Inside Credit Management: What’s Causing Turnover and Labor Shortages

Joine Elaine Nowak, Dir. Product Marketing at auditoria.ai, and Allan Francis, Credit Operations Manager at Levelset, to hear about what is causing turnover in credit management departments. In this recording you’ll hear:

• the top reasons for turnover
• what you can do to avoid turnover in your department
• how automation can help with labor shortages
• And more!

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Speaker 1 (00:03):
My name is Alan Francis. I am the manager of Credit Operations at Level Set. I’ve seen some of you before. It’s good to see everybody again. And basically we’re gonna talk a little bit about how, you know, the number of people that have labor shortage issues, which should be just about everybody, or at least we know the companies we work with have those issues. And that’s what we’re gonna get started. Elaine is a great source of knowledge and is has always great to do a, a webinar or a seminar with. So, uh, gonna turn it over to her and then we’ll go back and forth a little bit. Okay?

Speaker 2 (00:31):
Sounds great. Thank you. Okay, so advance the slides you already see here we are. Okay. In person. I like that. Yeah. And so I’m gonna kind of talk about, uh, what causes turnover. Maybe talk a little bit about what does that mean. People have heard the term, the great resignation, what does that exactly mean and what does it mean to you as an organization? And then sort of what can you do to entice people to stay or to entice people to come and work at your organization and all that kind of fun stuff. So go ahead and forward it again. So what’s the main cause of turnover? So we’re gonna want this to be a little interactive. So if you don’t raise your hands, I’m gonna call on you. So, uh, what do people think? Yes, pay. Pay, Okay, so pay you don’t give them enough money, then they’re just gonna walk out the door. What else causes turnover?

Speaker 3 (01:17):
Company,

Speaker 2 (01:18):
Company culture, right? So if you’ve got a manager who you cannot stand, you don’t really leave that for that

Speaker 3 (01:25):
Stress or not being able to be able

Speaker 2 (01:27):
Stress or not be able to handle the job you’re in. We were gonna have a board, remember? Yeah, our flip charts. Flip chart. Laurie, where we gonna have flip charts chart right here. Oh, there was there. And she told me to bring the markers. Guess where they are? In my hotel room? Yeah. Okay. Anyone else? What else causes

Speaker 3 (01:43):
Lack of developmental

Speaker 2 (01:44):
Opportunity? Lack of developmental opportunities to be able to, Is that I don’t have markers. I left them in my hotel room. Yeah, it’s okay. Carl. We’re

Speaker 3 (01:54):
Saying a lot of turnover cause people wanna work from home.

Speaker 2 (01:56):
Okay, so there you go. People wanna work from home, they don’t wanna come back to the office. So flexible flexibility when it comes to where you wanna work and how you wanna work. Okay, so we actually conduct a survey every year. We’ve, this has had our third annual survey, the state of automation in the finance office. And we’re very, very interested as a company in strictly the finance office. That’s, that’s all we work with. That’s all we automate. That’s what we think is the most beleaguered, the, the part of the organization that has the least amount of automation, the least amount of attention. And we asked the people when they surveyed it was more than 700 people responded. Um, mostly finance professionals in the organization. And the things that they said was, most respondents don’t feel that their finance back office is sufficiently automated. So here, here, if you raise your hands, who here also feels like their, their finance office is not sufficiently automated.

(02:45):
So, um, we also said what parts of the finance office? So you’ve got your, your financial planning and analysis, you have your accounting teams, you’ve got your auditing teams. Which teams had the most manual processes? Anyone here wanna guess? Yes, that’s right. Accounts receivable and accounts payable actually for the third year in a row were the most manual parts of the finance office. No surprise if you work in those areas now unless you’ve got some kind of solution in place, then you know that’s the case. Where was the most time spent? It was these repetitive tasks, right? So it was followed by the following up how many times you have to follow up with someone to kinda get an answer for what you’re looking for or the repeated, um, checking on data, right? So you need to get all this information and data to create reports to be able to understand where you are.

