Direct deposit provides many benefits, but getting "straggler" employees to enroll in an up and running program can be a challenging task for a payroll professional. Various tips and tricks to enhance direct deposit participation were offered by Dee Nelson, CPP, Payroll Manager, Alutiiq LCC and Larry White, CPP, Director of Payroll Training, American Payroll Association at the recent 25th Annual APA Congress, held in Las Vegas, Nevada. “The number one way to enhance participation in a direct deposit program is to put an enrollment form in the employee’s paycheck," Nelson stated, but if that doesn’t work there are many other ways to encourage employees to sign up.
Educate employees
One key suggestion offered by Nelson and White was to ask employees, especially non-participating management, why they are not using direct deposit and then educate them about the program benefits: free and/or reduced-fee banking services; the elimination of a trip to the bank; the automatic deposit of funds when the employee is away from home; the elimination of “holds” on out-of-state checks; the elimination of lost or stolen checks; the minimization of delays due to delivery services outside company control; and the ability to deposit into multiple accounts.
This type of education doesn’t have to be difficult. For example, simply putting a reminder in an employee’s paycheck telling them that their money would already have been in the bank if they had used direct deposit educates them on one of the benefits. Similarly, a payroll professional could conduct an analysis of where the employees are cashing their checks and show them how much they could save by not having to pay fees to a check cashing business. Another possibility Nelson discussed involved inviting a bank to conduct money management classes, including the advantages of direct deposit.
Promote the program
Employers can promote their direct deposit program by inviting a variety of banks into the workplace to conduct promotions, such as free checking. This can be done frequently to encourage worker sign-ups with direct deposits. Giveaways and prizes was the approach advocated by White. Small things like movie tickets and restaurant gift certificates can encourage employee participation. Nelson agreed, suggesting that a promotion be run similar to a charity campaign. It is important to get the employees involved and “fired-up,” she said. Some other promotions that were discussed included:
- A carnival-type game, where employees who sign up for enrollment in the program get a chance to spin the wheel to win a prize.
- A contest where all the employees at the company location with the biggest percentage increase in direct deposit participation would win a prize.
- Perks for employees who already participate in the direct deposit program so that non-participating employees will see the “advantage” of enrolling.
- Taking “key” people to lunch. Peer pressure exists at work and if key people spread the word about the benefits of direct deposit or others see that they are using it then they will follow suit. Especially consider management, it can be tough to convince employees to join direct deposit if their boss doesn’t utilize the program.
Get tough
Sometimes getting tough is the way to go, both Nelson and White agreed, when trying to reach 100% participation in a direct deposit program. If a state allows mandating direct deposit, then do so. Simply put, if the law allows, don’t give employees the option of receiving a paycheck. Beyond mandates, there are other tough measures that can be used. For example, pass on the bank fee to employees when they lose their paycheck, e.g., charge a “stop pay” fee. Or, establish a 3 day rule to make the employee wait to get the reissued check. Stop handing checks out at work and start mailing the checks to the employees’ homes. This could drive them to direct deposit, White said.
Finally, a few simple tips that rounded out the suggestions by Nelson and White included making the direct deposit enrollment form a “required return” form. Whether the employee opts to join the program or not the employee should be required to return the enrollment form. Also, when talking with “new hires” be sure to “sell” direct deposit as a company benefit and encourage them to start with the program from the beginning of their employment.
Reprinted with permission. © CCH