Best Practices for Launching a Payroll Card Program. Successfully incorporating payroll cards into your organization

Transcription

1 Best Practices for Launching a Payroll Card Program Successfully incorporating payroll cards into your organization 1

2 Table of Contents This Best Practices Guide delivers effective ideas, approaches and processes for engaging employees, planning and launching a successful payroll card program. Different organizations have different cultures, objectives and employee needs. So naturally, they have different approaches to the delivery of payroll card programs. We encourage you to take this information and customize it to the specific needs of your organization. If you have questions, please call your J.P. Morgan Prepaid Relationship Manager or Treasury Services Manager. Introduction...3 Benefits of implementing a payroll card program...3 Employer benefits...3 Employee benefits...3 Strategic planning defining roles, goals and budget Roles: Assign responsibility...4 Goals: Define measurable benchmarks and objectives... 5 Budget: Establish payroll card program guidelines...6 Developing the employee communications plan Analysis...6 Message development... 7 Communications tools and channels Sample 12-month Communications Calendar...9 Maintaining your payroll card program Build on what works Celebrate successes Conclusion... 10

3 Introduction This Best Practices Guide is a valuable resource to help drive deployment and promotion of a payroll card program. It offers proven concepts, approaches and processes for engaging your employees and encouraging adoption of the payroll card as a convenient, cost-saving and environmentally-friendly alternative to paper paychecks. The ultimate goal is realizing increased paper-toelectronic payment conversion rates. Implementing a payroll card program requires change from the organization s and each employee s perspective. Launching a program to meet your unique needs requires commitment, planning, communication and measurement. We encourage you to absorb the information presented in this guide, customize it to address your specific goals and objectives, and incorporate it into your overall payroll card program launch activities. In addition, J.P. Morgan clients have access to the Prepaid Resource Center ( a website that offers an integrated suite of multimedia communications materials that clients can use to help promote their prepaid program. Benefits of implementing a payroll card program After this section, you will be able to: Inform Program Administrators about the employer-related benefits of a payroll card program. Communicate the employee-related benefits of receiving pay on a payroll card. Prepaid cards are rapidly becoming the disbursement vehicle of choice for organizations looking to maximize payroll efficiency, minimize the cost and inconvenience of paper checks, and deliver an easy pay alternative to employees. Employees also benefit from the convenience and added security of a prepaid card. With a payroll card, employees no longer need to visit a checkcashing center on payday, and their funds remain FDIC-insured* until spent or withdrawn important features for those without a traditional banking relationship. Employer benefits Cost savings is a primary benefit for employers encouraging employees to adopt electronic pay. Not only does electronic payroll reduce the administration and cost involved in printing and distributing paper checks, but it also helps minimize fraud. Electronic pay is an environmentally-friendly payment option, as it helps minimize your organization s carbon footprint. In addition, employers may choose to promote the program as an employee benefit a flexible pay alternative compared to traditional paper check delivery. Employee benefits For employees, a payroll card provides more immediacy, convenience and security than a paper paycheck. With payroll cards, employees save time they would otherwise spend waiting to receive and cash their paychecks; save money they currently pay in fees to cash their checks and pay bills; and, gain the opportunity to pay for purchases online and in stores without cash. Employee benefits summary: Immediate access to disbursed funds Eliminate check-cashing fees No need to carry cash Security FDIC insured* No time spent cashing checks Very convenient Easy to make purchases in stores and online Strategic planning defining roles, goals and budget After this section, you will be able to: Assign key program roles within your organization. Create program goals and objectives. Evaluate the employee pay strategy that works for your organization. Understand how to build a budget range for launch and ongoing activities. Thoughtful planning is critical to implementing a payroll program. To succeed, your organization should first assemble a team to handle program management. From there, the team will define goals and determine the budget needed to support the plans. *Funds are protected up to the maximum limit as determined by the FDIC. 3

