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The Economics of Serving Low-Income Employees at Tax Time: Implications for Credit Unions

John Hoffmire, PhD
Director of the Center on Business and Poverty
University of Wisconsin-Madison, Wisconsin School of Business and Chairman, Progress Through Business

Thomas Harms
Progress Through Business

Copyright © 2009 by Filene Research Institute. All rights reserved.

ISBN 978-1-932795-58-5

Deeply embedded in the credit union tradition is an ongoing
search for better ways to understand and serve credit union
members. Open inquiry, the free flow of ideas, and debate are
essential parts of the true democratic process.
The Filene Research Institute is a 501(c)(3) not-for-profit
research organization dedicated to scientific and thoughtful
analysis about issues affecting the future of consumer finance.
Through independent research and innovation programs the
Institute examines issues vital to the future of credit unions.
Ideas grow through thoughtful and scientific analysis of toppriority
consumer, public policy, and credit union competitive
issues. Researchers are given considerable latitude in their
exploration and studies of these high-priority issues.
The Institute is governed by an Administrative Board made
up of the credit union industry’s top leaders. Research topics
and priorities are set by the Research Council, a select group
of credit union CEOs, and the Filene Research Fellows, a blue
ribbon panel of academic experts. Innovation programs are
developed in part by Filene i3, an assembly of credit union
executives screened for entrepreneurial competencies.
The name of the Institute honors Edward A. Filene, the “father
of the U.S. credit union movement.” Filene was an innovative
leader who relied on insightful research and analysis when
encouraging credit union development.
Since its founding in 1989, the Institute has worked with over
one hundred academic institutions and published hundreds of
research studies. The entire research library is available online
at www.filene.org.
Progress is the constant
replacing of the best there
is with something still better!
— Edward A. Filene
iii
Filene Research Institute

v
Without the help of the following people, this project could not
have been completed: Dan Baker, Helaman Berrios, Harvey Black,
Mary Lou Black, Lisa Blasdale, Maria Cancian, Colleen James, Jim
Connelly, Frank Cumberbatch, Marc Ferguson, Ellen Galinsky, Don
Graves, Kathy Harms, Harriett Hentges, Robert Hoel, Shelley Hoffmire,
George Hofheimer, Joe Hotz, Bonnie Howard, Susan Hoyt,
Len Janeski, Nancy Lazgin, Scott McBride, Peter McNamee, Mark
Meyer, Helen Neuborne, Mark Nixon, Marvin Owens, Ed Rodriguez,
Danny Schneider, Karl Scholz, Josey Siegenthaler, Peter Stuart,
Joey Terrazas, John Thompson, Peter Tufano, Bob Twomey, Bernie
Wilson, Craig Wilson, Arthur Whittaker, and Michelle Zadrozny.
We are also grateful for the assistance and deep involvement of the
following institutions:
• Staples—For their vision, their willingness to help their lowincome
associates, and their patience in working with Progress.
• H&R Block—For their partnership and sponsorship in providing
cost-free services in the first year of the Tax Break program and
highly discounted services in the second.
• Nets to Ladders—For their innovative solutions and time-saving
systems.
• Filene Research Institute—For their sponsorship of this research;
without their funding, these findings would not have been
possible.
While the people and companies listed above deserve the credit for
anything good about this report, the authors take full responsibility
for any mistakes.
Finally, this report was made possible, in part, by a grant from the
National Credit Union Foundation and its signature national program,
REAL Solutions.
Acknowledgments

vii
Executive Summary and Commentary ix
About the Authors xi
Chapter 1 Overview and Development of the
Tax Break Pilot 1
Chapter 2 General Overview of the 2007 and 2008
Tax Break Results 11
Chapter 3 Program Impacts 23
Appendix 1 How-To Guide for Credit Unions 33
Appendix 2 Staples Tax Break Three-Month Comparison
Report (Data from 4/15/07 to 7/15/07) 35
Appendix 3 Staples Tax Break Six-Month Comparison
Report (Data from 4/15/07 to 10/15/07) 37
Appendix 4 Excerpt from Filene Report “Financial Stress
and Workplace Performance: Developing
Employer-Credit Union Partnerships” 39
Endnotes 47
References 49
Table of Contents

By George A. Hofheimer,
Chief Research Officer
ix
Navel gazing is a well-established hobby in most industries. Credit
unions are no exception. Chances are you read a lot of credit union
publications, go to a lot of credit union conferences, and hang out
with a lot of credit union executives at credit union conferences
talking about things you read about in credit union publications. In
short, we pay a lot of attention to what is going on in our own little
sandbox.
