SAVEings

Today, DHS announced that it is changing the default setting for its payroll statements from paper to electronic. This means employees will receive their regular payroll data electronically instead of getting stacks of paper earnings statements by mail.  By making e-statements the default option, while giving employees the option to opt out in favor of the paper statement, we hope to increase the percentage of federal employees who use this approach while saving the taxpayers’ money.

 

This change is happening thanks in part to the President’s SAVE Award.  As I’ve written here before, the President’s SAVE Award is an annual contest for federal employees to offer ideas to save taxpayer dollars and make the government perform more effectively and efficiently. Last fall, during the first-ever SAVE Award, OMB received nearly 40,000 ideas in just three weeks. Our teams assessed the ideas, passing back the best ones to agencies to include in their FY 2011 budgets. In fact, the President's Terminations, Reductions, and Savings volume highlighted 20 SAVE Award ideas that agencies are implementing. And the suggestions that were in need of government-wide action were included in a memo that I issued to agency heads in December.

 

Many SAVE Award entries we received included concerns from employees regarding the costs associated with paper paystubs. The basic costs of printing, shipping, and distributing these pages adds up quickly.  Employees currently have the ability to opt in to receive electronic paystubs, but only 64 percent take advantage of this option.  OMB reviewed the statistics for all of the payroll providers across the government, and found that the worst performer, from an electronic paystub perspective, is the National Finance Center (NFC).  According to NFC, only 30 percent of its 640,000 customers receive electronic statements.
 

That fact — along with the savings lost with the paper printing — prompted OMB to work with NFC to change the default setting to the e-statement so that, if an employee wants a paper statement mailed to them, they would have to affirmatively choose it.  As seen in other areas such as enrolling in a retirement plan, changing the defaults can be a powerful incentive to changing behavior. When implemented at NFC, this approach will save approximately $4 million dollars.

 

This is a small change, but a powerful example of how federal employees can use their experience and unique knowledge to streamline what works in the federal government and end what doesn’t — saving taxpayer dollars and improving performance.