4 Roles: Assign responsibility Begin by building a team, identifying administrative resources and gaining management commitment for the prepaid program. Payroll Card Program Steering Committee Create a steering committee consisting of strategic leaders who support the payroll card initiative. This group should establish program goals and objectives, define the strategy, allocate a budget and support the payroll delivery process change across your organization. Varying viewpoints are a definite asset in program planning discussions. The steering committee should include individuals assigned to the roles listed below. These individuals are responsible for executing and monitoring the organization s payroll card communications plan and reporting progress to the larger steering committee. Program Manager/Owner The Program Manager or Program Owner is accountable for deploying and managing the payroll card program, setting conversion goals and keeping abreast of payroll regulation through interaction with legal and payroll finance resources. This individual also assesses the program s short- and long-term results. Choose a team leader with the ability to influence cross-team constituents. Measure the Program Manager s success by the effectiveness of the program launch, achievement of adoption levels and measures of employee satisfaction. Program Administrator(s) One or more employees will need to administer the program overseeing enrollment, funding, reports analysis, systems access and the Customer Identification Program, as applicable. Working closely with the Program Manager, the Program Administrator is responsible for program maintenance and is a point person who employees can contact for program-related questions. The Program Administrator s contact information should be included in as many employee communications materials as possible, so employees know who to contact for additional information. Deployment Managers Depending on the size of your organization and number of work sites, one or more Deployment Managers may be necessary. Their primary role is to deploy and educate prospective employees about the benefits of a payroll card at remote locations. To roll out the payroll card program, these individuals adopt the overall payroll program strategy and adjust messaging to meet the needs of each facility. Foundational steps to setting up a successful payroll card program Training the Organization Budget Identify Guidelines Goals Establish Goals Determine Employee Pay Strategy Roles Form Payroll Program Steering Committee Train the Organization Before the program launches, deliver tutorial sessions to both senior management and the staff responsible for supporting the payroll card program. Preferably, executives should receive information about the payroll card during a regularly-scheduled management meeting. The presentation should provide a high-level overview of the program, present major milestones and focus on the overall benefits expected for both the company and employees. Staff responsible for supporting the program should receive more detailed training that presents the program goals, introduces promotional messaging to the target audience, and dives into specifics such as funding and administration. Training materials Create training materials (e.g., tip sheets, program overview, launch and enrollment process outline) for Program Administrators and Deployment Managers to use when deploying a program and training others. These materials will promote and support the overall payroll card program message, including the benefits to the target audience. Training sessions Hold sessions to educate administrative staff about the new benefit, the training materials available, how to communicate program benefits to employees, and what systems are in place to deploy and measure the program s success. Site champions As needed, identify staff members who can serve as program champions at remote sites. Ensure they are kept informed about program developments and successes. 4

5 Goals: Define measurable benchmarks and objectives Setting and evaluating payment conversion goals is critical to the overall success of your payroll card program. These benchmarks determine whether your conversion strategy is succeeding and what tactics you may need to adjust. Before the official program launch, decide how you want to measure progress such as employee adoption rates, cost savings, etc. Establish Goals Set clear, measurable and action-oriented goals or milestones to track success over the short- and long-term. Sample goals: Set a target percentage of conversions to payroll cards for the first six months after the communications launch. Measure the carry-over effect of the payroll card promotion on your total electronic pay rate. Track paycheck counts by population (e.g. region, location) over a 12-month period after communications launch, and identify any outliers as additional opportunities for engagement. Assess potential resistance to enrollment. Look for skeptics, educate them on the program benefits, and directly address their concerns. If offering opt out or opt in enrollment (see following segment), establish a goal to alter the pay choices in states where permitted as part of your payroll adoption plan. Employee Pay Strategy Your employee pay strategy defines the ways employees can receive their wages. Your strategy, along with marketing, influences the employee conversion rate to electronic pay. The process to convert can range from Electronic-only Pay (with rare exceptions) to an Opt In approach (employees have a ready choice). Electronic-only Pay Taking this approach, only electronic pay options are available to employees. This means employees select between having wages deposited to a bank account or to a payroll card. Inform employees who still receive a paper paycheck that on a specified date your organization will begin processing their pay on a network-branded payroll card, unless the employee provides account information for direct deposit to a bank account. Opt Out In an Opt Out environment, employees are defaulted to electronic payments which either occur to a bank account or to a payroll card. Unlike Electronic-only Pay, employees are advised they can opt out of electronic payment and receive a check. Inform employees who receive paper checks that on a specified date they will begin receiving their pay via direct deposit or a network-branded card unless they explicitly request to continue receiving paper-based payments. Employees retain the ability to opt out of the program. To encourage employee acceptance, modify the check payment process to make receiving a check less desirable for employees. For example, you could adjust the delivery of checks to the last date required by law. Opt In Employees are advised of the pay options available to them, including the option to receive their wages via a prepaid card. This is the least influential strategy to drive conversion to electronic pay. The prepaid industry is actively engaging with regulatory agencies to educate them about the benefits of payroll cards, especially for under-served consumers. Wage laws vary by state, and organizations should review payroll laws at least annually. Analyze your employee population and worksite locations to determine how to best influence conversion to electronic pay. Though J.P. Morgan cannot advise you on wage laws, we can assist you in executing your desired payment strategy. 5