Occasionally, it is important to lift our heads up and take note of the
practices of a completely different group of businesses. We sometimes
find inspiration and ideas in the oddest places. In this research
study we examine the nexus of tax preparation services, an office
supply giant, and nonprofit organizations. Over the past several
years, Progress Through Business, a nonprofit organization focused
on poverty alleviation issues, partnered with H&R Block to offer
discounted tax preparation to low-income employees of Staples, Inc.,
through a pilot program called Tax Break. What made Tax Break
unique was the inclusion of opportunities for enrollment in both
public1 and private2 benefits programs in the tax preparation process.
The results of this pilot program provide valuable insights into the
economics of offering these types of services to low-income consumers.
We study tax-time activities for low-income employees in
the workplace for a few reasons. First, for most consumers, especially
low-income consumers, income tax filing is the single biggest
financial event of the year. Second, credit unions and policymakers
are continually examining tactics to better serve underserved populations.
Third, the workplace is often overlooked as a delivery channel
for financial services.
What Did the Researchers Discover?
The Tax Break program was first rolled out in January 2007 and was
run again in January 2008. In each tax year more than 400 Staples
employees took advantage of tax preparation and benefits enrollment
services. The analysis shows that there were immediate financial
benefits for participating employees in the form of higher tax credits
or refunds and other tax advantages. Additionally, the combination
of tax preparation and public and private benefits enrollment
had the effect of significantly increasing employee participation in
such employer-sponsored plans as employee stock purchase plans,
401(k) retirement plans, and tuition reimbursement programs.
Enrollment in public benefits also increased, with higher incidences
of the Earned Income Tax Credit, child care credits, renters credits,
education credits, and various advantages that are available to but
Executive Summary and Commentary
x
sometimes not accessed by eligible low-income taxpayers. In short,
participants accessed significant public and private benefits as a result
of this pilot program.
The program’s big advantage for Staples was a reduction in employee
turnover. After one full year of tracking, it was found that those who
participated in the program during the 2007 tax season showed a
32% improvement in retention over those who did not participate.
This improvement in retention more than covered the costs incurred
by Staples. According to the authors of the study, “For each employee
who participated in this program at a cost of $75, the company saved
$480.”
Practical Implications
It is important to note that this report examines something very
different from what many credit unions may be used to in the tax
preparation field. In short, we are not reporting on a modest tweak
to the mainstream Volunteer Income Tax Assistance (VITA) programs.
This study is about providing tax preparation and public/
private benefits enrollment to low- and modest-income employee
groups for a fee. Previous work by the Filene Research Institute (see
Appendix 4) confirmed the efficacy of “at-work” financial service
programs, and according to this report, replicating aspects of the
Staples program at credit unions could have “dramatic” implications.
Several areas of opportunity include tax preparation and public/private
benefits programs enrollment for:
• Credit union employees, especially in larger credit unions with
many hundreds of employees.
• Members (and non-members) residing in densely populated, lowincome,
or underserved areas.
• Employees at large companies, especially those that have a single
sponsor or have a tightly connected SEG relationship with a
credit union.
Pulling our heads out of the credit union sandbox and examining
promising innovations in related sectors can yield positive results. As
credit unions continue to seek out creative ways to better serve all
segments of the population, this study may offer unique tactics. And,
since very few of us have rock-hard abs these days, it is much more
fun to gaze at something other than our bellies!
xi
John Hoffmire, PhD
John Hoffmire is the director of the Center on Business and Poverty
at the University of Wisconsin-Madison School of Business, and
faculty associate at the Puelicher Center for Banking Education.
