote work,
experienced collection agents might change to working with another agency that
isn’t geographically near them (or they may move to a more affordable area and keep
their employment with companies in the big city). This also means that there needs to be a lot
of trust for how a collector represents a creditor or agency, and won’t deviate
from proper presentation of a debt.
T
his also means that
outdated technologies, like off the shelf contact management software, PBX phone
systems (don’t laugh, I know an agency that still has one of these), and in
person meetings have to give way to new tools, and agencies need to be willing
to embrace them.
Looking back, I’m
incredibly grateful for some of the decisions we made pre-pandemic on how to
run our business that has helped us weather the rocky ride.
W
ant to talk about
work from home, maintaining culture, or what to do when half your industry
players disappear? Always happy to chat….
T
hanks kindly,
B
lair DeMarco-Wettlaufer
KINGSTON Data & Credit
Cambridge, Ontario
blair@receivableaccounts.com
226-946-1730
Originally posted on Receivable / Accounts
