Follow Up on Direct Deposit...

Way back in February, Jennifer wrote a "What I'm Hearing" post on Direct Deposit: click here

Jennifer's conundrum dealt with putting a finger on a good reason people wouldn't use Direct Deposit...

Well this week at work, I've overheard three different conversations (office eavesdropping is for another post...) of people talking about direct deposit.

The first is an employee who is new but could not figure out how to set up the direct deposit. One of the things that employers, and especially Human Resources, need to make sure to do is to allow for an easy and simple process for employees to enroll in direct deposit.

The second was from an employee who has been employed for 9 months and is not enrolled in direct deposit talking to one who is a lot more tenured and is enrolled. The formers' said she was so happy it was not only a Friday, but a payday. The latter said that since they had direct deposit, they had no clue when a payday was coming up. This is one of the hesitations of people to getting direct deposit because they lose out of the joy of the paycheck coming every other week. Some of this is remedied by the bonus checks being delivered in person or in paper form.

The last was actually a conversation overheard on the work shuttle where someone commented that they were reducing their carbon footprint by enrolling in direct deposit. Getting rid of the paper trail of checks and opting out of paper statements is a great--albeit small--way to help out the environment...and check with your bank; there may be financial benefits for opting out of paper statements/checks also...

So there are some answers for you, Jennifer :)

What I’m Hearing…Generational Spending Patterns

Ever since I was a small child, I’ve always believed in saving things that might be valuable to me in the future. Plastic bags, office supplies, nostalgic items, and my most favorite thing to save – money. When I was about 6 or 7, I received a toy safe for Christmas, which I loved. I put all my dollar and five dollar bills in there, along with some business plans for the ideal restaurant I wanted to open when I grew up. I still have those plans. Perhaps that will be my second career after I retire.

So when I recently heard on the radio that one-quarter of Generation X workers live paycheck to paycheck, I was floored. The notion of living that close to the edge is something very foreign to me. I’m wondering if this is an HR issue, a cultural issue, or a combination of factors.

Looking at this issue through an HR lens, we can take several steps to prevent or mitigate this spending trend. We need to pay our employees equitably and fairly, as per our organization’s compensation philosophy. Annual market updates ensure external market competitiveness. We should also provide options for employee education on personal fiscal management.

More and more I’m seeing individuals who want to buy everything…right now. That type of spending approach will certainly lead to a lack of savings. I understand that the younger members of our workforce are juggling a variety of expenses, including cars, cell phones, rent, and student loans. While we as HR practitioners cannot directly change these social / cultural issues immediately, we can provide the tools to help our employees move away from the dangers of living paycheck to paycheck into something more secure.