Thursday, February 07, 2008

What I'm Hearing...Direct Deposit

Today, as I was driving on the 105 Freeway in Southern California, the morning radio show hosts discussed some research from the US Government (Department of Treasury, I believe). According to the study, one third of Americans do not use direct deposit. Which got me thinking.

Unfortunately, the show hosts moved to another topic after dropping this soundbyte. It would have been interesting to know how this statistic breaks down by age, geography, and a host of other demographics. Is this one-third comprised mainly of people age 50 and over? Is it mostly people who make less than $50,000 a year? Or does direct deposit status not correlate with any particular demographic?

Why would someone not choose to use direct deposit? I suspect that some would say I want to stay out of the system or I don't trust technology.

As Human Resource professionals, should we encourage all employees to use direct deposit, for the benefit of both our employees and our organizations? What can we do to encourage the one-third of Americans still on paper checks to migrate to electronic payments?

On the other hand, is there a time and a place for direct deposit? For instance, although everyone at Astron uses direct deposit for their bi-monthly paycheck, any year end bonuses awarded are paid out by live check. We believe a live check encourages the recipient to notice what they're receiving, and hopefully appreciate it more.

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