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Collection Agency Calls at Work


One of my employees is receiving aggressive calls daily at work from a collection agency pertaining to an overdue account. This is causing him added stress which affects not only his performance, but the performance and productivity of the entire team. He has approached me as his division manager for advice. How can I assist him?


There is no more painful a call to receive than that from a collection agent, whose sole purpose is the collection of the debt. They do not care why you have not paid- they must collect the funds due in order to get paid themselves.

Philip H. Gennis,
Vice President,
Recovery &
Grant Thornton
A person’s attitude towards paying the debt has a lot to do with how cooperative the agency will be. Your employee may be a top performer, but finds himself in financial difficulty because of an impending divorce or other factors. The less time spent on why the person has been unable to pay and more on how they will pay going forward, the better.

Some of these collectors are extremely aggressive and rude. Some may even make unwarranted threats or phone the employer to report the issue. Collection agencies in Ontario are governed by the Collection Agencies Act and are subject to legislated standards of behavior.

I recommend that you make your employee aware of this Act and some of its key points. The regulations forbid collection agencies from contacting the person until six days have passed from sending written notice of the following: the name of the creditor, the balance owing, the name of the agency and its authority to demand payment. They cannot continue contact if the proposed recipient did not receive the notice unless a second copy of the written notice is sent and then contact may only be made six days after that. Nor can they continue contact if the debtor has sent a registered letter to the agency disputing the debt and suggesting the matter be taken to court. The collection agent cannot use threatening, profane, intimidating or coercive language, or use undue, excessive or unreasonable pressure. Furthermore, the agency cannot contact the employer except on one occasion to obtain employment information unless the call is further to a court order.

Collection agencies in Ontario are licensed and are subject to a complaint process managed by the Ontario Ministry of Consumer Relations. Similar regulations apply in other provinces across Canada. Collection agents who do not abide by the regulations’ set form can be fired and permanently banned from acting as agents in the future.

As division manager, you would be best to suggest that your employee consider contacting a credit counselling service for help. For example, in Ontario, assistance is offered, in many cases for a nominal fee, by member agencies of the Ontario Association of Credit Counselling Services.

An added recommendation to employers would be to incorporate basic financial counseling offered in-house (as corporations like IBM have successfully implemented) or to add the benefit to existing EAP plans.

The above information has been provided by Philip H. Gennis, LL.B., CIRP,
Vice-President, Specialist Advisory Services, Grant Thornton Limited, Toronto. Philip can be contacted at (416) 366 – 0100

Preparing for Baby Boomer Retirements

“I've been hearing a lot about the Baby Boomer retirements causing labour shortages. I want to make sure my company is ready to deal with this issue. What should I be doing to plan for this demographic workforce shift?”

Officially, the Baby Boom started in 1946 and ended in 1964, but the peak of the Baby Boom was between 1946 and 1954.

Today, the people in that earlier cohort are between 62 and 54 years old and, if they haven’t already taken early retirement, they are thinking about the next stage in their lives.

Paul Dodd
What they do, experts think, will be replicated for the next 10 years as their younger brothers and sisters start to think about retirement too. Complicating the issue is the fact that many Boomers delayed child bearing and had fewer children. As a result, the Baby Bust is about 10% smaller than their parents’ generation.

As the Boomers retire, there is definitely going to be more competition to recruit and retain the best candidates. Your best resources in getting ready for this period of change are your Baby Boomer employees and your own communication skills. Here are three “must-dos” to prepare your company for Baby Boomer retirements:

1. Get Your Financial Ducks in a Row
Make a careful review of your contractual commitments regarding pensions and the access of your retired workers and their spouses to dental plans, drug plans, and life insurance. Who bears the financial brunt of these commitments: the company fund, the union plan, or the employee’s self-directed funds? New recruits will want to know what—if anything—will be left for their own retirements.

Recent stock market volatility took a chunk out of the value of many people’s portfolios forcing them to re-think their plans for early retirement. The same volatility may have taken a chunk of value out of the community chest too. If there’s going to be a shortfall, everyone had better understand why and a plan should be created to address it.

2. Expect the Unexpected
Baby Boomers, as a generation, are not known for being traditional. Don’t expect them to hit the golf courses, the cottages, and the condos in Florida like their parents did. Retirement to the Boomers probably means world travel, training for a marathon, or going on tour with a Grateful Dead tribute band. In between those activities though, don’t be surprised if there’s also time for a second career, or even the first career on a part-time, project-based, or consultancy basis. Many Boomers will want to work for six months of the year, on a reduced schedule, or on special projects well into their 70s. And chances are you will need access to their expertise and experience. Start creating plans for flexible work arrangements to maintain your professional relationships with older workers.

3. Create a Flexible Succession Plan, Carefully
Chances are good that the replacements for your retiring workers are already in your company’s ranks. Identifying who those people are and grooming them is in everyone’s best interests. The people best qualified to help your identify and train them, and to prepare your customers for the succession, are your older workers.

There are many older workers who may not have thought about their retirement, or they may be reluctant to discuss their plans out of fear for their job security. Others will worry that a discussion will rob them of the opportunity to keep working should a spouse’s ill health, a family emergency, money problems, or life circumstances demand a change of retirement plans.

