While lessors increasingly need the support of back office
capability as liquidity tightens, sales roles are changing too in
reaction to the darkening economic climate.
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Industry wide staffing levels have risen more sharply in back
office areas than in direct sales support or field sales over the
last three years, statistics compiled for this survey show.
There has been a 60 per cent mean growth in this field, against
24 per cent in sales and 40 per cent in sales support.
In the context of sales led growth period, these figures point
towards new strategies of growth prioritising back office
recruitment.
The upturn in back office capability is linked to the fact
that the leasing industry is in the grip of the developing
liquidity crisis. Whether speculation tends towards uncertainty or
to pessimism,all agree that the industry is entering a more
challenging environment in which to do business. In the words of
Matthew Winfield of MJM recruitment: “Companies are under sustained
pressure to increase business but must be very careful about the
business they are doing – it is more important than ever to get it
right.”
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By GlobalDataGetting it right
From the findings of this survey, it would seem that ‘getting it
right’ involves a higher valuation of business processing staff
superseding recent direct sales led recruitment, in recognition of
the fact that liquidity shortages have decreased the amount of
financial resource that staff can sell.
If directors wish to keep revenue growth at the same rates as in
recent years,it would seem that the endless expansion of direct
sales may be an increasingly risky proposition for many
companies.
This is not to say that this is the case for everyone. At the
same time as managing existing business may be taking the
spotlight, the pursuit of new business is not grinding to a halt.
Barclays Asset & Sales Finance (BA&SF) has beefed up its
sales force by nearly 90 per cent this year in a move to take
market space left by the withdrawal of other banks, and HSBC
Equipment Finance has announced in response to this survey that it
plans to hire additional new business hunters.
These tactics would, however, seem to be reserved for a small
number of the largest European banks,where “the greatest demand is
still for sales staff who are true new name business developers”,
said Sean Toms of Robinson Toms recruitment. Robinson Toms saw
record growth in 2007 by providing for this demand,with business up
40 per cent from the previous year,but even after such strong
growth it has seen a slight fall in business this year.
Despite BA&SF’s unusual expansion, the faltering of new
business focused growth is evident in the industry’s staffing
performance in Q2, as news of GE Capital Solutions shedding large
portions of its Swiss, and potentially its UK staff, joins the grim
parade of imminent and possible closures.
Risk management
If performance growth among successful companies now focuses on
tighter management of existing accounts rather than pursuit of
bigger portfolios, what staff are companies hiring in lieu of
direct salespeople? All seven recruitment companies interviewed for
this survey identified a significant increase in demand for skill
and experience sets related to managing existing book risk. “In
practical terms,” said Peter Haynes, of Jonathan Wren Recruitment,
“this means there is a noticeable back office growth with regards
to asset risk, disposal and residual value processing staff.This is
due both to the changing structure of lease operation, and the
general risk consciousness of financial institutions in the current
climate.”
Directors are tightening underwriting standards and
looking to scrutinize incoming business more closely, and to do so
they need business processing staff who have a long track record of
knowing what to look out for in credit terms. This demand for
credit experience stretches right into the back end of company
structure: many recruiters are seeing an increased demand for
leasing-experienced collections managers as recovery develops into
a major means of recovering profits.
More than ever, this demand for experienced staff demonstrates
that companies want immediate returns on their human investments.
As the pressure for increased profitability remains high, many
employers are less keen to take on raw recruits with the
expectation of training them. Instead it would seem they would
rather deploy funds to increase the salaries of business processing
positions in order to compete for an apparent short supplies of
such veterans.
“There is a huge shortage of experienced asset-based credit
professionals” said Julie Ramsay of THC recruitment, “and this has
pushed rates of pay in these fields upwards.” With no money
sacrificed in luring experienced credit processing staff,it figures
that business processing divisions are outstripping direct sales
teams in growth across the board.
Dogs: Tricks
What may come as a surprise, however, is the way that these
traditional business processing knowledge sets are now being
deployed in new areas of company structure.
Rather than prioritizing target driven attitude regardless of
experience when recruiting sales staff, employers seem now to be
prizing credit knowledge most highly.
Neel Amin of New Leaf Search stressed the current value of sales
staff with account management skills, and almost all recruiters
surveyed expressed a growing demand for credit and asset knowledge
in field staff.
The rationale is easy to grasp – the more evaluation and risk
management that sales staff can do on the spot, the less has to be
communicated back and forth through communication structures. By
assembling experienced sales teams who can support their work with
their own knowledge immediately, the burden on direct sales support
is reduced and more business can move through existing
channels.
In this way the front office/back office supply lines are being
compressed in a way that challenges the traditional classification
of ‘front’ and ‘back’.
For example, Andrew Bullard, sales director of State Securities,
made a point of classifying his entire back office as sales support
in this survey, making the point that every member of the company
had some influence on the efficacy of direct sales staff.
“There is an increased demand for sales staff with more specific
skills in different market sectors, deal sizes and business sizes,”
said Julie Ramsay of THC Recruitment. “Transfer between these bands
is not easy, so people with exact skill matches are highly sought
after. They want people who can give instant results and are more
specialised, working in smaller and more focused teams. Brokers
want staff with experience in exact markets, and are willing to pay
for it.”
This division and specialization of sales forces allows better
use of existing portfolios, as expertise in niche products such as
factoring and invoice discounting can be cross sold more
effectively to existing customers.
As part of the same trend, Matthew Winfield commented that
“sales teams are offering not just deals but a degree of support
afterwards – a more nurturing approach that prioritises
relationship with the customer over the expansion of portfolios,
and sacrifices sales volume in favour of greater profits”.
Also along these lines, Colin Manning of Manning Solutions
pointed out the integration of direct-to-corporate sales divisions
into bank branches, providing a greater personal connection with
clients.
Small packages
Many global finance organisations have centralised their back
office divisions into large headquarters to make processing of
business from branched sales teams more cost effective.The only
risk of this centralisation is a potential impact on quality of
service, but this can be overcome by companies with effective
communication systems. Companies are also moving to software driven
lease evaluation such as HSBC Equipment Finance’s new Sungard
business processing software, meaning there is less need for
physical evaluators such as new business processing managers.
The tendency towards smaller, more specialised sales teams
with experienced line managers has not only freed up more manpower
in back office departments, but reduced the need for senior
operational staff as well. With greater autonomy at the front end
of companies, there is instead a big focus on acquiring mid-level
specialised managers, in both sales and asset management
fields.
With these new demands for experience and specialisation both in
sales and sales support organisation, it is no surprise that
smaller companies which are in a good position to redeploy their
staffing structures effectively.
The second feature of this survey, examining development of
company cultures through recruitment policy, will examine how staff
incentives and retention policies are affecting the fortune of
small and large leasing companies alike.
Fred Crawley
