Who looks at their paychecks any more?

PaydayPERX offers a number of incentive programs for companies running electronic payroll as well, but the program that is of immediate interest to advertisers - and quite frankly, the one for which we are best known - is that of placing advertisements on paper payroll checks. At trade shows and in initial conversations we are sometimes asked, "Who looks at their paychecks any more - don't most people get electronic checks?"

Usually the people asking are from agencies or other relatively small companies, highly tech-oriented. Industry pundits have been proclaiming the death of the paper check since 1999 if not earlier. In that time, many small businesses have transitioned to electronic checking, at great savings to their bottom line. But the reality is that for a large employer - large enough to see worthwhile economies of scale in its paper purchasing, and large enough to have a high absolute number of employees leaving the company, the savings are only seen when paychecks are being mailed out; the real cost of running payroll for those companies is in postage, dwarfing the cost of the stock and the processing even if they are doing it by in-house paid staff. Many large companies avoid that cost by the relatively simple policy of making employees pick up their paychecks at their place of work itself.

A large company might pay anywhere from 15 to 20 cents per employee for electronic check processing. Postage, on the other hand, will run more than 35 cents per piece even with generous discounts from bulk mailing in walking route order. So if a company mails their checks, they can save dramatically by switching to electronic processing. But aside from postage, the paper stock itself costs somewhere between 2 and 5 cents per piece, which is an even more dramatic relative savings than electronic processing, if all we look at is hard costs.

Moreover, a company with high turnover or what can be euphemistically called a heterogenously reliable work force (meaning, in non-marketing-buzzword terms, that a statistically significant portion of the workforce does not even show up for the first work assignment) would be wasting an unsustainable amount of revenue inputting employees into an electronic system. Not all staffing or placement agencies fall into that category, but certainly some do.

Additionally, unlike paper checks that only require a qualified bookkeeper and some acceptable secure payroll paper stock, electronic checks are not something easily managed in-house without dedicated personnel or teams of personnel, all of which require specialized skills and none of which come cheaply. Companies that have done their own payroll in-house are often unwilling to send it off to a third party, no matter how secure.

These are only a few of the forces that have impeded the adoption of electronic checking in the past ten years, but they are significant and they suggest that there is little incentive for certain business segments to ever move to electronic payroll. We have gravitated towards these segments in order to provide a legitimate value to them and a longer maturity cycle for our product.

The other advantage of these businesses to advertisers is that they are hourly employees, more often than not, and they are paid more frequently. Nearly all the employees receiving our checks receive them weekly, and that means that they receive their ad impressions twice as frequently as with employees paid every two weeks. Moreover hourly workers have more incentive to look at their checks because the amount will vary from paycheck to paycheck. Interestingly our data shows that the vast majority of salaried workers also look at their checks. And in actual fact it is virtually impossible to sign a check with our ads preprinted on them without seeing the ads, as they fill up the entire white space on the check right next to the signature line; so whether an employee is hourly or salaried, they are seeing advertiser messages and being affected by them on the back of their check. They can't cash their check without seeing the message.

With that in mind we can see that an ad that is attention-getting with a strong offer from the beginning is going to generate more interest for those employees who see the message while they're in the process of signing the check. This can happen at work, at home, even in the car or in the line at the bank, so you want to present something that's easy to communicate and boldly displayed whenever possible.