(03:30):
And by the time you get that report done, all that information is stale and now you’re a week behind with the data that you had tried to put together. So those are the kinds of challenges that we found and no surprise there for that. And we also said that we asked you, okay, what, what are you planning to do next year and 20%? So one fifth of the people said, Yeah, we’re gonna implement advanced levels of analytics and reporting in the next year. So that’s good news. It’s good news for the finance office. Laura, if you can go ahead, split it up. So what does this phrase, the great resignation mean to you? Again, we’re gonna be a little interactive. Who’s heard of that? Either the great resigning or the great resignation or Yeah, familiar. And what does it mean to you?

Speaker 4 (04:12):
TL just doing the bare minimum to do your job.

Speaker 2 (04:16):
Okay. So doing the bare minimum to do your job right and getting away with that. So again, we put the question out and we said, um, and I have to keep turning around to look, but talent could be problematic for finance, right? We asked to what degree have you experienced challenges in hiring and retaining? Now on this particular survey, there was a big chunk, okay, so this purple area here, I’m partial to purple if you couldn’t tell <laugh>. Um, we’ve been able to fill open positions within three months. That’s what a good chunk of people said or in this light blew up there. We’ve been able to fill open positions in less than a month. So that’s not bad. So more than half said within three months they could fill the positions that they put out there did. Now if I were to ask you here, and if anyone who has been hiring in the last year, how long did it take? Was it three months or less? Raise your hand to fill a position.

Speaker 4 (05:03):
I have an

Speaker 2 (05:04):
Opinion. Okay, <laugh>, we love opinions. Liz, I’m gonna call on you for opinions. We also, I just wanna point out here you see this little green one, it’s about 6%. We’ve been unable to fill our open positions. I feel really bad for that, that set of people. But that’s a good, there’s a percentage there. There’s, you know, finding that talent, finding someone who understands who wants to do credit, right? We, the big joke is always, I didn’t go to college for credit. That wasn’t what I did. Yes.

Speaker 4 (05:28):
So if you’re looking for somebody that you can’t fill a position for, the community helps with that as well. I can give you people or you can gimme jobs.

Speaker 2 (05:38):
Did everyone hear that? So Laurie said, Yep, if you need help fi you know, if you’ve got an open position and you want to use the community here and your peers, then by all means do so and she can help you out with that if you’ve got open positions. So Lori, go ahead and advance again. So we said, you know, what are the challenges you have in filling positions? So Liz, you said you, you’re having trouble filling the position. What is it? Are you interviewing candidates? You’re not getting people? No,

Speaker 3 (06:03):
I mean you can fill a position but filling the position with the

Speaker 2 (06:06):
Right person, the right person, that’s the issue, right? And if you

Speaker 3 (06:10):
Don’t make that offer fast enough, that person’s gone.

Speaker 2 (06:13):
Okay? So if you don’t make the offer fast enough, they get swooped up by somebody else and that offer better look nice too, right? But the problem

Speaker 3 (06:20):
Is it’s the wrong person.

Speaker 2 (06:22):
Yes. You

Speaker 3 (06:23):
Have to make that, you have to make that choice quick.

Speaker 2 (06:26):
Yes. So if it’s the wrong person, opportunity

Speaker 3 (06:28):
To three or four people you had,

Speaker 2 (06:31):
Yeah. So you’ve been put under pressure to really kind of, uh, understand that candidate as quickly as possible. Get them onboarded and trained, right? Then you’re investing in them and god forbid it doesn’t work out and you’ve just filled this position with someone who doesn’t, it’s not right for that position. And then you are left in a bit of a quandary as well. And it could do the cost of onboarding. You’re all are leading into where we’re gonna go with some of this. And that’s sometimes there’s a way to use automation to fill that gap and to be able to do some of those, that type of work that maybe a millennial may not wanna do or somebody new coming in out of college has no interest in. You know, if the work isn’t meaningful and have value, then maybe someone doesn’t wanna do that kind of work.