Before starting the Center on Business and Poverty in 2004, John
had a 20-year career in equity investing, venture capital, consulting,
and investment banking. His work has had a particular focus
on employee stock ownership plans (ESOPs). As founder and CEO
of his own investment banking firm, he helped employees buy and
manage approximately $2.2 billion (B) worth of ESOP stock. He
sold his firm to American Capital, which then went public. John left
American Capital as senior investment officer when the company
reached $1B in assets. After leaving American Capital, John was vice
president at Ampersand Ventures, formerly Paine Webber’s private
equity group. After he finished his PhD at Stanford University, he
was a consultant at Bain & Company. John is also chairman of Progress
Through Business, an organization that he founded with others
interested in economic development tools that can used by companies
to assist low-income individuals and communities.
Thomas Harms
Thomas Harms is the treasurer of Progress Through Business, a
business-based nonprofit dedicated to helping businesses with the
economic development of their low-income employees and the
communities they serve. Prior to joining Progress Through Business,
Tom was vice president of Human Resources Administration
at Staples, Inc., the world’s largest office products company. Before
joining Staples in 1998, Tom worked for CVS Drug Stores for nine
years as a vice president in Human Resources. Prior to CVS, Tom
spent his career in department stores as a human resources manager/
director working for Marshall Field’s in Chicago for 2 years and
Target Corporation (Dayton’s and Hudson’s divisions) in Detroit and
Minneapolis for 20 years.
About the Authors

The Tax Break program illustrates how companies
can reduce turnover and increase productivity
by enhancing the lives of their low-income
employees. The program was first rolled out
in January 2007, when 3,080 employees were
offered the program, and run again in January
2008. The implications of trying to replicate
aspects of the Staples program at credit unions
could be dramatic.
CHAPTER 1
Overview and Development
of the Tax Break Pilot
2
The Tax Break program illustrates how companies can reduce
turnover and increase productivity by enhancing the lives of their
low-income employees. It was one of the first programs set up after
the founding of the Center on Business and Poverty—an initiative of
the University of Wisconsin-Madison School of Business to support
and disseminate high-quality research into ways in which businesses
can help improve the long-term economic stability and well-being of
their low-income employees—and Progress Through Business, a nonprofit
dedicated to helping businesses with the economic development
of their low-income employees and the communities they serve.
With the guidance of Staples’ then-chairman, Tom Stemberg, it was
decided that the number-one priority in the effort to assist lowincome
employees in 2004 was to help them complete their taxes and
encourage them to put their refunds toward savings in programs like
the Staples 401(k) and the Employee Stock Purchase Plan (ESPP).
The program started in 2005 at a small call center located at the
Staples home office in Framingham, Massachusetts, where volunteers
from Bentley College were recruited to prepare the employees’
tax returns. In 2006 the program expanded to include a fulfillment
center located in Putnam, Connecticut. The results were good, but
it became clear that the program was not scalable because of the tremendous
effort it would take to recruit and schedule tax preparation
volunteers for the many different Staples locations.
That was when Progress Through Business contacted H&R Block,
a leading provider of tax, accounting, and related financial products
and services, and Nets to Ladders, a provider of software solutions
for public and private organizations designed to lift low-wage
citizens above their social and financial challenges. It was agreed that
Staples would select the sites, develop the communication materials,
and communicate the program to employees. H&R Block would
determine which of their offices would be used for the program and
train their tax preparers on Staples benefits. Nets to Ladders would
develop a software program that would allow individuals to go
online and register to have their taxes done and to be prescreened
for benefits.
THE KEY PLAYERS
PROGRESS THROUGH BUSINESS
The mission of Progress Through Business
is to sustain and enhance underserved
communities through initiatives, research,
networking, and strategic partnerships
to empower people and improve the
economic, environmental, and social
conditions of the communities it serves.
Progress works at two levels. On the
ground, they are staffed by a group of
well-connected business professionals in
California, Illinois, New York, Ohio, Wisconsin,
Michigan, Arizona, Florida, Utah, and
Washington, D.C. In addition, they have
boards of advisors in California, Massachusetts,
and Texas that support the staff
members’ work.
