The pressures of 2022 are already all too apparent with rising inflation, energy prices cap increases and the ripple effect of the war in Ukraine making life difficult for many households in the UK. Many individuals are experiencing the collections process for the first time as they struggle to meet their obligations and begin to prioritise their debts.
It’s logical to plan for an extended period of uncertainty and the resulting impact on levels of household debt and on the ability to repay. Debt collection managers are thinking ahead about how their existing set-up will cope with the anticipated increase in demand.
There are three basic choices:
- Recruit. Grow your collections personnel now before you become overextended and customer support levels suffer. This is an expensive option and one that takes time and resources. In the worst-case scenario, it may be that the time for this option is already past. Quality collections advisors are in desperately short supply and will only get harder to acquire as demand grows. With employment levels relatively high, numbers of potential trainees have also dwindled. Even if you can recruit successfully, you may be left with additional capacity you no longer require in the long term, having invested in training and resources for the expanded workforce.
- Outsource. Outsourcing makes sense if you want to limit the cost of recruiting extra staff. It relieves capacity pressures, however, outsourcing means losing some control over how the customer in arrears is managed. It can also be highly unpopular with customers who find their debt has been handed off to a third party and has the potential to affect customer loyalty and retention. Although convenient, outsourcing will increase the cost to collect which may be a hard sell internally when organisations are feeling the pinch and seeking to control costs. Depending on the severity and length of the economic crisis, it is possible that DCAs may find themselves stretched to capacity, making quality services harder to come by.
- Automate. If you prefer to keep control of operations and manage fluctuating demand in-house, automation is a strong consideration. The latest technology can deliver results in a matter of weeks and the immediate needs of the business can be met quickly. With engagement rates over ten times higher than dialler activity and four to seven times higher than two-way SMS*, diverting a large proportion of collections activity to digital self-service could transform contact centre workload and create an elastic capacity that will be crucial in the coming months and years. In addition, with a software-as-a-service contract, the risks and costs are kept in proportion to delivered functionality and usage.
This option is particularly strong when smart decisioning is deployed to reduce time spent on what are currently manual tasks- for example, administering options post-income and expenditure assessment and where digital journeys can be factored to react instantaneously to incoming information and personalise the next steps accordingly.
Scaling a collections operation quickly during volatile times is never easy but it may not be advisable to delay putting in place a quick and cost-effective way to increase capacity. As businesses and their customers are put under pressure, no one wants to contemplate a proposal that can’t be delivered in time, risks customer service standards or inflates overheads. By beginning with intelligent digital self-service and building out incrementally, the effort can focus on those parts of the process where legacy shortfalls are the most pressing and where time savings will be most effective. The choice is yours.
To find out how Flexys can help you transform your collections operation in a way that meets your current and future requirements,
*Flexys customer results