Speaker 1 (07:16):
Another thing, along with everything that we’re talking about and the bigger better deal and the great resignation and moving towards technology, there needs to be a balance between institutional memory, um, that, uh, I, you know, something that we bring to the table, those of us have been in credit, you know, for 30 years or whatever it’s been. There is something to be said for that. And I, and I think most of us, we’ve had this conversation before, we’ve been worried because of that period of time where the accredit departments were being watered down with lesser and lesser qualified people. We have no legacy, we have nobody to pass this information onto. And that’s very upsetting to a lot of us. So what we’re gonna talk about or what Elaine’s gonna bring on is that take some of the mundane work and then let the institutional memory get our really skilled people back in. And we’re starting to see that. I think at the last few conferences we were at, we’re starting to see a lot more young, uh, up and coming millennials that are getting excited and have passion about what credit is all about.

Speaker 3 (08:13):
Advances like,

Speaker 2 (08:18):
So we asked the question earlier, why are people quitting their jobs? And again, this wasn’t a survey that we did in particular, but this was a survey that was done. I think it was um, Mackenzie and company, right? So number one, I think someone actually said this, lack of career development and advanced opportunities. So if you’re coming in to an organization and you’re doing this kind of grunt kind of clerical work and you don’t see a future above that or beyond that to get to that next level, that person is not gonna wanna stay. You have to have a clear path for them to see. I’ll start here and then I will move here and then I’m gonna move here. And ultimately as a manager or a director, your job is to fire yourself. Basically you’re training the person under you to take over your job so that you can also advance and move on and move up.

(09:02):
That should be your part of your job in doing that. So did you just point, is she taking over for you? <laugh>, I love it. <laugh>. And then someone else said it too. Inadequate compensation. So the thoughts in the room are totally in line with what they’re seeing out there when they do these surveys and getting this information and gathering, asking. And this is not just in finance, this is across the board at organizations. And then third, someone else said this too, Uninspiring uncaring leaders. So if you’ve got management or executive teams or leadership above you and they don’t care what you’re doing and they’re not inspiring or helping you do your work or giving you the tools that you need to do your work, that can also lead to people saying, Mm, I’m not sure I wanna stay in an organization that’s not gonna support me and help me get to my next level.

(09:47):
Help me do my job the best that I can do my job. So let’s go ahead to the next one, Laurie. So this is sort of an interesting, and I have another graph that’s actually really cool because it talks about the perspective of what the employer thinks employees want versus what the employees say the employees want. And sometimes they’ll don’t match up unfortunately, right? But here you can see this is a, I dunno if you can read it very well, it’s kind of pixelated up here. So employees should understand that motivating factors will keep people with their jobs, right? But there’s also demotivators that will push people away. So the meaningfulness of work, you see how far up that there, there is to making sure that things that you are doing matter, that they have an impact at your organization, that it’s a meaningful thing.

(10:33):
You’re adding value with the thing that you’re doing when you come in every day, day after day. So my husband works in corporate finance, okay? He does the planning and analysis and the budgeting. What he always says is the forward looking part of accounting and not the backward looking part. But even so, like he’s the most miserable person when it comes to his work and his job <laugh>. And I always say, Oh well, you know, how do you make that better? But he’s like, No, it’s a cycle. Like as soon as you, you get to the month end close, as soon as I do my set of reporting for the quarter, that’s for the half year, that’s full year. Then we’re back again. And he’s like, they’re constantly under deadlines. So I understand finance not only from the job I do, but from my husband every night at dinner telling me how terrible it is, <laugh> his work. But I’m like, well what, what information can help solve? That kind of thing. I mean, the technology’s starting to get there where it’s gonna start to be able to do some predictive and prescriptive and sort of future forecasting and forward looking things in addition to being able to automate some of those mundane route sort of, you keep hearing the same thing over repetitive work, right? Work.

