Many collections and recovery departments and ARM companies are still struggling to find and keep talent at all levels of the organization. Single organizations or teams cannot control or ignore macroeconomic factors such as inflation/wage inflation, the shift to remote work, and the normalization of “job-hopping.” But, there are factors those organizations and teams can control to improve their team’s ability to recruit and retain talent. Here is one: psychological safety.
Numerous studies have repeatedly found that a key attribute of successful teams is psychological safety. This is true both in remote and distributed teams and is well within the sphere of influence of a single manager. Understanding the concept of psychological safety - and putting some of its principles into practice - can go a long way towards improving your employee recruitment and retention.
What Is Psychological Safety?
The term was coined by Harvard researcher Amy Edmondson in 1999 but the theory was born out of psychology and behavioral research as early as the 1960’s, and has seen a resurgence in the past decade. In essence what it means is that a team with a high degree of psychological safety is one in which team members know they contribute long-term value to the team based on inherent personality, acquired knowledge, or work effort characteristics, not merely for their temporal output, which naturally ebbs and flows. The key to this dynamic is that team members know they can make mistakes, point out flaws, and openly collaborate on solutions without diminishing their own credibility or damaging their personal or professional relationships.
My simpler working definition is “We make mistakes, we fix them, we learn from them, but we don’t make the same mistake twice.”
What the Software Development Lifecycle Can Teach You about Culture, Cohesion, and Psychological Safety
What business management practices or models can we use to breed psychological safety? Look no farther than the software development lifecycle (SDLC). Here are three steps you can take - all adapted from core SDLC practices - you can use to create / enhance psychological safety at your company and improve recruitment and retention.
Step 1 - Define Your Requirements
All product managers, product owners, business process owners, and software engineers know that defining requirements for a new software product or project is a critical first step.
While time spent hashing out a common vocabulary sometimes seems to slow the delivery of the product, the time invested up-front to accurately define requirements leads to higher-quality outcomes. The same is true in both recruiting and retention.
Before posting a single job, (yes, even backfill!) take a moment to evaluate the team’s needs/requirements and ensure the job description truly reflects what a new hire will be asked to contribute given the current players on your team. Then, bring that same standard for clarity and transparency to the entire recruiting process.
Be prepared to answer the following questions:
- How long will the process take?
- What types of interviews will be conducted?
- What are the working hours?
- What is the work location expectation (WFH, RTO, hybrid)?
- How is performance evaluated, and how often?
Also, ensure your HR business partners, whether staff or contract, have a clear understanding of each job and how it may be changing. The customer care team role is a great example of a role that is evolving as the asynchronous outbound collections communications are used to drive inbound customer calls. Inbound calls are typically more pleasant, but take longer and require a broader set of problem-solving abilities and tools.
Finally, this same transparency can boost retention. Invest early in training and onboarding to build your new hire’s foundation in the company culture. This is where the acronyms and unique company vernacular are critical. For new and existing team members to feel psychologically secure, they must be able to communicate openly with one another and ask clarifying questions – a shared vocabulary removes an unnecessary barrier to this free communication.
Step 2 - Empower Engineering
Great leaders point their teams at the goal and get out of their way, allowing teams to own their success.
Aligning the incentives of the individual teams with that of the organization ensures every player is working toward a common goal. This leads to higher degrees of employee engagement and retention as team members feel invested in the business outcomes.
Clearly defined requirements, in both software engineering and in management, provide teams the freedom to foster innovation while ensuring solutions are created in direct alignment with business priorities without requiring micromanaging.
Empowering a team to engineer their own solutions relies again on a foundation of psychological safety. Highlight the individual strengths of your colleagues and how they uniquely contribute to the team’s goals. Focusing on the diverse path and set of experiences each player brings to the table shows that your teammates are valued for not only their individual contributions, but also their role in the greater whole and their inherent worth as a person. This increases the likelihood that your teams develop innovative or novel solutions, arrive at consensus, and proactively address issues quickly.
Step 3 - Isolate Risk in Controlled Environments (Branch Your Code!)
Perhaps the most important managerial action you can take to build psychological safety into a team is to allow people to make mistakes without losing their credibility.
Model the behavior for your team. Embrace mistakes and focus on solutions rather than assigning blame. This will allow your team to come together to collaborate and focus on the solutions. To balance the need for client- and customer-facing perfection with the team’s need for psychological safety embrace yet another software development mainstay: environment isolation/code branching. It is common practice in software development to replicate or “branch” all or a portion of code in a safe environment where an engineer can improve or enhance the code without damaging the live product. These changes are often reviewed by an additional engineer before being integrated back into the main application.
Likewise, you can speed the time to deployment while also isolating the risk of mistakes by creating a safe “dev-test-prod” structure in your organization. New hires and new strategies can be honed and trained in a simulated environment to iterate and “fail fast” to ensure the “bugs” are worked out before “deploying” to a production environment. This might mean role-playing for new agents, an internal “champion-challenger” testing incubator, or sophisticated A/B experiment capabilities on your payment portal.
The possibilities are endless and so are the opportunities this creates.
One Parting Thought
The beauty - and the irony - of employee engagement and retention pains are that they span all teams in all organizations. We need not look only in the realm of “accounts receivable management”, “organizational development” or “business management” for practices that make our teams and products more efficient and effective. Sometimes we need to look to unexpected places, like the software development lifecycle, for a bit of inspiration.
- Fostering Psychological Safety in the Workplace (Forbes)
- Is it Safe? (McKinsey Quarterly)
- Four Ways to Win the Shift to Digital Collections That Don't Involve New Tech (iA Strategy & Tech)
- Will Remote Work Help Talent-Starved Collections Companies Find and Keep Talent? (iA Strategy & Tech)
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