Extra Paycheck? New Ceridian Survey Finds How U.S. Workers Would Use Those Dollars to Improve Their Financial Wellness
March is a Three Paycheck Month for Many Employees; Ceridian Urges Employers to Promote Programs that Help Employees Achieve Financial Wellness
MINNEAPOLIS - March 30, 2006 - U.S. workers would invest an extra paycheck or pay down debt with it, rather than use the money to buy themselves an extravagant gift or make a down payment on a new car according to a new survey of managers and executives at small- to medium-sized companies conducted by Ceridian (www.myceridian.com), a leader in managed human resource outsourcing solutions.
March 2006 is just one month in which U.S. workers who are paid every other week (rather than monthly or semi-monthly, for example) receive three paychecks. A by-product of calendar design, "three paycheck months" can occur twice a year.
Prompted by the idea of an "extra" paycheck and experts' concerns regarding employee financial wellness, Ceridian surveyed more than 4,000 U.S. workers at small- to medium-sized companies earlier this month to better understand the personal finance choices that are made in an increasingly tight economy. When asked "If you could take one paycheck and do anything with it, what would it be?," 40 percent of respondents reported that they would invest the paycheck, followed by 29 percent of respondents who would use the money to pay down debt. Save the money for a rainy day ranked third at 15 percent. Less popular responses were starting a home improvement project (7 percent), and contributing to a favorite charity (5 percent). Buying an extravagant gift for themselves or making a payment on a new car were decidedly lowest on the list of choices. Managers were more likely than executives to report that they would pay down debt with an extra paycheck; managers were largely split between paying down debt and investing the money.
Paychecks and personal finance choices have the potential to impact employee productivity. In the American Payroll Association's 2005 Getting Paid in America survey, nearly 74 percent of people surveyed revealed that it would be very or somewhat difficult to meet current financial obligations if their next paycheck were delayed for a week.
"The national savings rate continues to fall at the same time as traditional retirement- funding mechanisms, in particular corporate pensions and Social Security, are weakening, and as overall indebtedness is climbing," commented Marion Asnes, editor-in-chief of Financial Planning magazine, a professional magazine that goes to more than 100,000 financial advisors in the U.S. Asnes, who was a senior editor at Money magazine before joining Financial Planning continued, "We all need to commit to a savings routine. Why? Because it's almost impossible to save money that's 'left over' at the end of the pay period - for most families, there simply isn't any. It's important for employees to pay themselves first. By building a savings account, employees will be able to cover surprise expenses, such as, say, car repairs, without going into debt. If possible, set up an automatic savings plan with even a small amount of money taken directly out of each paycheck. As your paycheck grows, you can add to the amount going into the savings plan. In addition, we have to prepare ourselves to move forward in our careers so we can earn and save more. Education and training may be the investment we have to make in ourselves."
"In addition to calendar-triggered 'three paycheck months,' there are a number of other scenarios, such as company acquisitions or pay schedule changes that may result in an 'extra' paycheck for employees," said Sharon Stein, senior vice president of HR/Payroll for Ceridian. "Companies can seize such payroll events, or even tax-refund season, as a well-timed opportunity to encourage employee financial wellness and highlight helpful employer-sponsored savings plans, financial education programs, and other tools, such as an employee assistance program (EAP), which provides, among other things, confidential financial counseling and resources."
A new report from the American Psychological Association recently revealed that while there are many sources of stress, it is generally driven by work and money followed by health concerns and children; at 59 percent, money topped the list of stress sources. Research indicates that financial stress affects workers at all income levels. When employers partner with an EAP provider that offers confidential financial counseling and resources, employees can become more productive and better able to keep their focus on work as they take steps to improve their financial situation.
Jonathan Hefner, manager of Legal and Financial counseling services within LifeWorks, Ceridian's EAP and work-life services division, commented, "Respondents to Ceridian's paycheck survey are telling us that financial concerns, such as debt and saving for the future, are top of mind. There are a number of actions that employees can take to increase their financial wellness. An EAP is a confidential resource that can help them assess and prioritize options." Ceridian, one of the largest payroll providers in the U.S., has nearly 75 years of experience in payroll processing and has provided financial counseling through its work-life/EAP services for more than 25 years. For more on Ceridian's paycheck survey, and resources that can help employers and employees to improve financial wellness, visit www.myceridian.com/extracheck.
About Ceridian
Ceridian is changing the world of work by enabling companies to be free to succeed in their core business through its suite of innovative managed human resource solutions that include payroll and compensation, staffing, compliance, HR administration and employee effectiveness. Our wide range of HR, payroll, work-life and benefits services are designed to help companies maximize the value of their people. Ceridian Corporation (NYSE: CEN) is an information services company serving businesses and employees in the United States, Canada and Europe. For more information about the human resource outsourcing company's comprehensive array of solutions, visit www.myceridian.com or call (800) 729-7655.