Speaker 1 (11:39):
And then one thing that you have to look at is when it comes to compensation, um, that sometimes hurts culture because I know there’s a lot of us, when we see what our employees are making in our heads, in the back of our heads, you know, you’ve thought, boy, if I would’ve ever made that much money at that age, I would’ve just been, and and that’s, you know, it’s a thought process on everybody’s mind. We, we have to move past that and be willing to, to move us all forward. Just like Jean said, we, we have to be able to move forward, give people the passion to do what they need to do. Look, I mean, look at the great differences, the meaningfulness of work compared to what I don’t know if, if you think the, the owners or the business owners even put that much thought, well you know, what does my employee care about the meaningfulness of their work? It’s like, no, I pay ’em a wage and I want ’em to get the job done. That, that mindset kills company culture and we have to worry about that and that’s what technology’s gonna help us do.

Speaker 2 (12:41):
So go ahead and advance that Laurie, if you would. So this is again, we’re gonna be a little more interactive and I want you to kind of call it out. What do you think it means to be valued by your organization? So what does it mean to be valued? How is it shown to you? How, how is that demonstrated to you? Anyone?

Speaker 3 (13:00):
Opportunities, promotions for

Speaker 2 (13:03):
Opportunities, promotions, opportunities to advance. Okay, that shows value at your organization. Anyone else?

Speaker 3 (13:10):
Recognition for what you

Speaker 2 (13:12):
Do. Recognition, right? It doesn’t always have to be monetary, sometimes it could just be accolade, right? Or something to say, Hey, good job well done. Credit

Speaker 3 (13:19):
Manager of

Speaker 2 (13:20):
The month. Credit manager of the month. Thank Congratulations Liz. That’s very exciting credit man. Where’s your balloons? You should be ha oh there they are. <laugh>

Speaker 3 (13:29):
Something

Speaker 1 (13:30):
As simple as collaboration that the employees, you know, you want their opinion here. Here’s a set of, I’m sorry you’re fine. Here’s a set of, you know, um, credit reports that we pulled on a customer. What are your thoughts? What do you think we should do? And they teach them and then let them give you feedback. Maybe there’s something that they saw that you didn’t have them look over a bank statement. What do you see odd about this bank statement? It’s a business bank statement, but Netflix and Amazon Prime and everything is coming out of it at the same time. You know, they, they tend to go to the liquor store twice a week and, and that’s on their business bank statement. So include them and, and collaborate with them and you’d be amazed at the amount of knowledge that you’ll get from them.

Speaker 2 (14:11):
Yeah. And that also speaks to this idea of like taking the experience and getting them to develop that, that knowledge and the through experience, through communication, through sharing and getting them to sort of, hey, be a part of this process. So now that it ultimately become, you will be the one who will be working through that process. So that’s, it’s a great way to help with that. Okay, Lori, go ahead and do one more. So this is, now this is an eyesore. I know I’m actually gonna get up off the stool for this one because when we looked at, right, and, and you say here this is the employer view, the employer said, I know what employees want. They want both of them said work-life balance. So this one, the highest thought of all was work-life balance. So that one goes back to, okay, remote work or not, or flexible hours or can I come in late cuz I wanna walk my dog in the morning, drop my kids at daycare, whatever it might be, right?

(14:59):
Give me that flexibility, I’ll get the job done. Just allow me to do the things I need to do on the side. But then it’s interesting because the employers said it’s very transactional what they thought their employees want. Okay, it, they’re looking for a better job. We just talked about that, right? Oh, it was inadequate compensation, transactional nature. That’s what, oh, that’s what I’m gonna do. I’m gonna make sure that I, I, you know, they’re gonna be looking for a better job. I’m gonna have that better job for them, or I’m gonna make sure I’ve gotta pay them a little bit more. Cuz that’s what they’re looking for payment. But then if we go to the employee side, interestingly enough, right? The things that they thought valued by the organization was more important. So that concept of accolades, the concept of being recognized for the work you do, like being compensated, but not necessarily monetarily.