STAPLES
Staples invented the office products superstore
concept by opening their first office
products store in Brighton, Massachusetts,
in 1986 to serve the needs of small businesses.
With 93,000 talented associates,
the company is committed to making it
easy to buy a wide range of office products,
including supplies, technology, furniture,
and business services. With sales of
$27 billion (B), Staples serves consumers
and businesses ranging from home-based
businesses to Fortune 500 companies
in 27 countries throughout North and
South America, Europe, Asia, and Australia.
Headquartered outside of Boston,
Staples operates more than 2,000 office
superstores and also serves its customers
through mail-order catalog, e-commerce,
and contract businesses.
H&R BLOCK
H&R Block, Inc. is a leading provider of
tax, accounting, and related financial
products and services. Headquartered in
Kansas City, Missouri, H&R Block is the
world’s largest tax services provider, having
prepared more than 400 million tax
returns since 1955. The company and its
subsidiaries reported revenues of $4B and
net income from continuing operations of
$374.3 million in fiscal year 2007. The company
has continuing operations in three
principal business segments: Tax Services
(income tax return preparation and related
services and products via in-office, online,
and software solutions), Business Services
(accounting, tax, and business consulting
services primarily for midsized companies),
and Consumer Financial Services
(tax-related banking services along with
brokerage services, investment planning,
and related financial advice).
NETS TO LADDERS
The mission of Nets to Ladders is to
strengthen today’s human service safety
nets so that organizations can lift more
low- and moderate-income citizens above
their social and financial challenges—
and help them climb the ladders of selfsufficiency
toward more rewarding futures.
To achieve this mission, Nets to Ladders
provides a complete range of Business
Process Innovation solutions, including process
automation technology and services
that accelerate the adoption of efficient
technologies and business processes.
Central to Nets to Ladders’ service offering
is the Benefits Enrollment Network (BEN),
a Web-based software platform for benefits
enrollment and asset building. Through
BEN, Nets to Ladders currently offers
organizations and businesses two highimpact
solutions to speed up and improve
their work with low-wage citizens—Benefits
Enrollment and SavingsPoint.
3
4
Next, Staples agreed to develop and initiate a comprehensive communications
program to communicate details of the pilot to Staples
associates at the selected locations. The internal staff communication
program would be designed to include flyers, newsletters, and on-site
table tents, along with posters and other commonly used methods of
internal communication.
H&R Block agreed to strongly discourage Staples associates from
taking out refund anticipation loans (RALs). Both Staples and Progress
Through Business did not want loans offered at all, but H&R
Block explained that most individuals are aware of the availability
of the loans, and that if an associate requested one, they would be
obligated to grant the request. So, it was agreed that associates would
be informed on at least two occasions during their tax interviews
with an H&R Block tax professional that RALs were not the best
financial vehicle for the associate. Furthermore, H&R Block offered
the associates a depository account in conjunction with a debit card,
called the Emerald Card, that would pay interest on savings the
associates held in the account. Tax refunds could be loaded right
onto these debit cards if associates wished, and withdrawals could be
made within several days after the tax forms were filed, giving Staples
associates fairly quick access to their refund dollars.3
Staples also agreed to offer all their U.S. associates who were not
involved in this pilot a 20% discount on H&R Block tax services.
The discount would be offered through Staples’ Real Life Perks Web
site, an intranet site for employees looking for discounts on products
or services that Staples sponsors. The cost of setting up the discount
plan through Real Life Perks would be split by Staples and H&R
Block. Staples also agreed to promote the discount through newsletters
and other communications with associates.
Staples and H&R Block agreed on 19 locations in eight states around
the country. Two distribution centers, five fulfillment centers, one
call center, and eleven stores were selected. They also agreed on five
key Staples benefits that H&R Block tax professionals would discuss
with Staples employees:
• The Staples 401(k) plan.
• The ESPP.
• The employee health insurance plans.
• Flexible spending accounts (FSAs).
• The Staples scholarship program.
In addition, two public benefits, providing child care and energy
assistance, were included. And, finally, screening for the Earned
Income Tax Credit (EITC) program was also included as a key part
of the program.
