Survey Results: Formal Credit Department Training Programs Missing at Most Corporations
Training is more critical than ever. Not only are technology and automation changing the way receivables are managed, but the regulatory and legal environments have witnessed significant changes since the turn of the millennium. On top of all this, we are at a point in the business cycle where cash flow and risk management are under an enormous amount of scrutiny. Despite these factors, 77 percent of the respondents to Credit Today's recent Credit and Collection Training Survey indicated their firms did not have a formal training program for credit and collections. In fact, 74 percent reported that they did not even have a training budget. Of those who do offer training, 47 percent offer different training programs for different employee classifications.
of respondents.
|
|
Digging further into the data, we found that a major factor in whether or not a formal credit and collection training program exists is the size of the organization. There was a very significant correlation between whether or not an organization offered a formal training program and the number of employees in the credit department. The correlation was even higher between the size of the training budget and number of credit department employees. Somewhat surprisingly, revenue showed little correlation in relation to the offering of a formal training program, but then again, high sales do not necessarily dictate a commensurately large credit staff. The most popular training tool used by the respondents is local workshops or seminars. This speaks well of the efforts of the NACM affiliates and other independent credit industry organizations. Participation in local training events was, in order of preference, yearly, monthly, semi-annually and quarterly, with the average being bi-monthly and the median semi- annually. Even so, nearly 25 percent indicated they do not take advantage of local training opportunities. Of those that do, CRF, CFDD, and Riemer Reporting Services events were highly recommended in addition to those of the NACM and its local affiliates. Close behind in terms of the number of respondents participating is attendance at national and regional conferences. More than 40 percent said they attend either a national or regional conference annually, while 10 percent attend semi-annually and 16 percent quarterly. Most indicated they attend just one or two conferences per year. However, 31 percent indicated they do not participate in these events.
of respondents.
Webinars and teleconferences were ranked as the third most popular training tool with a 70 percent participation rate. In fact, over 85 percent indicated they participated in more that one on-line event each year, and 60 percent at least quarterly. The average was bi-monthly. Training webinars offered by www.creditntell.com were recommended by several respondents. Brian Good, the credit manager at Puma, wrote that Creditntell has a great credit training class webinar that they used this year, and they earned credits towards NACM certification. Many other vendors also periodically offer webinars on a variety of credit and collection topics, as does the CRF and a number of local NACM affiliates. It is interesting to note that the three most popular training activities involve external events: National and regional conferences, local workshops and seminars, and webinars are accessible training tools for every credit professional. It's worth noting that webinars are certainly one of the most cost effective tools. In contrast, the next three most popular training activities as reported by our survey participants are all internally sponsored. In-house corporate sponsored and facilitated training programs came in just a notch below webinars, followed closely by training programs led by the credit manager. Clearly less popular was the hiring of a consultant to come in and provide training. It is somewhat surprising that credit manager-led training was not more popular. It has the advantage of being economical, but then again also has the disadvantage of requiring a considerable time commitment by the credit manager. In comparison, in-house corporate training is usually associated with larger enterprises that are able to fund a corporate training staff. Both were utilized about five times per year on average, but the median for in-house corporate training was only semi-annually, compared to quarterly for credit manager-led sessions. Consultants were typically only used once or twice yearly. At the bottom of the list in terms of popularity, and a clear step below consultant-led learning, were the three training tools that involved some sort of coursework. Self-study courses proved only marginally more popular than NACM certification programs and college tuition credits. All three of these activities, along with consultant-based training, were reported by a minority The common factor in all three of these activities is a personal time commitment. As such, both certification activities and self-study materials were reported to be typically used just two or three times per year. The frequency with which college tuition credits were utilized is difficult to gauge because courses are offered in a wide variety of formats, and people working on a degree will likely take multiple courses during a year. One-on-one training and mentoring were repeatedly mentioned by those taking our survey as another valuable training tool. We would not be surprised that this is the dominant training format in smaller credit departments. A good example of this approach was provided by Thomas Leavitt, corporate credit manager with Nortrax US, who says, "We used to throw our new people into the job and let them get started. We began spending time with them, teaching them the basics and about the company, environment and working with the internal people that they will have interaction with. It is now three weeks in length - best investment that we made as they now have the tools to be effective much earlier in the process."
You don't need to spend a lot of money on training to make it effective, but you do need to make an investment in time. Periodic department meetings and communications (including something as simple as memos highlighting efficiency tips and process notes) are a good place to start both a formal training program and compiling training- related materials. But like any other investment, maximizing your return over the long run requires sufficient due diligence from the start.
| 
Webinars
