Increasing Employee Acceptance of Electronic Pay Statements

For years, Payroll organizations ^[1] have been promoting technologies that can not only reduce the cost of processing but speed up the cycle time for employees to be paid via Direct Deposit, as well as use self-service to review their pay statements.  High rates of Direct Deposit are a given for many, but even those with excellent Direct Deposit compliance have not fully been able to reach an equal implementation percentage with electronic pay statements ^[2], thus negating many of the cost benefits of Direct Deposit by continuing to distribute individual paper-based pay statements.  

A recent Peeriosity Peercast^TM featured a multi-national manufacturing company that has a significant percentage of its employees that are subject to collective bargaining agreements.  While many labor unions are supportive of the use of Direct Deposit and electronic pay statements by their members, others continue to resist their adoption for a variety of reasons.

The feature company shared the following timeline related to their initiative to shift as much of their employee base to Direct Deposit and electronic pay statements:

• August 2009 – Stopped mailing statements to foreign service employees
• October 2009 – Eliminated vouchers for salaried population currently on Direct Deposit ^[3]
• January 2010 – Piloted 2 hourly non-represented manufacturing locations, introduced Paycard
• April 2010 – Transitioned remaining non-represented facilities (5 locations)
• July 2010-2015 – Worked to enroll represented locations on Direct Deposit and Paycard

After providing specific details about how they carried out this initiative, the featured company then shared the benefits they have received as a result of transitioning much of their employee population to electronic pay statements.  Those benefits include:

• Reduced outsourcing cost for printing pay statements
• Increased direct deposit/pay card participation
• Introduced employees to employee self-service and the benefit of it
• Reduced the cost of replacement checks
• Pay statements available in advance of payday
• Time and cost reduction of checks being delivered to our manufacturing facilities and being physically distributed to employees

To provide supporting context for this opportunity, a poll was created using Peeriosity’s iPolling^TM technology in conjunction with this Peercast^TM.   The first question looked at the current adoption levels of paperless pay statements, and the results showed that 70% of the participating companies have achieved at least an 80% adoption level, with an impressive 40% exceeding the 95% adoption level.  Clearly, the efforts of these companies have been successful, but the remaining holdouts are often the most difficult to convert.

The second polling question then identified what was the biggest challenge to eliminating paper pay statements for these companies. It was interesting to see that the unwillingness of the employee to give up their paper pay statement was by far the most popular response, with 43% of the companies selecting this response.  Other significant challenges included collective bargaining issues (19%), regulatory issues (10%), and employee access to electronic statements ^[4] (10%).  It was also interesting to note that 14% of the companies felt that no major challenges existed for them in this area.

Below are some of the comments provided by Peeriosity members on this topic:

Manufacturing Member:  We also employ a lot of older people who want to continue to receive paychecks instead of Direct Deposit.

Consumer Products & Services Member:  We have the initiative to eliminate as many paper statements as possible through mandates, where allowed, and CBA modifications during negotiation.

Healthcare, Pharmaceuticals, Biotech Member:  Most employees are in California, which will not let us mandate Direct Deposit. For all employees on Direct Deposit, we do require they access their pay statement via employee self-service.

Manufacturing Member:  The situation is different from country to country.

Computers & Electronics Member:  We send out a quarterly reminder to employees to “Go Green”. We see a 1-2% increase after this reminder.

Non-Profit Member:  All such notifications are available online. The challenge in turning off the paper, in some cases, has to do with certain hourly employees’ access (or lack thereof) to computers (and printers if needed).

Manufacturing Member:  We still have a few union employees that receive the paper. We are working to try and get them to convert to paperless.

How effective have your company’s efforts been to increase the adoption of paperless pay statements?  What is the biggest challenge at your company to achieving more success in this important area?

Who are your peers and how are you collaborating with them?

“Peercasts^TM” are private, professionally facilitated webcasts that feature leading member company experiences on specific topics as a catalyst for broader discussion.  Access is available exclusively to Peeriosity member company employees, with consultants or vendors prohibited from attending or accessing discussion content.  Members can see who is registered to attend in advance, with discussion recordings, supporting polls, and presentation materials online and available whenever convenient for the member.  Using Peeriosity’s integrated email system, Peer Mail^TM, attendees can easily communicate at any time with other attending peers by selecting them from the list of registered attendees. 

“iPolling^TM” is available exclusively to Peeriosity member company employees, with consultants or vendors prohibited from participating or accessing content. Members have full visibility of all respondents and their comments. Using Peeriosity’s integrated email system, Peer Mail^TM, members can easily communicate at any time with others who participated in iPolling.