How can you enhance participation in your company’s direct deposit program?


Your company regards payroll direct deposit as a valuable, cost-effective employee benefit, yet many employees, including management-level employees, don’t participate in your company’s direct deposit program. How can you encourage non-participating employees to sign up?


Getting "straggler" employees to enroll in an up-and-running program can be a challenging task. Dee Nelson, payroll manager at Alutiiq LLC, and Larry White, director of payroll training with the American Payroll Association, offer the following tips and tricks to encourage employees to sign up.

Provide enrollment forms. Start by simply putting an enrollment form in the employee’s paycheck. This is the number one way to enhance participation in direct deposit programs, according to Nelson.

Educate employees. Ask employees, especially non-participating management employees, why they are not using direct deposit and then educate them about the program benefits, including:

  • free and/or reduced-fee banking services;
  • elimination of a trip to the bank;
  • automatic deposit of funds when the employee is away from home;
  • elimination of "holds" on out-of-state checks;
  • elimination of lost or stolen checks;
  • minimization of delays due to delivery services outside of company control; and
  • flexibility to deposit into multiple accounts.

Educating employees does not have to be difficult. For example, simply putting notes in employees’ paychecks informing them that the money would already have been in the bank if they had used direct deposit is an easy way to drive home your point. Similarly, you could conduct an analysis of where employees are cashing their checks and show them how much they could save by not paying fees to a check-cashing business. You may also want to consider inviting a bank to conduct money management classes, including a session on 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. Consider giveaways and prizes. Small things, like movie tickets and restaurant gift certificates, can encourage employee participation. The important thing is to get employees involved and "fired-up."

Other promotion ideas include:

  • A carnival-type game, where employees who enroll in the program get a chance to spin a wheel to win a prize.
  • A contest where all the employees at the company location or department with the biggest percentage increase in direct deposit participation 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 may follow suit. Especially consider management personnel—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 best approach when trying to reach 100-percent participation in a direct deposit program. If state law allows you to mandate direct deposit, then do so—don't give employees the option of receiving a paycheck. Other measures to consider include:

    • passing on bank fees to employees when they lose their paychecks;
    • establishing a three-day rule to make an employee wait to get a reissued check; and
    • mailing checks to employees’ homes instead of handing them out at work.

    Finally, consider making the direct deposit enrollment form a "required return" form. Whether or not the employee opts to join the program, he or she should be required to return the enrollment form. And, 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.

    Source: Dee Nelson and Larry White, speaking at the 25th Annual American Payroll Association Congress in Las Vegas, NV; CCH Payroll Management Guide Newsletter, June 5, 2007.

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