April 11, 2024

 

Upskilling in an AI-driven job market

Jamilex Gotay, editorial associate

 

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Artificial intelligence (AI) has revolutionized the job market in recent years, spawning roles like data analysts, machine learning engineers and AI ethicists. To thrive in their positions, employees must exhibit a blend of both technical and soft skills.

Why it matters: By upskilling and reskilling, employees can sharpen their skills and stay on top of the latest industry trends and technologies, enhancing productivity and efficiency.

Artificial intelligence is expected to create 97 million new jobs, according to the World Economic Forum. New roles such as AI prompt engineers, machine learning engineers and automation experts may emerge. “AI will inevitably expand the job market, focusing on technical skills and workers familiar with AI,” reads an Insight Global report.

The advent of AI in the workplace has resulted in a division of labor where AI handles routine, analytical tasks while humans focus on areas requiring creativity, judgment and emotional intelligence, according to a US Data Corporation. “This new dynamic elevates the value of soft skills as critical differentiators in the workforce,” the article reads.

By the numbers: According to an Intelligent.com report:

  • Four in five employers value experience over education when evaluating job candidates.
  • 45% of companies plan to eliminate bachelor’s degree requirements for some positions in 2024.
  • 55% of companies eliminated bachelor’s degree requirements in 2023.
  • 70% say they eliminated bachelor’s degree requirements to create a more diverse workforce.

Remaining relevant and competitive requires continuous learning and skill development through upskilling and reskilling.

Upskilling is a workplace trend that offers training and development to enhance employees’ skills and reduce skill gaps. It aims to boost existing employees' abilities, enabling them to progress in their roles and explore new opportunities within the company.

Reskilling involves training employees in an entirely new set of skills to prepare them to take on a different role within the company. This typically occurs when workers’ previous tasks or responsibilities become irrelevant, often due to advances in technology.

What they’re saying: “I’ve started putting a little more weight on flexibility, willingness to learn and drive,” said Martine Dyer, CCE, CCRA, credit and collections manager at Restaurant Equipment Service Group, LLC (Addison, IL). “A person's willingness to complete tasks and solve problems is more valuable than technical skills or experience, as these traits facilitate faster learning. Despite training, acquiring soft skills can often be more challenging.”

Dyer’s HR department offers training programs for both technical and soft skills to their employees. The program includes five-10-minute educational videos followed by a quiz.

“There, you can learn about communication and interpersonal skills such as how to effectively provide feedback during performance evaluations,” Dyer said. “I think if there is a desire from the employee to learn and grow, the company should support it. Whether that’s earning a degree or a designation from NACM’s Professional Certification Program.”

Eve Sahnow, CCE, director of credit at OrePac Building Products (Wilsonville, OR), continuously evaluates the need for upskilling and reskilling to address any emerging skill gaps. “For upskilling, we offer regular training programs and workshops to enhance their current skills and keep them updated with the latest industry trends,” she said. “We identify and train employees interested in transitioning to different roles within the company.”

When credit professionals know how to use more automated tools, work will be more efficient. Merry Duan, senior strategic account analyst at Bayer Corporation (Saint Louis, MO), ensures that her employees are upskilling or reskilling to improve work efficiencies and knowledge as they work in a highly competitive environment.

“For example, I interpreted that artificial intelligence (AI), machine learning (ML) and ChatGPT can help my daily work,” Duan said. “So, I went to several webinars and discussion forums hosted by LinkedIn and other educational organizations for AI and machine learning training. Recently, I got certified for AI machine learning, which supports financial planning and analysis.”

Training and development have a direct impact on employee engagement and retention and should be an integral part of your talent management strategy. It makes employees feel supported, valued and capable, resulting in improved performance.

“Investing in employee development fosters a culture of continuous learning and growth within the company, leading to higher employee satisfaction and retention rates,” said Joshua Nolan, CCE, senior director of financial operations at PrePass (Phoenix, AZ). “From a company perspective, having a skilled and adaptable workforce improves overall performance, innovation and competitiveness in the market.”

