For IR managers, having to “do more with less” can be an opportunity.
 
by Ron Brooks


 
Investment recovery (IR) departments are historically understaffed, and today’s economic downturn has exacerbated the issue. The corporate mantra of “do more with less” has made it difficult for many programs to provide the level of service to which their customers and clients are accustomed.
 
This scenario does, however, provide an opportunity in many cases. The IR manager can add to his or her resource base through the contracting of a professional consultant to make up for a lack of in-house staff. Following are some keys to making the relationship between IR manager and outside professional contractors work smoothly.
 

Defining the Role
As an IR manager, you need to make a decision on what roles contractors will play in your program. Will they be employed for an ongoing role or for a single project? What duties and responsibilities
will they have; asset inventory, appraisals, contractor selection and management, marketing, sales, collection of sales proceeds, records retention or any of the other duties that are inherent in the day-to-day activities of an IR professional? It is essential that both the manager and contractor understand what is expected and what limits there will be on the scope of work. These should be

detailed in the professional services agreement.
 
However, the agreement should also allow some flexibility to remove the need to micromanage the work. After all, the purpose of the hiring is to reduce the workload of the manager. This doesn’t mean that the contractor is alone on an island with no supervision—it is also essential that he/she is managed as a member of the IR team with specific goals and periodic performance reviews.
 

Selection

It’s been said that those that can’t do, consult. When it comes to selecting a professional contractor, be sure that this isn’t true and that he/she has a track record of accomplishments. Contractors are an extension of your program and need to understand your corporate culture, company policies and client needs. They should have experience in your industry and have the necessary contacts to hit the ground running. Another key factor is personality. Think of all the stakeholders in the project and how your contractor will fit. Consultants that will be managing other contractors need to be strong enough to enforce your policies; if working in an operating plant, they need to be able to build the relationships necessary to be effective with the other employees; they must also be able to address the concerns of supervisors and managers in a professional manner. Contractors you hire must be good communicators, and must be willing to give you updates, even if there is “bad news” to report. It is essential that they understand that there can be no surprises to come back and bite you.
 
In some cases, you may need several contractors with differing skill sets on a single project (i.e., project management, environmental, safety, etc.). A good practice is to have a small cadre of contractors that you have trained and used in the past. In some cases, former company employees will have a strong background that can be advantageous. Keep files and notes on their performance, rates and types of work they have done. Identify those who have demonstrated an ability to take on
added responsibilities.
 
Finally, ensure that the contractor is available for the duration of the project. This may sound basic, but if the project entails a plant closure or major demolition project that could take months to complete, there may be external time constraints, especially if the project requires the contractor to be away from home for an extended period. If so, have a backup in place to take over if necessary.
 
Implementation
For the purpose of this article, I am going to limit this to a single project scenario. For an ongoing project, such as an extensive stores (MRO) reduction or some other semipermanent position, there may be some additional issues that are not discussed. Once you have made your selection and the contractor understands the project scope, you need to negotiate cost. Most contractors have a rate sheet that details charges for various services. Keep in mind that in some cases, there may be additional charges for travel, living expenses or other non-standard charges. When you have agreed on the compensation, ensure that the project budget reflects the cost. In order to ensure that everyone is on the same page, it is important to get the contractor involved as early as possible.
 

Accompany the contractor to the project site and introduce him/her around to the stakeholders. Include the contractor in all meetings, tours and other activities associated with the project. Be sure to introduce him/her as your representative and discuss your expectations and the level of authority that the contractor will enjoy. You will also need to make sure that the contractor will have the resources needed. This will include office space, computer and phone with access to your corporate network, office supplies and clerical support if necessary. Be sure that the accounts payable group has the contractor set up as a vendor and is prepared to pay the invoices. One note: if there is a way to streamline the payment process so that invoices are paid upon receipt, it is always appreciated by the contractor.

 
Reporting is another key function of the contractor. Make sure everyone understands that you expect detailed records of project activities, correspondence, permits and other documents associated with the project. Schedule a periodic report process (weekly is suggested) and develop a template for the report to ensure that all pertinent information is included. You should also provide regular performance feedback to the contractor to keep him/her apprised of any issue that may affect the project. Conduct site visits and communicate often. Finally, remember that the contractor is your representative and needs your backing. If you have chosen well, your consultant will strive to represent you professionally, and in turn, you should feel comfortable providing your support in situations where conflicts may arise. You, or your designee, must be a single point of contact for these issues. Take care of them and they will take care of you.