In the realm of collections, the ongoing labor shortage is not merely a topic of interest for executive management and leadership teams; it's a substantial challenge that demands attention. Financial processes lie at the heart of collections operations. However, the labor shortage has put a strain on these processes, leading to delays and inefficiencies. With fewer hands-on deck, even a regular tasks like invoice processing, payment reconciliations, and resolving disputes from a consumer can all take longer than usual to complete. This not only affects the speed at which collections are made but also increases the risk of errors, non-compliance and inaccuracies, ultimately impacting the bottom line.
Many agencies still rely on legacy systems and manual processes that are poorly equipped to handle the demands of today's fast-paced environment. These outdated technologies not only hinder productivity but also limit the ability to adapt to changing market dynamics and customer preferences. Without modern tools and systems in place, operations teams struggle to handle volume, leading to missed opportunities and frustrated consumers. Finding the needed skills to keep up the growing volume is still an ongoing challenge for most of the collection managers.
Legacy applications add another layer of complexity to the equation. These systems lack the flexibility and integration capabilities needed to streamline processes. As a result, operations teams find themselves juggling multiple platforms and manual workarounds to get the job done. For instance, daily tasks like posting payments can easily take about 2 to 3 hours, that’s roughly 60 hours or productive time in a month. This not only increases the risk of errors but also hampers efficiency and productivity. Moreover, maintaining and updating these legacy applications requires specialized skills that are increasingly difficult to find in today's labor market.
So, what can operations professionals do to mitigate the impact of the labor shortage on collections?
First and foremost, investing in modern technology is paramount. Transitioning to digital solutions can significantly improve efficiency and streamline collections processes. These platforms offer features like automation, real-time data analytics, and seamless integration, enabling operations teams to work smarter, not harder.
Additionally, embracing a culture of innovation and continuous improvement is essential. Professionals should actively seek opportunities to streamline processes, eliminate bottlenecks, and leverage technology to enhance productivity using process automation (RPA). RPA bots also referred as ‘Digital Assistant’ can take up many of these manual tasks and fill the gaps created due to labor shortage. This might involve re-engineering existing workflows, implementing new tools and systems, or investing in employee training to ensure teams are equipped with the skills needed to succeed in a digital-first environment.