New Blood-New Ideas: How Investing in the Young CAn Bring Value to Your Company and the Credit Profession

Every industry needs new blood over time to come in and learn, as well as bring in new ideas, so that business can move forward with strength in perpetuity. Credit is certainly not exempt. However, most in credit would consider it a fair statement to say that representation in the credit profession by Generation Y and the younger Millenials remains quite low.

"Long term, I think it could damage our value to our companies if we do not have strong, up-and-coming leaders in credit. Companies may go back to viewing our function as more of an administrative role," said Dawn Dickert, CCE, credit manager with Lhoist North America, Inc. "In addition, not having credit associates that are building experience could damage our industry network that fosters knowledge-sharing."

Similar to other industries, many factors may be working against the willingness or ability to retain younger members of the credit workforce. This could include stereotypes about work ethic or level of interest, refusal to encourage idea sharing or change on the part of some companies or simply not knowing how to engage. Granted, there are some younger, very new credit professionals who live up to the negative stereotypes, but that's the case in any industry or any generation. However, there are so many professionals, and companies for that matter, that benefit from an environment that doesn't pigeonhole them from the start.

"Young professionals are fearless. They'll go out and try anything. I love working with the younger generation for those reasons," said Kyle Grose, CCE, director of credit at Ferguson Enterprises, Inc. "Experience is just one piece of being a great credit manager. The more young people we have in the industry moving up the ladder, the more young people were going to attract. I think it's a good thing when I'm at Credit Congress, for example, and see youth getting into the mix."

Perceptions/Misperceptions

Lazy, entitled, disrespectful to their elders, wanting things handed to them, unwilling to pay dues and the like are among the words and phrases one might hear experienced professionals use to describe workers from the younger generations. While many might have a horror story or two that fits such a bill, it's hardly a universal phenomenon with younger professionals, especially for companies that know how to engage them.

"I hear it when I go to conventions, about the paradigms for the younger generations," said Ty Knox, director of credit and risk at EFCO Corporation. "We're not seeing it here. They want to hit the ground running and to advance, and they're willing to get their hands dirty and really earn it."

Lynn Richardson, CCP, SPR, retired vice president of human resources for SOS Employment Group and upcoming Credit Congress speaker in Orlando, believes there are so many misperceptions about Millenials, especially those who assume they are privileged-the "me generation." He noted that, while this generation has been raised to approach things in a different way, there is something they generally want and often don't receive, as is customary with older professionals: respect. A part of that in Richardson's opinion stems from the rarity of putting one's self in another's shoes.

"One of the things I present is the simple situation of a Millennial asking for a raise or a promotion early on," he said. "You have to ask yourself why they're asking the question. It might not just be them trying to get more bling. What about the $40,000 or $50,000 or more in student loans they have coming out of school? They might have to be very concerned with financial planning right out of the box. Besides, they've been taught from an early age to ask questions like 'What do I have to do to get an A?' or 'What do I have to do complete this course?"

Melissa Mickelsen, CCE, credit manager with Geneva Rock Products, Inc., also touched on the issue of respect. When younger employees don't believe their ideas are ever being heard, because it is assumed by others that they can't bring value, frustration ensues. "These employees often have great ideas that could really benefit a company, but because they're young or just out of school, they are discounted or not even given the opportunity to contribute," Mickelsen said. "Just having the opportunity to share opinions and ideas can really help an employee feel like they're part of the team and help them feel valued."

Steve Savino, manager of credit and collections for the Americas division of staffing firm ASSA Abloy, said an institutional lack of openness to ideas from a less-experienced employee not only stymies the relationship and the employee's prospects of long-term success there or in the industry, but amounts to a missed opportunity for the department and company. "As managers, it is important to have vision for the future of our department," Savino said. "Being open to innovative ideas and process improvements, even when it comes from a less-experienced employee, can take your department to the next level."

Without the opportunity to share ideas or without the employee's belief that they can contribute something for the greater good, the chances of losing them to other companies or professions rises. And, though money matters to everyone, members of this generation are more likely to leave because they're bored or made to feel inessential, said Knox, a somewhat rare example of a credit manager who entered the credit industry in his early 20s.

Finally, one of the most common perceptions is that the younger professionals lack a strong work ethic, Mickelsen said he thinks it's often just a different perception of what a strong work ethic looks like. "Younger employees don't want to be married to the typical 8-5 workday. They'd rather accomplish their work under a more flexible schedule. If anything, flexibility might help foster creativity and new ideas," she said.

Spelling It Out. Keeping Score

Showing a younger employee what's out there for them early on in their time in your credit department, specifically, is often a highly successful means of getting the employee to look at their path as a career and not just a temporary paycheck. After all, what's the argument for keeping things secretive?

"Show them what the job description is for the next job up and the next job," said Richardson. "Don't tell them vague things like 'you have to earn your stripes,' 'you have to keep your nose dean.' That's not going to resonate. Show them what they can achieve and what they actually need to do."