In his upskilling approach, Nolan ensures he regularly conducts training programs to enhance his employees' proficiency in new technologies or industry trends. “If an employee expresses an interest in transitioning to a different role within the company, we provide them with the necessary training and resources to acquire the required skills, an example of reskilling.”

Chris Kyriakopoulos, CICP, national credit risk manager at Robert Half International (Phoenix, AZ), says that he incorporates discussions about upskilling into quarterly, midyear and annual performance reviews to ensure that it remains a priority for everyone involved. “By regularly assessing skills gaps and setting goals for improvement, both employees and managers can work together to create personalized development plans that align with both individual aspirations and organizational objectives.”

Reskilling can be used when transitioning employees to a different position within the company. For some credit managers, this training involves higher education and hands-on experience in similar roles.

Melvin Ucelo, CCE, CICP, corporate credit manager at Parker Hannifin (Cleveland, OH), is training an employee who is moving from deductions to credit. “Previously an AR analyst, she showed advanced problem-solving skills,” he said. “We're supporting her pursuit of an accounting degree as it will unlock numerous opportunities, presumably leading her towards credit.”

As technology continues to shape the job market, companies must prioritize continuous learning and development to equip their employees with the necessary skills for success in evolving roles and industries.

“A team member of over two years recently expressed an interest in data analytics and Power BI,” said Val Hardesty, CCE, CICP, director of credit at Vallen (Belmont, NC). “So, she’s been meeting with the Power BI reporting team to learn more about those interests. By allowing this, we’re not only retaining employees, but we’re placing top talent elsewhere in the company, which will most likely happen with this employee.”

Brendon Misik, CCE, CICP, senior manager for agriculture credit at PCS Admin USA Inc. (Nutrien) (Deerfield, IL), is in a similar situation with another employee who is interested in IT and Power BI. “He’s our most valuable asset to the credit department,” he said. “He puts together these amazing Power BI reports to help everybody from Treasury to the CFO. Now he’s working on automating our reviews for our accounts so that we may focus our energy on more urgent matters.”

Whether you’re reskilling or upskilling, your employees’ professional development is key to improving their productivity and well-being. “I think it's important for all employees to upskill because it continues to fuel your passion and purpose at the workplace,” Dyer said. “Regardless of your experience level, the additional tools or skills learned will make goals more attainable and ultimately, make the company better.”

The bottom line: In the evolving AI-driven job market, continuous upskilling and reskilling are crucial for employees to remain relevant and competitive, with an increasing emphasis on both technical and soft skills.

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How to craft a job description for credit managers

Kendall Payton, editorial associate

Job descriptions are brief written explanations that outline the responsibilities and requirements of a role. Crafting the right job description will help attract the most qualified candidate—and with millions of job listings on different websites, a well-crafted job description will help you stand out.

Generally, when candidates seek employment opportunities, there are four main priorities:

  • Work-life balance
  • Flexibility
  • Income and benefits
  • Company culture

Why it matters: It is important to include a glimpse of each priority within your company’s job posting. Job descriptions can make or break a job seeker’s interest. Vague and basic sentences can be misleading, or even inaccurate in what the potential candidate will be doing. In fact, 52% of job seekers say the quality of a job description is very or extremely influential on their decision to apply for a job, according to an Indeed survey.

This rings especially true in the credit profession because the role of credit is never black and white. For example, a credit manager role may slightly differ from a credit and collections role, or a credit analyst role is different from a credit risk manager. So, creating an accurate job description can be tricky. Here are a few tips for those in the credit profession no matter the industry or role:

Put the responsibilities of the job first. Whether in bullet point form fashion or a simple paragraph, the core duties of the job should be listed along with a strong opening summary. “A well-thought-out scope of work and an objective are a crucial part of the description,” said Cynthia Wieme, CCE, ICCE, MICM, retired credit expert (Centennial, CO). “I like to start out with the objective or what we’re trying to accomplish with this role and then we need X number of skillsets.”

Create an accurate title based on requirements. An accurate position is important for attracting the right candidates. Every company titles their jobs differently. For example, a job title that says credit manager can be confusing because it could mean you are running a team, or it could mean you are running accounts.