MINNEAPOLIS - March 30, 2006 - U.S. workers would invest an extra paycheck or pay down debt with it, rather than use the money to buy themselves an extravagant gift or make a down payment on a new car according to a new survey of managers and executives at small- to medium-sized companies conducted by Ceridian (www.myceridian.com), a leader in managed human resource outsourcing solutions.
March 2006 is just one month in which U.S. workers who are paid every other week (rather than monthly or semi-monthly, for example) receive three paychecks. A by-product of calendar design, "three paycheck months" can occur twice a year.
Prompted by the idea of an "extra" paycheck and experts' concerns regarding employee financial wellness, Ceridian surveyed more than 4,000 U.S. workers at small- to medium-sized companies earlier this month to better understand the personal finance choices that are made in an increasingly tight economy. When asked "If you could take one paycheck and do anything with it, what would it be?," 40 percent of respondents reported that they would invest the paycheck, followed by 29 percent of respondents who would use the money to pay down debt. Save the money for a rainy day ranked third at 15 percent. Less popular responses were starting a home improvement project (7 percent), and contributing to a favorite charity (5 percent). Buying an extravagant gift for themselves or making a payment on a new car were decidedly lowest on the list of choices. Managers were more likely than executives to report that they would pay down debt with an extra paycheck; managers were largely split between paying down debt and investing the money.
Paychecks and personal finance choices have the potential to impact employee productivity. In the American Payroll Association's 2005 Getting Paid in America survey, nearly 74 percent of people surveyed revealed that it would be very or somewhat difficult to meet current financial obligations if their next paycheck were delayed for a week.
"The national savings rate continues to fall at the same time as traditional retirement- funding mechanisms, in particular corporate pensions and Social Security, are weakening, and as overall indebtedness is climbing," commented Marion Asnes, editor-in-chief of Financial Planning magazine, a professional magazine that goes to more than 100,000 financial advisors in the U.S. Asnes, who was a senior editor at Money magazine before joining Financial Planning continued, "We all need to commit to a savings routine. Why? Because it's almost impossible to save money that's 'left over' at the end of the pay period - for most families, there simply isn't any. It's important for employees to pay themselves first. By building a savings account, employees will be able to cover surprise expenses, such as, say, car repairs, without going into debt. If possible, set up an automatic savings plan with even a small amount of money taken directly out of each paycheck. As your paycheck grows, you can add to the amount going into the savings plan. In addition, we have to prepare ourselves to move forward in our careers so we can earn and save more. Education and training may be the investment we have to make in ourselves."
"In addition to calendar-triggered 'three paycheck months,' there are a number of other scenarios, such as company acquisitions or pay schedule changes that may result in an 'extra' paycheck for employees," said Sharon Stein, senior vice president of HR/Payroll for Ceridian. "Companies can seize such payroll events, or even tax-refund season, as a well-timed opportunity to encourage employee financial wellness and highlight helpful employer-sponsored savings plans, financial education programs, and other tools, such as an employee assistance program (EAP), which provides, among other things, confidential financial counseling and resources."
A new report from the American Psychological Association recently revealed that while there are many sources of stress, it is generally driven by work and money followed by health concerns and children; at 59 percent, money topped the list of stress sources. Research indicates that financial stress affects workers at all income levels. When employers partner with an EAP provider that offers confidential financial counseling and resources, employees can become more productive and better able to keep their focus on work as they take steps to improve their financial situation.
Jonathan Hefner, manager of Legal and Financial counseling services within LifeWorks, Ceridian's EAP and work-life services division, commented, "Respondents to Ceridian's paycheck survey are telling us that financial concerns, such as debt and saving for the future, are top of mind. There are a number of actions that employees can take to increase their financial wellness. An EAP is a confidential resource that can help them assess and prioritize options." Ceridian, one of the largest payroll providers in the U.S., has nearly 75 years of experience in payroll processing and has provided financial counseling through its work-life/EAP services for more than 25 years. For more on Ceridian's paycheck survey, and resources that can help employers and employees to improve financial wellness, visit www.myceridian.com/extracheck.
About Ceridian
Ceridian is changing the world of work by enabling companies to be free to succeed in their core business through its suite of innovative managed human resource solutions that include payroll and compensation, staffing, compliance, HR administration and employee effectiveness. Our wide range of HR, payroll, work-life and benefits services are designed to help companies maximize the value of their people. Ceridian Corporation (NYSE: CEN) is an information services company serving businesses and employees in the United States, Canada and Europe. For more information about the human resource outsourcing company's comprehensive array of solutions, visit www.myceridian.com or call (800) 729-7655.
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