Amanda Doyle, CBF, district credit manager with Hajoca Corp., said that being shown what was possible in credit helped to convince her to move from sales, where there was little room to grow at her company, to credit. She said the advancement potential, the pay structure down the line and things like work-related travel all factored into not only trying credit as a profession, but staying with it. Outlining this and the training opportunities were crucial. "Without that, I would definitely have tried something else," she recalled. "When a company puts attention into a person and pays for training and education, it excites them. It excited me. They showed they had high hopes for me, so I thought I needed to have those high hopes for myself'

She also said that it was important to not only get the specific information, but to also receive an honest, "straight-up" picture that it would take time, years even, to advance to certain levels in the credit department or beyond.

Like Doyle, Grose and Joshua Nolan, CCE, director of credit at Oldcastle Precast, acknowledged that knowing at an early point in their career that advancing to a higher level was possible and how to get there contributed greatly to their successful career paths. "When you make a true investment, people see that. That keeps the younger talent engaged," said Grose.

Another way to connect with the "wired" generation is speaking their language. For many, that language is competition-based. Knox said that's exactly why younger credit professionals who perform more entry-level tasks have their performance (percent current, days sales outstanding, best portfolio) posted so that all can see who is setting the pace. "Competition fuels the video game generation," Knox said. "They've been competing with video games forever. We try to keep competition live in their work world, give them something to shoot for every day. Again, if people don't think they're working toward a greater good, it kills the motivation," he said, adding that such competition not only inspires them to work harder, but it also gets them to know and care about company goals right away. That's at least the case if the manager does a good job aligning the competitive aspects and the metrics well with company goals. After all, it's not just on the young employee to thrive, it takes strong management.

Getting Something Out of Everyone: Well, Almost

Not every credit department has room for advancement for all the young talent that ends up there. Factor in the life expectancy of only two or three years for new credit professionals from the Millenials and that's a recipe for cold feet on the part of a credit professional. After all, why put in the time and effort it takes to make them a stronger credit professional if they're just going to leave anyway? The reason is because, if you're managing the right way, you're going to get plenty of good out of them, perhaps even long after they've left the proverbial nest.

"We bring in a lot of non-credit-background people with project management IT systems expertise. They often happen to be younger," said Savino. "We've been extremely successful in having them reshape processes by looking at systems." Savino recalled a systems employee with less than five years at his company who was able to work with the bank and interface with the company and bank's software. What resulted was a very high hit rate on autocash. That high hit rate continues today and the reason, Savino admits, is because young people helped teach those process improvements. "A lot of my peers have a problem that they spend time training, nurturing and mentoring, but if you're managing correctly in that period, you're getting something back in the meantime," Savino said. "It's not thinking short term; it's thinking long term. People who did various improvements are no longer with me, but I still have these process flows. And these are a major reason I'm able to make my objectives going forward."

Nolan also brought up the issue of technology. In his opinion, having some young, tech-savvy employees is important because of the quick changes that occur in software. A good feel for systems as well as a willingness to embrace fast-moving changes are attributes even a short-term employee can help with in a credit department. "Software changes seemingly monthly," Nolan said. "I think they're just adept at taking that head on and aren't set in a certain way. They might be more able to jump right in and ask great, helpful questions."

Even if there are questions regarding a young credit professional's realistic ability to affect things in the short term, doesn't it fit in with the "Five Cs of Credit" to try to help an employee get to the next level, even if it is eventually at another company? Aren't credit managers supposed to be doing whatever is necessary, ethically, to contribute positively to the credit industry?

All that said, the potential for disconnects still exist. Even people who have extolled the virtues of younger employees, like Savino, admit there are cases where he or she was "terrible" and "just fizzed out." Like any generation, the youngest aren't perfect. There are cases where an employee wants too much too soon. There are cases where a tech-sawy young professional talks down to older employees who don't understand new technologies as quickly or belittle them for things as petty as having an out-of-date phone.

As much as it is up to the manager to get older credit professionals with traditional ways to welcome younger people, he or she must make sure that the new employee is taking into consideration what makes older generations tick. "I have seen some huge disconnects with younger employees, especially in communicating," Savino said. "How you communicate is massively important. You can't talk down to people. It creates alienation, roadblocks and negativity in getting the process done. It forces a manager to make a move."

That move might be to find another niche for the younger employee. Still, at some point, employees have to get on board. Savino said that sometimes if it doesn't work out, you just have to move on. No one is saying that youth should be a free pass, but don't mistake that for allowing a "they can't help" or "they won't stay" culture to be an obstacle to success. 1

"Young professionals are fearless. They'll go out and try anything. The more young people we have in the industry moving up the ladder, the more young people we're going to attract. I think it's a good thing when I'm at Credit Congress, for example, and see youth getting into the mix."

"As managers, it is important to have vision for the future of our department," Savino said. "Being open to innovative ideas and process improvements, even when it comes from a less-experienced employee, can take your department to the next level."

By Brian Shappell, CBA, CICP

Brian Shappell, CBA, NACM staff writer, can be reached at [email protected].