“Every job description should always include bullet points so that at a very high level, you can pinpoint and show exactly what the individual will be responsible for,” said Roxanne Price, CCE, CCRA, NACM chair elect and corporate credit manager at H&E Equipment Services, Inc. (Baton Rouge, LA). “I know you can’t capture everything, but at a high level you have to list that so at least they know if they apply for it, it’s something that they’re used to and that they can adapt in the event that they are considered for the position.”

Include incentive opportunities. Motivation is a huge factor in whether a candidate will ever be interested in applying. Most employees today have a what’s in it for me perspective—so, including opportunities for growth is paramount. The support of credentialing is a major incentive for job applicants as well. “One thing I’ve included in job descriptions is the opportunity for education,” Wieme said. “I’ll plug in NACM for the candidate to potentially earn a designation such as a CBA or CBF. I’ve been very fortunate for all my employers in the last 30 years of being NACM and FCIB members, so I’ve been able to include that in my job descriptions. You attract talent if it’s something else besides the basics.”

Be specific. It is best to avoid the vague “other duties as assigned” jargon in descriptions. Some employers have taken advantage of their employees and used the other duties as assigned to get them to do something out of their normal scope of responsibilities. However, some employers use other duties as assigned to open the floor for the employee to branch out. Try to shift the wording to something along the lines of “working on team projects in a collaborative environment” to be more specific to the other duties in question.

Marlene Groh, CCE, ICCE, regional credit manager at Carrier Enterprise LLC (Charlotte, NC), said she includes the wording work on team projects as needed. “You don’t want someone to say that you didn’t mention a task that they are now doing,” Groh explained. “For the most part, if you’re a collector, you’re doing collections. But if you get a tax project where everyone must get tax certificates and you need the whole team to pitch in, everyone is part of it even though it may not be part of the job description.”

Include a compensation range. In 2023, one fifth of all U.S. workers became covered under pay transparency laws. The regulations were made to require all employers to be transparent with salary ranges and benefits to help promote equity and fairness in the workplace. Each transparency law differs from state to state. Depending on the jurisdiction, the law may require employers to:

  • Disclose salary ranges to candidates at a specific point in the process.
  • Disclose the salary range when requested by the employee.
  • Disclose salary ranges in the job post itself.

Pay transparency can be beneficial for improving employee performance, motivation and job satisfaction. Most candidates seek a salary range in the job description itself to see if the amount of work matches the pay. However, there are other reasons why an employer may not want to disclose salary in the job description itself.

“I typically like to stay away from listing the compensation because you don’t want to overcommit to something too soon,” said Price. “It also depends on the candidate’s skillsets, what they can bring to the table to improve the department and if we have the return on investment. You can have a quick return on investment with one certain hire, but with other hires it can take a bit longer, so I like to shy away from listing the actual pay.”

Here’s an excerpt of a credit analyst administrative role description:

Job Responsibilities

  • Set up COD and term accounts approved by Credit team.
  • Maintain and scan credit files.
  • Perform customer account maintenance.
  • Prepare weekly and monthly credit reports – aging reports, statements, invoice copies.
  • Prepare customer refunds.
  • Maintain tax certificates.
  • Prepare and track lien notices and filings.
  • Prepare and send collection letters.
  • Assist with travel planning and department meetings.
  • Handle ordering office supplies.
  • Work on team projects as needed.

Requirements

  • Excellent customer service skills.
  • Ability to organize and prioritize work.
  • Attention to detail with strong data entry skills.
  • Ability to work independently or as part of a team.
  • Professional in appearance and attitude.
  • Ability to effectively communicate both verbally and in writing.
  • Ability to efficiently operate computers.
  • Knowledge of Microsoft Office software (Outlook, Word, PowerPoint, etc.).
  • Strong Microsoft Excel skills (vlookup, pivot tables a must).
  • Ability to adjust work schedule in accordance with job objectives.
  • Must have strong and accurate data entry skills.
  • Ability to perform basic math functions.

Qualifications

  • High School diploma or equivalent with a minimum of two years’ experience or Associate’s Degree.
  • Work and/or experience in a distribution environment is a plus.