5
The Tax Break program was first rolled out in January 2007;
3,080 employees were offered the program. It was agreed that the
first 500 employees would receive free tax service (in the months of
January, March, and April) and an opportunity to be screened for
and potentially enrolled in various company and public benefits.
After 500 employees participated, any remaining interested employees
would pay $30 for the service. H&R Block agreed to pick up the
cost of the tax preparation, and Staples promoted the program with
posters and promotional materials using their “That was easy” brand
theme. Associates made 493 appointments, and 426 showed up to
have their taxes completed. Of the 426 tax preparations, 101 benefits
cases were opened, and out of those cases, 26 enrollments for
Staples benefits were generated and three more were completed for
the public benefits. The number of tax preparations was right on the
original estimate of 15%–20% of employees participating; however,
the number of benefits enrollments was lower than expected.
Overall, however, the Tax Break program was a huge success in the
locations where it was offered. Feedback from employees at those
locations indicated that they thought the tax program was a major
benefit enhancement, whether or not they had actually participated
in the program. They felt it sent a clear message that Staples truly
cared about the financial stability of its employees.
The pilot was run again in January of 2008. There were a few
changes due to the fact that H&R Block had gone through a management
reorganization and most of the executives who had sponsored
the program were no longer there. They agreed to continue
the pilot at all but one location, providing that both Staples and its
employees would pay for a portion of the services. It was agreed that
the employees would pay $50 for the service and that Staples would
fund an additional $50 per employee served. This made sense, as
Staples understood that H&R Block would not be able to continue
to provide ongoing free tax services. Also, H&R Block was no longer
partnering with Nets to Ladders, so the up-front screening program
was not used and public benefits were not offered. Staples offered the
program to 2,662 employees at 18 of the original locations. Out of
those, 483 associates redeemed coupons and showed up to have their
taxes completed. This represents a proportional 30% increase in participation
among those who were eligible, a remarkable result given
that H&R Block was charging $50 for the service, while the program
had been free the prior year.
The analysis shows that there were clearly two immediate financial
benefits for employees who had their taxes prepared. First, the
average amount an employee received in found credits or other tax
advantages was $522. Second, the discounted tax service was worth
at least $100 to each employee served in 2008. Therefore, the average
KEY BENEFITS OFFERED TO STAPLES EMPLOYEES
The Tax Break implementation team
agreed on five key Staples benefits that
H&R Block tax professionals would encourage
participants to enroll in:
• The Staples 401(k) plan for retirement
savings.
• The ESPP, which provided a 15% discount
on the purchase of company
stock.
• The employee health insurance plans
for financial protection.
• FSAs, which provided pretax savings on
health care or child care.
• The Staples scholarship program for
continuing education.
In addition, two public benefits were
included:
• Child care—A benefit provided by most
states, sometimes referred to as subsidized
child care.
• Energy assistance—Another state
benefit, often referred to as the Low
Income Home Energy Assistance
Program.
It was also agreed that employees would
be screened for the EITC program and
the Advance EITC program, which allows
individuals with at least one qualifying child
to incrementally receive their EITC in their
paycheck throughout the year.
6
benefit to an employee was $311 (the weighted average of $522 and
$100). The $311 represents a 2% increase to a full-time employee
earning $8 an hour, and an even greater increase for part-timers.
The research shows a somewhat smaller advantage to low-income
employees than many professional tax preparation firms advertise.
An average of the figures cited by such firms is $800. It is difficult to
document the research regarding these figures. One of the difficulties
is that if an individual does his or her own taxes one year and
then uses a professional or a good Volunteer Income Tax Assistance
(VITA) site the next year, from a statistical perspective, the individual
only receives the benefit of improved tax service for one year, on
a year-by-year comparison basis. That is, the improvement is largely
limited to the first year of tax return assistance; the second year rarely
yields an improvement of $522 (or more) over the first year. Those
first-year improvements are usually gained by capturing the EITC,
child care credits, renters credits, education credits, and various other
advantages that are available to but sometimes not accessed by lowincome
taxpayers.
