"The FCA has now put staff incentives in its crosshairs"

Since coming under new regulation in April 2014, the consumer credit market in the UK has seen many changes.

The Financial Conduct Authority (FCA) took aim at the most unscrupulous lenders in the market by capping interest rates, reforming affordability assessments, regulating collections practices and only giving authorisation to those businesses that traded responsibly.

The FCA has now put staff incentives in its crosshairs. It recently carried out a review of the ways staff are incentivised in this sector, looking at any potential harm those structures might bring to customers. It has also launched a consultation to address risks that might arise from the way consumer credit firms remunerate. It is no secret that in the past, certain firms will have incentivised staff to sell loans, giving little regard for the long-term impacts on customers’ finances, or their ability to repay.

At Dollar UK, we have long recognised that remuneration and incentives play an important role in motivating staff, but also in setting the culture of the company. Under our current management, it has been our highest priority that the culture at our firm ensures customers are at the heart of how the business is run. A key metric in setting this culture is to reward people for the right behaviour that leads to satisfied customers in the long run.

As such, Dollar UK has put in place a remuneration structure for customer-facing staff that focuses on less tangible behavioural measures, rather than just results. We therefore promote staff behaviours that focus on treating our customers fairly, and have developed a structure that rewards staff for high quality customer contact, as well as more common metrics such as efficiency.

Staff are aware, in all customer contacts and decision making, that they will be assessed on the quality of the experience they give the customer, and the consistency with which they treat all customers. This has proven very successful in ensuring that staff are service-minded and are clearly seen to act in the best interests of the customer.

But we believe it is important to go even further to instil a positive culture at Dollar UK. We genuinely strive to be the most socially responsible lender in the market. Rather than just a PR tagline, this is something we are keen for every staff member to embody. Corporate social responsibility (CSR) has become an important part of the way we incentivise staff, and its impact is significant.

Every staff member is encouraged to get involved with as many charitable activities as possible, and make a positive contribution to the local communities in which we trade and they live. Staff members get paid leave for half a day per year to undertake any volunteering activity of their choice – which amounts to nearly 650 full volunteering days annually. We also encourage fundraising activities, from bake sales to mountain climbs (and even a virtual cycle to Poland on exercise bikes).

Staff are even able to contribute to local charities that we support through payroll giving, making a small donation from their salary each month.

These incentives not only enhance the company’s charitable contribution in the local community, but also create a stronger community within the company. An internal monthly CSR newsletter chronicles the activities staff undertake, and celebrates the successes of individual champions. This not only brings staff from across the country closer together, it also spurs them on to get more involved in the Dollar UK charitable community, and brings elements of levity to the working week.

Remuneration is of course a vital way to incentivise staff, and the FCA should be applauded for recognising the impact this can have on customers. But I think the pinnacle of incentivisation is the ability to create a culture where staff see doing good more broadly as part of their role. It seems that creating a business where people are proud to work is in fact the strongest incentive you can have – and ultimately leads to the efficiencies and returns every business needs.