Capacity planning is commonly used in business computing and information technology. Simply put, it’s a process that helps determine what resources a business will need to satisfy the changing demands for its products. In a collections department, personnel capacity planning helps your organization understand how many employees you need to manage a certain number of accounts, including accounts today and those projected for the future.
In all collections departments, productivity hinges on making the most out of the human capital at your disposal. Therefore, minimizing inconsistencies between capacity and demand, so resources aren’t under-utilized and accounts aren’t unfulfilled, helps collections managers meet their goals.
As with most business processes, there are a number of ways to develop an effective capacity plan. The following information can help you create the most effective personnel capacity plan for your collections department.
Determine Your Service Level Needs
Begin by clearly defining and documenting how the work gets done. Break into categories all roles and job descriptions, from collection manager to skip tracing agent. Try to quantify expectations for how work gets done.
Document the work done by systems as well, including collections software and other technologies in your department. Including this data in your analysis can help you understand whether to implement new technologies to improve productivity.
For example, modern consumers are tapped into social media and many forms of digital communication, such as SMS and email. Evaluating how work gets done can help inform your decision to add new communication channels, such as a self-service collections portal.
Determining your service level needs will enable you to:
- Establish workloads to measure the resources needed.
- Determine units of work to measure quantity of work completed.
- Set acceptable service levels between your personnel and work that needs done.
The internal organization of the collection department directly affects its performance. This process enables you to clearly understand who is doing the work, the type of work performed and the work process, so you can organize them for efficiency by combining functions or creating positions. For example you might find you require one supervisor for 15 collectors, and one dedicated trainer for each group of 75 to 100 collectors.
Analyze Your Existing Capacity
For more detailed, quantitative information on your department’s operations, you can also use regression modeling. This is a statistical process for estimating the relationships among dependent and independent variables, such as number of accounts to be worked, account-to-collector ratios, seasonality, personnel shift records, number of employees and number of accounts.
In other words, it evaluates your system’s capacity to determine how it is fulfilling your department’s goals.
This kind of analysis enables you to understand how the value of any dependent variable will change when an independent variable changes, while the other independent variables stay the same. For example if a client’s service needs escalated, would your department be well positioned with one additional employee, or would you need three additional employees?
You can run many scenarios that might be typical of your industry in various situations to better understand staffing needs through each outcome. To more easily conduct regression modeling, online tools are available to simplify the process.
This kind of statistical modeling can also help you plan for the future. If you know the amount of incoming work expected over the coming quarters, you can factor that data into your regression modeling analysis and run the data through several scenarios. This will to help you staff your collections department for the most satisfying service levels.
Once you’ve completed the above steps, you’ve got a clearer picture of how effective your system is at present and what, if anything, needs changed. This will help you create a personnel capacity plan that enables you to assign the right people to the right tasks and at the right time to meet your department goals.
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