Then there are the advantages to both employees and Staples in
terms of the benefits enrollments. The employees screened for
benefits in 2007 showed a 16% increase in ESPP enrollment, a
29% increase in 401(k) plan enrollment, and a 42% increase in
7
scholarship program enrollment. The employees clearly benefited in
terms of stock ownership, with an immediate 15% gain at the time
the employee received the stock. They benefited by accumulating
retirement savings, including a 50% match by Staples on the first
6% an employee contributed. And finally, they gained by obtaining
some funding to continue their education. The company gained in
terms of increased participation in their benefits plans, which clearly
leads to reduced turnover and higher employee morale. A Staples
study analyzing the correlation between their attitude survey, their
customer service scores, and sales found that higher morale correlates
closely with better service, and better service results in higher sales.
Participant satisfaction with the Tax Break program was exceptional.
Out of four survey questions, 100% of program participants marked
the highest possible answer in terms of satisfaction with the program
for two years in a row. A 30% increase in participation among
those eligible was achieved in 2008, even though the employees were
charged $50 per return instead of receiving the service for free.
Clearly, the big advantage to Staples is the reduction in turnover that
this program produces. After one full year of tracking those who
participated in the program during the 2007 tax season versus those
who did not, a 32% improvement in retention was found among
those who participated. This
improvement in retention drives
the company’s ability to absorb
the program’s cost of approximately
$75 per employee,
including communication and
administrative costs (about
$25). The return on this investment is a 5.4 times multiple, or, put
another way, for each employee who participated in this program
at a cost of $75, the company saved $480. So, this certainly seems
to be a win–win for companies and the low-income employees who
participate.
The implications of trying to replicate aspects of the Staples program
at credit unions could be dramatic. Several areas of potential
value include the possibilities that credit unions could create: (1) tax
and benefits programs for their own employees, (2) tax and private/
public benefits programs for their members, and (3) tax and benefits
programs for corporations and other employers where credit unions
are or could be based. Each of these is addressed in the following
paragraphs.
Many credit union employees could benefit from a Staples-like
program. Since many credit union employees are not highly compensated,
even some of the public benefits programs could be
One hundred percent of program participants marked the
highest possible answer in terms of satisfaction with the program
for two years in a row.
THE PROCESS
Implementation of the Tax Break program
began in October 2006. The program went
live during the third week of January 2007.
WEB SITE DEVELOPED
Nets to Ladders developed a Web site
for Staples that allowed associates to
analyze the benefits available and make
an appointment with an H&R block tax
professional. Using the benefits analysis
tool, associates could enter their personal
financial information and see a customized
analysis, modeling the various benefits and
showing how each one would impact their
own financial situation in both the short and
long term. All personal information entered
was completely confidential and was
deleted at the end of the session.
H&R BLOCK TAX PROFESSIONALS
TRAINED ON STAPLES BENEFITS
Thirty-six H&R Block tax professionals
across eight states were trained on Staples
benefits and enrollment procedures to
prepare them for the benefits screenings.
Training was implemented face to face in
January 2007. Trainers included representatives
from H&R Block, Staples, and Nets
to Ladders. A 72-page presentation was
prepared by Nets to Ladders, and training
binders were distributed detailing Staples
benefits and the Advance EITC program.
PROGRAM COMMUNICATED TO
ASSOCIATES
Staples developed the communications
materials to inform all the associates at
the sites selected. They chose the name
“Tax Break” to communicate the new
benefit and developed the communications
around Staples’ popular “That was easy”
campaign. Newsletters were prepared
describing the Tax Break program, table
tents were produced, and posters were
printed.
8
helpful. Special emphasis could be placed on encouraging enrollment
in 401(k) and other retirement plans. Increased enrollment in
these plans could be especially advantageous at a credit union, since
employees who sign up might then be better able to educate members
and cross-sell retirement accounts and other products.