When you begin talking about retirement plans, be sure to emphasize that no one is in a hurry and no one is being pushed out the door. You just need a ballpark time frame, ideas about preserving customer confidence through transitions, and thoughts on “up and coming” talents in the company.

Now, there is one big human allowance we have to make: Egos, impatience, and feelings of loss or anticipation appropriate to any big life transition will be part of the retirement succession process. That doesn’t mean it should be avoided.

Employees on both sides of the succession fence should have access to support programs to help them work through these kinds of emotional issues. Accepting this, though, doesn’t mean we should expect sadness and impatience to dominate the process! The process should be a positive one. How else will retiring workers be able to protect their legacies of hard work and good relationships? Where else will up and coming workers find the opportunity to learn from an experienced master?

Experiment Now to Create Policies for 2011
The clock is ticking. The first Baby Boomers will reach 65 in 2011. Many of them have already taken, or are thinking about taking, early retirement. Start experimenting with financial statements, flexible working relationships, and succession planning now to have policies in place when the Boomers hit 65 starting in three years.

The creativity and hard work this particular challenge demands will help you start building more creative employee policies in general. Ultimately, that will make you a more attractive company in the candidates’ market, where every company will need that competitive edge in recruitment and employee retention.

Paul Dodd is the President of Head2Head (www.head2head.ca), a company that specializes in delivering innovative recruiting solutions by bringing bottom-line thinking to clients' HR and recruiting functions. Paul can be reached at 416-440-2030.

The Cost of Terminating Employees

Q: What is the cost of terminating employees? In today's economy, most administrators and managers are faced with the task of "trimming" their workforce. It is more than merely crunching numbers. What factors should be kept in mind?

Productivity and engagement play a big role. It is not just numbers. For example, you have a team of four that must be reduced by half; three great "performers", one good one, but he’s an excellent employee, engaged, involved and dedicated.

You, as manager or team leader, should always be “in search of excellence”. Discourage mediocrity as once it appears, it will permeate throughout the entire organization.

Robert D. Katz
Sounding Boad
Associates Inc.
A client of mine hired a temp in accounts payable. When I asked the controller if we should hire the person full time, he replied, “I guess so”. I questioned him to find out that given the stated salary, he did not believe that we would attract better candidates. Wrong attitude- I told him to advertise the position and see what talent is available. The trying part does not cost much, except a bit of time and effort giving you more selection than hiring someone whom you believe is average at best. The campaign resulted in a more suitable candidate hired and still with the same employer four years later.

With your team of three great performers and one engaged, involved and dedicated, find a place for that individual elsewhere within the organization if cuts must be made within one department. Rarely are companies so well staffed and organized that they have the luxury to terminate an individual with those traits and characteristics. Given the choice of an employee with excellent credentials and mundane attitude or effort, or someone with lesser credentials but a great work ethic and thirst to do well, take the latter. There is no substitute for a great work ethic, and desire to learn and succeed!

For example, an organization was looking to hire a casino controller. They ran an ad and after two months, they had not seen a candidate with the desired credentials. One employee had been with the organization for seven years. The casino controller position required ten to fifteen years’ experience. This employee worked diligently in this industry and asked to see the president. He did meet the president and stated that he was aware that they had not found a suitable candidate for controller, asking for a chance at the position. This employee said that if after six months in the role, he was not performing to standard, the organization could terminate or replace him. By hiring him, that employee would still cost less than budgeted. What he lacked in years of experience, he made up for with great attitude and an exceptional work ethic, dedication and eagerness to learn. At times, it not just the tangible traits but the intangible instincts that must be taken into account. The organization agreed to offer him the opportunity twenty-one years ago. They made the right decision. Two decades later, that controller became the general manager of a prominent New York Stock Exchange firm’s divisional operation.

Management tends to think that staff reductions are usually the answer. After all, the great financial gurus tend to give kudos when management reins in spending. Slashing and burning are not always the solution, because if you cut too deep into the core, it is very hard to find the same quality once the organization turns around and begins to grow. There is always a layer that you can’t go below and dissipate because it starts to affect the organization’s ability to prosper. A particular lender had developed the gift and credibility of being able to manage over $500 million of loans. He claimed that he had honed his craft because whether a financial institution was growing, downsizing or remained neutral, it would always need someone who could manage half a billion dollars of outstanding loans.

Know your element. Being part of a turnaround usually requires a different skill and mindset than working for a healthy, growing organization. Each requires different pressures and nuances and the needed skills are not necessarily transferable. Rarely does anything substitute for past exceptional experience and a great attitude. Make sure you take the time to check up and do proper planning. You should have current and thorough performance appraisals on every employee in the organization. Beyond meeting the job objectives, remind your managers and department heads to rate work ethic, engagement, willingness to learn and dedication. A bad hire can take four to six months to unwind and can be extremely costly in both time and money. Look for internal candidates first before advertising externally. By the time you go through the recruitment and selection process and have the new hire resign his previous position, you may need the services of a lawyer to terminate the wrong hire.

Downsizing, terminating employees or “cleaning house” are not easy or pleasant tasks. But when you find the stars and terminate the dogs and question marks, you will wonder how you ever lived without it in the first place.

Robert D. Katz, CTP, CPA, MBA, is Managing Director at Executive Sounding Board Associates Inc. (ESBA), a premiere turnaround, crisis and bankruptcy consulting firm for over 30 years. He can be reached at (215) 568-5788


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