The bottom line: An effective job description is important for attracting the right candidates, and it should include clear responsibilities.

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Improve collections forecasting for cash flow stability

Jamilex Gotay, editorial associate

More credit managers are improving cash flow forecasting, a technique for estimating a business's future cash movements. However, this wouldn’t be possible without collections forecasting.

Why it matters: Understanding and improving collections forecasting is key as it enables businesses to maintain financial stability without resorting to external financing options.

Collections forecasting, or accounts receivables (A/R) forecasting, uses payment history to predict future cash flow. Specifically, it uses clients’ past payments to estimate future payment amounts and timings.

The benefits of accurate collections forecasting include:

  • Eliminates reliance on external financing for cash flow.
  • If financing is still needed, you can make informed decisions about the required amount and repayment period.

Whereas cash flow forecasting predicts a business’s future cash inflows and outflows. This accurate prediction helps companies foresee cash positions, avoid serious deficits and effectively use potential surpluses.

What they’re saying: “It is different in that cash flow forecasting considers a company’s total cash inflows and outflows,” said JoAnn Malz, CCE, ICCE, NACM Chair and director of credit, collections and billing at The Imagine Group LLC (Shakopee, MN). “Collections forecasting focuses on the A/R-related inflows that go into total cash flow forecasting.”

Ray Yarborough, CBA, CCRA, CICP, senior accounts receivable manager at Connexity, Inc. (Santa Monica, CA), says collections forecasting is just one component of a company’s cash flow picture. “I’d say collections forecasting is based solely on existing receivables and customer payment history, while cash forecasting is based on collection forecasting and expected future revenues,” he added.

Yes, but: Some collections forecasting models can be very complicated and time consuming. One of the simplest ways to forecast A/R collections is using days sales outstanding (DSO).

Divide DSO by 365 (total days in a year) to get a daily collection rate. Multiply this by your sales forecast to estimate the accounts receivable for that period.

“Understanding your average DSO and sales forecast gives you a great base perspective, but it’s important to remember that reality is unexpected, and you cannot always expect an average outcome,” reads a Gavati article. “There will always be those clients with either overdue or prepaid in invoices. And it’s crucial to keep those possibilities in mind.”

At present, Asha Weekes, ICCE, senior manager, credit at Gildan (Christ Church, Barbados), uses percentage of current A/R and percentage of past-due A/R to forecast collections. “The percentage is based on the customer’s historical data, which is subject to change as their payment habits change,” she said. “However, unless market conditions are highly volatile, these habits may not change significantly enough to impact the percentages used.”

There is a rise in programs or tools available that businesses are using to simplify their collections forecasting process. “Startups and small businesses may approach collections forecasting in a manual way but as the business grows, it may become more labor intensive,” Weekes said. “To improve accuracy and efficiency in business, you must invest in tools that can not only assist in collections forecasting, but also extend their cash flow forecasting as well.”

Some credit professionals use artificial intelligence (AI) to help with both collections forecasting and cash flow forecasting. Yarborough said he hired consultants to build models in Power BI. “On the collection side, the model identifies due dates and average payment dates by customer, and we focus on identifying the reason for the gap between these two figures,” he said.

By analyzing the average days to pay, credit managers can forecast payment dates for cash flow analysis. “Our portfolio includes prepaid, Net 30, Net 60 and Net 90 terms, making this AI model's predictive capabilities invaluable,” Yarborough said. “It uses historical sales data to forecast revenues, which are then combined with the predicted payment dates from the collections forecast. These models are proving highly accurate and continue to improve over time.”

Formulas for collections forecasting will change based on many factors such as industry type, level of deductions, discount terms offered to customers, seasonality, economic or natural disasters and customer predetermined payment schedules, according to Malz. “Forecasts are always estimates and need to be treated as such with the application of human judgment applied for fluctuating circumstances,” she said.

Malz monitors the percentage collected of the amount available to collect each month knowing that a small percentage will be uncollectible (and unidentifiable in our system) due to deductions.