Members, especially in low-income areas and at companies with large
numbers of low-income employees, would particularly benefit from
on-site tax preparation programs at credit unions. Credit unions
Web site developed
H&R Block tax professionals trained on Staples benefits
Program communicated to associates
Appointments scheduled and confirmed
Tax preparation visits take place
Associates elect to allow research on individual data
Associates screened for benefits
Figure 1: The Process
THE PROCESS (CONTINUED)
APPOINTMENTS SCHEDULED AND
CONFIRMED
Associates scheduled their tax preparation
appointments online through the Web site
developed by Nets to Ladders. The associate
filled in the date, the best time for an
appointment, and his or her phone number.
An e-mail was sent to the associate
confirming the appointment and providing
the coupon for free tax preparation. At
the bottom it showed where the designated
H&R Block office was, along with the
phone number.
TAX PREPARATION VISITS TAKE PLACE
Actual tax preparation appointments began
taking place in late January. Most meetings
were held by appointment; however, H&R
Block did accommodate approximately
17 walk-in meetings. All the meetings were
conducted at local H&R Block offices.
ASSOCIATES ELECT TO ALLOW
RESEARCH ON INDIVIDUAL DATA
Since Progress Through Business planned
to study the results of this pilot, each
associate who participated was asked for
permission to use his or her data in the
research. It was explained to the associate
that the individual data would be kept
confidential, but that Progress would like to
use aggregate data collected to calculate
and report results. Progress was notified
of each associate who agreed to let his or
her data be used.
ASSOCIATES SCREENED FOR BENEFITS
Following the preparation of an associate’s
taxes, the H&R Block tax professional
was expected to ask the associate
if he or she would like to be screened for
benefits (i.e., asked if interested in participating
in the Staples 401(k) plan, the ESPP,
the employee health insurance plans, the
FSAs, or the scholarship program). If the
associate was interested in enrolling, the
H&R Block specialist completed the short
enrollment form and forwarded it to Staples
for processing. If the state-administered
public benefits of child care or energy
assistance were available, the associate
was asked if he or she would be interested
in applying for those as well.
9
More information on developing the Web
site and sample marketing materials is
available in the online appendix at
filene.org/publications/detail/hoffmire.
in Ithaca, New York, and in the North Chicago area successfully
integrate tax preparation programs into their normal operations. In
addition, programs around public and private benefits plans could be
offered to members. Furthermore, these programs could be used to
attract and retain new members.
Another benefit to credit unions is that existing and new members
would potentially have more resources to put into credit union
accounts and other products if tax services and benefits enrollments
that improved member cash flow were made available.

The analysis includes 357 Staples employees.
The researchers find that in that group, turnover
was significantly lower, benefits participation
was much higher, and employee length of
service was longer.
CHAPTER 2
General Overview of the 2007
and 2008 Tax Break Results
12
Most of the analysis was done on the first group of associates, who
had their taxes prepared in the spring of 2007. This is the group that
Staples was able to periodically report on to see what changes were
taking place. Of those associates who had their taxes prepared, 85%
(364 out of 426) granted permission to use their individual data
for research and reporting. Three different categories of data were
analyzed:
• Tracking data—Data collected by location of associates who
signed up for tax services.
• Client data—Data collected on the individual clients who had
their taxes prepared.
• Comparison data—Data generated comparing those who had
their taxes prepared to those who decided not to participate in
the Tax Break program.
As Figure 2 shows, Staples offered this program to 3,080 employees
across 19 locations (11 stores were in the Cincinnati and Cold Spring
groupings). Four hundred ninety-three associates made appointments,
representing 16% of those eligible. Of the appointments
made, 409 (83%) were kept, and 17 walk-ins took place, for a total
of 426 tax preparations.
Of the 426 tax preparations, 101 associates (approximately 24%)
were screened for potential benefits enrollment. This was disappointing,
as all associates were supposed to be screened. Part of the
problem was a systems issue: The preparers were not prompted to
ask about benefits. Also, it was later discovered that many of the tax
preparers simply were not aggressive about, or comfortable with, discussing
benefits. The fulfillment center in Chambersburg, Pennsylvania,
had the highest percentage of associates screened for benefits,
achieving a 55.17% take-up level.
