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...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.