What’s next: “Customers are willing to pay for the most part but are requesting more extended payment terms and embarking on the use of different payment models to pay invoices,” said Weekes. “Once both parties have come to an agreement, collecting follows suit.”

Yarborough says he hasn’t seen much change for U.S. customers in terms of difficulties in collections but has noticed an increase in insolvency filings in Europe. “If you’re in credit management, you really need to consider ways to leverage AI, if you aren’t already,” he said. “While we are still in the early stages of using Power BI for collections forecasting, I’m very encouraged by the results I’m seeing.”

Malz is helping customers work through deductions and missing invoices, reconciling accounts and finding solutions to their problems. By doing so, her company has maintained strong collection results.

“There are customer segments we monitor closely and work to control exposure to our company’s cash flow via thorough risk assessment and use of credit limits and, if necessary, hold management techniques,” Malz said. “We may have to implement strategies such as using credit limit controls or talking with our sales partners about implementing a new strategy.”

The big picture: Cash flow forecasting and collections forecasting are interconnected techniques that help businesses predict their future financial stability, reducing reliance on external financing, with an increasing number of companies turning to AI tools for more efficient and accurate forecasts.

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Ukraine and Israel aid continues to stall in Congress

Ash Arnett, NACM’s Washington Representative, PACE Government Affairs

After a very brief ‘shutdown’ in the wee hours of Saturday, March 23, Congress finally got its work done to fund the government. Neither Democrats nor Republicans were particularly pleased with the outcome; the hallmark of a successful compromise. Unfortunately for Speaker Mike Johnson, who currently has a one-vote majority in the House and a small but vocal faction of his Caucus that has threatened to oust him, this isn’t something he can just brush over.

All of this sets the stage for what is next on Congress’s docket: foreign aid for Ukraine and Israel.

When it was first proposed—more than six months ago—Ukraine was running out of ammunition, Israel had just suffered its worst terrorist attack in decades, and the crisis at our southern border had reached the point where even the Biden Administration admitted they needed additional funding to manage the situation. Israel aid and new border security funding was supposed to be a carrot for House Republicans who have soured on providing any additional aid to Ukraine. This turned out to be a miscalculation from the Biden Administration, as Republicans gave his proposal a firm ‘no thanks.’

In response, Senate Republicans, who are generally more supportive of aid to Ukraine, attempted to negotiate a bipartisan border security bill that could get conservative support for the entire package. What emerged from this was the ill-fated attempt at a bipartisan border security and asylum reform bill led by Senators Lankford, Murphy and Sinema. While an agreement was eventually reached between the Senators and the White House, former President Donald Trump and conservative hardliners killed the package before it was ever allowed a vote.

That process took months, and since then, the political landscape has gotten even more complicated. What was once a slam dunk and a deal sweetener, Israel aid is now fraught on the Democratic side, with progressives looking to make aid to Israel conditional on humanitarian assistance for Palestinians and updated rules of engagement from Israel. And, despite Russia making the first military gains in Ukraine in months, Congressional Republicans continue to largely oppose sending any additional new aid.

In short—a ‘clean’ foreign aid bill might not even have the votes it needs to pass in the House and Senate, assuming that Speaker Johnson is willing to gamble his speakership on allowing such a vote in the first place.

Already, Rep. Marjorie Taylor Greene has filed a motion to vacate, but she has not yet taken the necessary steps to force a vote on the motion. If Speaker Johnson decides to move forward with Ukraine aid, he could be forced to rely on Democrats to give him enough votes to keep his job. Going down that road would likely begin a death spiral for his speakership, however, as Democratic support would only persist for so long, while conservative rancor would get worse and worse.

Looking at my crystal ball, I would still favor some aid package getting passed before the end of the year. Not only are there still a few ‘must-pass’ bills with broad support in Congress, such as the National Defense Authorization Act (NDAA), that could act as a vehicle for aid, but Congressional leadership continues to largely support aid for Ukraine and Israel. With their support, and the still not insignificant power of more ‘establishment-minded’ Members and Senators, getting an aid package across the finish line is still very doable; just not anytime soon.

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