(15:43):
Maybe it’s that raise, maybe it’s that award, maybe it’s in addition to the money. That’s always nice, you know, don’t get me wrong, right? But the potential for advancement, the sense of belonging. That’s what the employees said that they wanted to feel that that was important in their job. This idea also of having caring and trusting teammates, that was what employees said was more important to them at an organization, right? So that goes back to the idea of culture and how important it is to have a good culture, a culture of openness, a culture of learning and a and a culture of a place that, you know, where you give them. I go back to this idea of the tools that you need to get your job done

Speaker 1 (16:20):
Right? And also ownership. You, you know, a lot of times some owners or some bosses feel like if I pay them more, I own them. And, and that, that becomes pervasive and that will, the, the employees will feel that, you know, I’ll, I’ll be honest, there are days when, you know, I’m, I’m under the gun and everything else and I hear some feedback from an employee and I’m like, what are they thinking? I, you know, if I ever voice that opinion, you know, I’d be run out on a rail. But I mean, it, it’s, it’s a part of it. You know, it, you wanna feel engaged, you want to collaborate with your boss and you want to know that you’re cared about and you want to know that your teammates have your back and that, that’s important.

Speaker 2 (17:00):
Yeah, Totally agree. So, okay, so now here we’re gonna once again put everybody on the spot, but we wanna do it, uh, in your department, what’s the definition of success? So if, if you were to write out the word success equals in my department, what would it be?

Speaker 3 (17:16):
Teamwork.

Speaker 2 (17:17):
Teamwork. Mine would be teamwork. So having your team work together that would define success for you in your, in your department,

Speaker 4 (17:24):
Improve. D you think most people would say like, Oh my dso. Yeah,

Speaker 2 (17:27):
DSOs.

Speaker 4 (17:29):
DSOs not gonna be where it needs to be.

Speaker 2 (17:32):
Liz says, DSOs not gonna be. Or it needs to be if my team isn’t working together. That’s

Speaker 4 (17:36):
Right.

Speaker 2 (17:37):
Good answer. It’s a good answer. Anyone else? What’s the definition of success? How would someone in the back there, Yeah, what’s your definition of success in your department? What, how would you define a success? You don’t have a successful department.

Speaker 3 (17:51):
<laugh>. <laugh>. Yes. We have a successful

Speaker 2 (17:54):
Department. And how do you define that?

Speaker 3 (17:57):
Um, I, well, um, <inaudible>

Speaker 2 (18:00):
But numbers. You say empowerment. Empowerment. Give

Speaker 3 (18:04):
Them a lot of, uh, I’d like to give them a lot of,

Speaker 2 (18:08):
So being able to transfer the work that you’re to the power that you have to your team members so they can make decisions, they can successful

Speaker 3 (18:15):
With the decisions.

Speaker 2 (18:17):
Okay. And then they become successful with the decisions that they make. Beautiful. Okay. Yes.

Speaker 3 (18:23):
Communication.

Speaker 2 (18:26):
So success equals the communication. And how smoothly the department, what’s, tell me what it means to be smooth.

Speaker 3 (18:32):
Uh, basically everything together without having to backtrack.

Speaker 2 (18:37):
Okay. So everything coming together, not having to backtrack, redo things. Not having to do them. What? Doing the hard way. Doing the hard way. Yes. Yeah. Getting it done. Doing it well the first time. Yes. Teamwork. I like the idea of teamwork. Makes the, Yeah. Look at, yeah, you’re out there. Not everyone’s sleeping. I love it. Okay, good.

Speaker 3 (19:00):
<laugh>.