6 Budget: Establish Payroll Card Program Guidelines Determine a program budget to support payroll card promotional efforts. Defining a budget will help you select the most effective approach to target your audience. Budget Guidelines Important considerations when deciding on a budget for your payroll card program: Industry research indicates that, on average, for every active payroll cardholder, the employer saves $63 per cardholder in one year. 1 Depending on the size of your organization, devote percent of your estimated first-year paper check payment savings to the growth of your paperless payment base. In subsequent years, you should plan to spend percent of the annual programgenerated savings in order to continue marketing the payroll card solution and maintain your success. Year 1: Payroll Card Launch * Organization A: 200 Employees Organization B: 1,000 Employees Organization A: 200 Employees Organization B: 1,000 Employees Annual Savings: $12,600 ** Annual Savings: $63,000 ** Year 2: Payroll Card Maintenance * Annual Savings: $12,600 ** Annual Savings: $63,000 ** Marketing budget calculation for a payroll card program * Scenarios represent estimates of industry averages and depict a probable range of alternatives. Cost for a particular company will vary. ** Dollar amounts rounded down to the nearest dollar. Developing the employee communications plan After this section, you will be able to: Create a profile of your employee audience. Budget = 50% of Savings or $6,300 Budget = 75% of Savings or $47,250 Budget = 15% of Savings or $1,890 Budget = 25% of Savings or $15,750 Develop key messages that address the needs and interests of your audience. Build a multichannel communications plan to effectively launch the program. To influence behavior change around payroll conversion, use consistent and repeated messaging that drives employee action. Develop a communications plan (timeline, marketing materials and training) to serve as a blueprint for a well-timed, coordinated sequence of events supporting the payroll conversion process. Creating a successful plan requires understanding the target audience, delivering the right message via the most effective medium, and incorporating feedback opportunities into the process. Payroll Communications the Power of 10 A simple rule of thumb for promoting the payroll card program inside your organization: Always communicate 10 times more than you think is needed. And, continue to do so well beyond initial communications launch to sustain ongoing payroll card adoption by employees. When developing a communications plan, take into account the profile of your target audience, their location(s) and their communication habits and preferences. A mix of media is most effective in generating awareness and excitement. Above all, place messages where they will reach your target audience frequently and have the most impact on driving payroll card adoption. Analysis Audience How is your audience segmented are there multiple sites and/or several groups (e.g., office staff, medical staff or temporary employees)? Do variances in targeted audience(s) require unique targeted messaging (e.g., new hire versus current employee groups)? What percentage of employees is unbanked or does not use direct deposit? Why do some employees not use direct deposit? Location How many physical employee locations or sites are you targeting? How will you distribute payroll cards from one central office or mail directly to the employee? Will you offer instant issue cards where nonpersonalized payroll cards are given to employees at the time of enrollment? Is there an onsite champion to help continuously promote the program? 1 American Payroll Association advises that the average cost to produce one paper check is $2.64. Assuming bimonthly payroll, the average annual cost is $63.36 to produce payroll checks for each employee. 6

7 Communications What communication channels are currently available within the organization? Are bilingual communications required? What is the best way to communicate the program to targeted employees? Is there an overall organizational strategic message that complements the stated goals for the payroll card program? Message Development Develop your messaging to effectively position the payroll card program to employees and drive acceptance and adoption. Use your audience analysis to determine whether one or multiple messages are needed to reach the target audiences. Note: Even if you have multiple audiences, you may not need to change the key message. If you do, commit to no more than two or three primary messages to support overall consistency. Message highlights Focus on key employee benefits: Immediate: Your money is available to use right away; no more waiting for a paycheck to be delivered and no more standing in line or paying a fee to cash paychecks. Convenient: Make purchases without carrying cash or choose to withdraw cash as needed. Secure: Keep money safe and secure; money is protected. Highlight key company benefits: Possible benefits to promote include process efficiencies, cost savings and meeting environmental ecofriendly goals. Print materials are a common and effective way to share your message, particularly when employees want to reference key features and benefits. Electronic media (organization Intranet, s, etc.) offer cost-effective opportunities to reach a broad audience with higher-frequency messages. Live, in-person communications provide an opportunity to directly engage your audience and address any of their questions or concerns. Prepaid clients can access the J.P. Morgan Prepaid Resource Center ( for print- and publish-ready communications tools. The most successful promotional strategies generally involve a mix of channels and tools. However, in certain situations a single channel may be useful. For example, you may work for a small organization where print is the most efficient and effective vehicle to deliver messages. Your J.P. Morgan Prepaid Relationship Manager or Treasury Services Manager can advise you on the most effective mix of communications and channels to achieve the best result for your organization. Communications Tools and Channels The tools you choose and the channels you select for distribution should reflect your audience analysis. Primary communications channels include the use of print materials, electronic media and live, in-person opportunities. 7

