Collectors Generate $494,000 Annually: ACA Survey

Collection agencies spend more than 50 percent of their revenues on their employees and those employees that are collectors bring in $494,000 on average annually, according to the results of a benchmarking survey released this week by ACA International, the association of credit and collection professionals.

The 2008 Agency Benchmarking Survey, based on the validated responses of 214 ACA members, looked at a broad range of revenue, expense, and performance metrics for the period from Oct. 1, 2006 to Sept. 30, 2007. ACA said that these kinds of statistics are important to collection agency leaders.

"Collections may be the single most goal-oriented business in all of commerce," said Nate Thompson of ACA’s public relations department

The respondents to the survey noted that they spend nearly 40 percent of revenues on employee compensation. Another 4 percent is taken up by health coverage and other employee benefits, 5 percent is spent on payroll taxes, and training and other labor costs account for more than 1 percent.

But the employees do their part for the company. For the period examined, respondents reported average collections per collector of $494,000, and a median of $414,000, where half the collectors generate more than $414,000 and half generate less. The median was $402,000 in ACA’s last benchmarking survey, which covered 2005 data. Collections per collector, the ratio of dollars recovered annually to each full-time-equivalent collector, can be a good tool for benchmarking collector productivity, ACA said in the survey report.

For all the attention that employee turnover gets in the industry, the survey paints a fairly benign picture of rapid employee loss. Of the collection agencies responding, only 9 percent reported turnover of 50 percent or more among employees that had been with the firm for at least 90 days. Meanwhile, 44 percent reported turnover of less than 10 percent.

The turnover numbers were also fairly mild for employees in the initial 90-day “probationary” period. Eleven percent said that 50 percent or more of new hire failed to stay past 90 days, while 55 percent of respondents said that less than 10 percent failed to stay onboard past the probationary period.

The survey also delved into operational matters germane to collection effectiveness, such as the best day and time of day to reach debtors and how much collection activity is done on weekends and after 5 pm. On the use of letters, 83 percent reported that letters are typically their agency’s first contact with the debtor, compared to 17 percent that used phone calls as the first contact.

“We’ll continue to develop the ACA Benchmarking report and other studies benefiting a well informed and well managed credit and collection industry," said Thompson.