Speaker 2 (19:01):
Okay, so next one here. I think we’re, this is where we kind get into a little bit about de-stressing and, and what that means. Again, I’m gonna, I’m gonna jump up so I can look at my slides cuz I like to look at it, but I think if you can take some of that part of the, the work that’s done, the repetitious work. So if you can identify anything that’s a process that’s repeatable. It, it, it happens over and over and over again. That can be automated. If you have a process or you have transactions that have huge volumes, whether it’s invoices or payments or emails. If you’ve got huge volumes, guess what? Automation can do it faster, more efficiently and with less errors than your people. So think about that. Think about in your organization, do you have that kind of big volumes? Can you, could you benefit from putting something in place? And automation doesn’t have to be a huge digital transformation. You hear that word thrown around. It can be as simple as putting in some, just automating one piece of your process and then automating another piece of your process. It doesn’t have to be all at once, It can be if you wanna jump in that way, but I find that a lot of people that are in the finance department are a little bit more risk averse. Go figure.

Speaker 1 (20:12):
So when it comes to automation, what I love most about automation is how many people have that one person in the office that’s better at Excel than everybody else. And it’s almost like they have keys to the kingdom because nobody’s gonna fire that guy because pivot, pivot tables will, will save the world

Speaker 3 (20:33):
<laugh>.

Speaker 1 (20:34):
And I’ve, I’ll, I’ll be honest with you, if you’re that person, I’ve hated you since I, I walked into an office because I don’t care how many Excel for dummies I’ve gotten. I’ve invariably Excel has let me down somewhere along the line, Google Sheets made it worse. And, and, and so this is what automation will do for you. It, you know, Jim, Bob that knows Excel is, is gonna eventually be put out to pass here. Excel is great. I love Excel, I love my spreadsheets, but this is something that’s going to help propel us past those type of interdependencies.

Speaker 2 (21:05):
Okay? So you’ve got truckloads of data that happens that goes through the, the AR and the ap and there’s lots and lots of data, lots and lots of information. It’s way more than a human can process or maybe even a whole team can process, but you put technology in place, they can process in the blink of an eye what we would take us weeks to do. But I think just think about this too in case of automation, because I think even if you did, you could inject a human into something like okay, put together those spreadsheets, but by the time the information gets put into those sheets, okay, that you’re not able to act on that until that’s all put together and then it gets analyzed and then you can actually make a decision. So if you have that process of collecting that data and information sped up so that you can actually make decisions in much closer to real time, then that is gonna be much more impactful.

(21:51):
And if ultimately, I mean teamwork, we said it was super important that that which should be a goal is to have that great teamwork. And if you can help your team by giving them tools and things where they, the parts of the processes, the parts of the work that is just no one wants to do, pass that off to some kind of technology or software and then just be able to do that work that is the most meaningful, that can have the most impact. That can give you the transparency and the understanding of what it was. Now to get back to the talent part, and we’ll wrap it up here with the talent piece. You know, you wanna look, people cannot be replaced completely. There is no way that you can completely automate any process. There’s always gonna have to be that piece of judgment that, that critical thinking that the human needs to do and inject into that process.

(22:38):
It cannot be completely automated. Anyone who tells you that they’re just selling you a pile of and, but if you were to look and you say, Okay, let’s move from transactional management to customer analytics to be able to say, Okay, I don’t wanna do these transactional, you know, staring compare and this kind of information that no, let’s talk about how to improve the process. People are talking about standardizing their processes, making them better. You can’t get to that point until you can be able to automate that parts of your process. And then you continuously kind of inject improvements into that process as well. And then you also wanna be flexible because I think it is important, the role of people, they wanna work from home, they wanna work at go to work, you’ve gotta kind of find that work life balance and in doing that. And so you’ve gotta be able to upscale your people, you’ve gotta be able to find the right talent. But if you have the right things in place to draw them and say, I’ve got what you need, I’m gonna, you’re gonna be doing the best part of this job. Okay, well thank you very much for having us. Thank you, um, Alan, great job as always and thank you everyone.