Staffing Cuts Hit ARM Industry According to Survey

More than 37 percent of respondents to insideARM’s most recent Credit and Debt Collection Industry Quarterly Confidence Survey reported that they laid off workers in the fourth quarter of 2008. Another 27 percent noted that they were planning to cut jobs in the first quarter of this year.

The confidence survey, conducted in January 2009 and focusing on the fourth quarter of 2008, is the latest in a series of quarterly surveys designed to gauge the operational and performance confidence of the accounts receivable management and credit industry. Launched last summer, the survey has shown a steady deterioration throughout the economic downturn.

The most recent survey, completed by 500 industry players, revealed that the industry has started to join the broader economy in reducing staff size to cut costs. When asked “Did you eliminate any positions or lay off workers in your company in the 4th Quarter of 2008?” 37.8 percent of ARM industry respondents answered “Yes.” Another 27.4 percent of respondents indicated that they planned on reducing staff in the first quarter of this year.

In a free open response section attached to the question of job cuts, many survey participants noted that their company is taking a careful, surgical approach to cutting staff, rather than eliminating jobs with a hatchet:

“Optimize staffing by eliminating poor performers.”
“Fewer collectors make their goal and have to be let go.”
“We have allowed attrition to lower of staffing by about 20% over the past 6 months.”
“Employ what you need to continue maximizing recovery levels, diversify sales into new industries.”

The survey for the fourth quarter was the first to ask direct questions about job cuts. But a running question throughout the previous quarters’ surveys revealed that collection agencies, debt buyers and collection law firms are anticipating less crowded offices looking forward.

When asked directly “Do you expect the size of your staff to be smaller, greater or about the same six months from now?” only 35.6 percent ARM respondents said “Larger”, a sharp decrease from the 46.8 percent that answered the same way in the third quarter’s survey. Further, 16.6 percent of ARM firms expect their staffs to be smaller in six months, as opposed to 11.4 percent that held the same sentiment a quarter ago.

For full survey results, please visit http://www.insidearm.com/go/4th-quarter-credit-debt-collection-confidence-survey-free-report.