Paper checks. While these little slips of paper can make anyone’s day better, they are lots of work for payroll employees and costly for your company as a whole. But there’s another problem with paper checks — they’re wasteful and bad for the environment.
Why is direct deposit better for your bottom line than paper checks?
Business owners save about $3 per check when using direct deposit. Here are a few ways it helps you save:
- Save money on supplies — with direct deposit there is no longer a need to buy paper checks, postage, envelopes, etc.
- Avoid payroll fraud — payroll check fraud is much easier to avoid with direct deposit
How does direct deposit help your payroll team?
Your payroll team works hard and direct deposit is easier for many reasons including:
- Less work for your payroll team — with direct deposit your payroll team will spend less time processing paychecks.
- Lost or stolen checks aren’t a problem — since there are no paper checks with direct deposit, the risk of losing a check is eliminated on both the employer side and the employee side. There also is no risk of the check being damaged in the mail.
- Deposit checks from home — direct deposit can be processed and received anytime from anywhere, something that is important for remote employees who process payroll.
Why is direct deposit better for the environment?
Direct deposit is much more sustainable than paper checks. 410 million acres of trees are cut down every year around the world for the use of paper. When this many trees are cut down, it not only reduces the oxygen trees produce that we need to breathe, but it eliminates entire ecosystems and reduces biodiversity.
However, trees are not the only thing needed to produce paper checks, they also need ink to create them and fuel to deliver them.
Every year in the U.S., paper checks require:
- 10 million trees
- 250 gallons of oil
- 1 billion gallons of water
Americans are looking for companies that value sustainability. When it comes to recruitment, this article by Solar Builder states that:
- 70% of people are more likely to choose to work for a company with a green footprint
- More than 10% would accept a salary that is $5,000 to $10,000 lower if the company values sustainability
- More than 3% would even accept a salary decrease of $10,000
How can you increase your direct deposit enrollment?
For most companies, direct deposit isn’t mandatory, but it is highly recommended. There are multiple ways to increase your employees’ desire to enroll in direct deposit. Some of the ways you can increase your direct deposit enrollees include:
- Hosting an event about direct deposit — for employees who are skeptical about direct deposit, hearing why it is important directly from an HR or payroll professional could make a huge difference.
- Speak with managers — larger companies with multiple levels of management may make it harder to pass along information. Asking lower-level managers to speak directly with their reportees about direct deposit may help to encourage them to make the switch.
- Provide benefits that require direct deposit — there are many benefits out there that require employees to have direct deposit. For example, an on-demand pay benefit, also known as an earned wage access benefit, can be a benefit to your company that requires direct deposit for employees to utilize it.
Increasing your direct deposit enrollment is an important step to improve your bottom line and your sustainability efforts. Providing a benefit, like earned wage access, which requires direct deposit, is an easy way to improve direct-deposit enrollment.
To learn more about how an on-demand pay benefit could help your company, take a look at this blog.