8 Examples of channel-specific tools to promote the adoption of your payroll card program include: In-person opportunities Print channel Road show/vendor fairs, where you organize promotional activity in office lobbies, cafeterias or other high-traffic areas to provide onsite enrollment and card program education opportunities Poster* Take ones (e.g., brochure, buckslips, letters, flyers, new hire letter)* New-hire orientations* Information inserts into paycheck envelopes or on pay statements Town halls, where senior-level executives demonstrate their commitment to the program by explaining how it fits within the corporate mission Program introduction and welcome letters from Human Resources, Payroll Management or senior-level executive Personnel meetings, where you discuss payment options and encourage employees to share their payroll card experiences Electronic channel *Recommended tactic for all programs regardless of organization size. campaign series* Intranet banner ads or promotional messages on home page, employee benefits page and employee pay statement page Voic message from senior executive or human resources/ benefits departments Video on Intranet promoting card benefits and use Employee e-newsletter Poster Brochure Table Tent Intranet Messaging Sample of communications tools available via the Prepaid Resource Center 8

9 Sample 12-month Communications Calendar A well-designed communications plan is critical to the success of your program. Once you identify the time period for the program launch, map out a series of communications tactics to reach your target audience and maintain adoption levels. Please note that the tactics launched within the first three months of a communications strategy will set the tone for the organization s promotional efforts to engage employees, though ongoing communications are essential. Sample 12-month Communications Calendar is shown below. Task Month Gain executive buy-in & support Define target audience and set quantifiable & qualitative goals Develop communications strategy; including timeline and channels Deploy communications plan and begin enrollment: Post Intranet items Place posters in communal areas Distribute executive letter Distribute brochures Send messages to staff Update new hire package Track results & analyze outliers Conduct informal focus groups Develop annual report for senior management 9

10 Maintaining your payroll card program After this section, you will be able to: Evaluate program performance. Identify and address areas for communications strategy improvements. Know what steps to take to strengthen your communications for an extended period. Establishing regular program reviews allows you to quickly spot strengths or weaknesses in your communications plan and make timely adjustments that help you capitalize on early wins or correct tactics that are not delivering the desired results. If payroll card adoption results are below expectations, take these steps: Analyze your tactics and pinpoint factors contributing to the shortfall. Host a focus group(s) to seek employee feedback and input on the program/communications delivery. Revise the communications plan to increase frequency, reach and duration of your messages. Look at ways to boost employee interest and response that are most appropriate for your organization. Celebrate successes When your program launches, identify and celebrate even small successes, and share those successes with your entire organization. Positive cardholder word-of-mouth stories will reach skeptics and further drive payroll card adoption by employees. Adjust Promote Identity Solution Measure Monitor Program maintenance cycle Build on what works Following the initial surge of communications activity, you should see a spike in employee interest and card adoption. Continue to monitor the program according to established goals and sustain momentum. Review results on a regular basis to determine if your program communications are reaching all employees via the various channels employed. If results are in line with your goals and projections for conversion to electronic pay, continue with the established communications plan. Conclusion J.P. Morgan supports our clients desires to drive bottom line improvements while fostering employee well-being. A payroll card program is an engaging way to achieve these types of improvements. Thoughtful planning and promotion will help you successfully achieve your payroll card program goals. As the largest prepaid issuer in the Unites States, J.P. Morgan has extensive experience in deploying and managing payroll card programs. For more than 20 years, we have processed nearly half a trillion dollars worth of prepaid payments and have helped more than 1,500 clients implement and manage successful prepaid payment programs across a wide range of payment applications. Please contact your J.P. Morgan Prepaid Relationship Manager or Treasury Services Manager for further assistance with your payroll card adoption plans and rollout. 10

11 About J.P. Morgan Treasury Services As one of the world s most trusted full-service providers, J.P. Morgan s Treasury Services delivers cash management, trade, liquidity, commercial card and escrow services that resolve the working capital and efficiency challenges treasury professionals face today. We are committed to making it as easy as possible for clients to do business with us by providing streamlined documentation, fast-track implementations, online service tools and continuing to invest in the seamless global operating model that differentiates us in the market. More than 135,000 corporations, financial institutions, governments and municipalities in more than 180 countries and territories entrust their business to J.P. Morgan. About JPMorgan Chase JPMorgan Chase & Co. (NYSE: JPM) is a leading global financial services firm with assets of more than $2 trillion and operations in more than 60 countries. The firm is a leader in investment banking, financial services for consumers, small business and commercial banking, financial transaction processing, asset management and private equity. A component of the Dow Jones Industrial Average, JPMorgan Chase serves millions of consumers in the United States and many of the world s most prominent corporate, institutional and government clients under its J.P. Morgan and Chase brands. Information about the firm is available at jpmorganchase.com. For more information, please contact your J.P. Morgan Treasury Services representative or visit jpmorgan.com/prepaid JPMorgan Chase & Co. All Rights Reserved. JPMorgan Chase Bank, N.A. Member FDIC. BRC