The distribution center in Hagerstown, Maryland, had the largest
number of associates eligible (693); however, the fulfillment center
in Putnam, Connecticut, achieved the highest number (116) and
percentage (46.96%) of appointments made. Putnam was one of the
13
locations that had piloted the idea of providing tax services to associates
by using volunteers, and our researchers believe that is why their
participation was so high in 2007. Once associates try the service,
they spread the word about it, and participation increases in future
offerings, as indicated by the increased participation at Putnam and
by the 30% proportional increase in the participation of eligible
employees in the 2008 pilot versus 2007, even though H&R Block
charged for the service in 2008.
Figure 3 shows the percentage of total associates in each location; the
percentage of the total appointments kept by location; the number
of associates screened for benefits; the number of associates enrolled
in company benefits, public benefits, the 401(k) plan, the ESPP, a
medical plan, and a scholarship program; and, finally, the total number
of associates enrolled in company or public benefits.
Again, this figure shows that Putnam had the highest rate of participation,
with close to 26% of the total tax preparations but with only
8% of the eligible population. Dayville, Connecticut, also achieved
a higher percentage of tax preparations than percentage of the total
population.
In terms of benefits enrollments, out of 101 benefit screenings,
there were 29 actual enrollments. Enrollments in Staples benefits
accounted for 26 of the 29, and there were 3 enrollments in public
benefits. Of the 26 enrollments in Staples benefits, 11 were for the

401(k) plan, representing 42% of the Staples enrollments. Six associates
enrolled in the ESPP, six in the scholarship program, and three
in the medical plans.
Client Data
Approximately 60% of the tax clients had a family income of less
than $35,000. However, our researchers were surprised to learn
that approximately 8% of clients had a family income in excess of
$75,000. Although Tax Break was clearly communicated as being a
program for low-income associates, Staples did not prevent managers
from signing up. As it turned out, those managers were extremely
positive about the program and helped encourage associates to
participate. It was therefore felt that the inclusion of a few higherincome
employees in the program worked to Staples’ advantage.
It was also the case that a number of participating associates had
spouses with higher incomes.
Overall, 92.43% of the associates who participated in the program
received a refund. You can see from Figure 5 that there is a strong
correlation between income level and the receipt of a refund, with
those at higher income levels less likely to get a refund.
The overall average refund for the associates who participated was
$2,364, while the average refund in the United States for individual
taxpayers in 2006 was $2,199. The average refund by income level

Comparison Data
In order to analyze the impact of the Staples Tax Break program,
Staples was asked to track key data on the associates who participated
in the first pilot of the program and on those who chose not to.
The first group, the “impact group,” includes all the associates who
participated in the program and gave Progress permission to use their
data for research purposes. There were 426 associates who participated
in the program, and of those, 364 gave Progress permission
to use their data. The second group, the “control group,” consists of
the associates who were offered the Tax Break program but elected
not to participate. Staples had 364 associates who participated and
granted permission to use their data, 62 who participated but did not
give permission to use their data, and 2,654 who were offered the
program but did not participate. These numbers total to the original
3,080 who were offered the Staples Tax Break program in January of
2007. Staples’ methodology for studying this type of employee benefit
typifies how corporations look at these issues. Businesses might
actually put more stock in Staples’ methodology than in the methods
that many other researchers might have used.

DEFINITION OF TERMS
Impact group 357 Staples associates who participated in the Tax Break program and gave
permission to use their data for research, and for whom data were available.
Control group 2,643 Staples associates who were eligible for the Tax Break program but
did not participate, and for whom data were available.
Turnover Associates who terminated employment from Staples between April 15,
2007 and April 15, 2008 (includes all types of terminations).
Suspensions Associates who were suspended from active employment between April 15,
2007 and April 15, 2008 who were not terminated.
FLSA status Fair Labor Standards Act (FLSA) classification of exempt (salaried) or nonexempt
(hourly)—data show percentage of associates who were promoted
to salaried.
Full time/
Part time
Full time is 40 hours per week; part time is less than 40 hours per week.
Data show number and percentage moved to full-time or part-time status.
Regular/
Temporary
status
Regular status indicates a regularly scheduled associate; temporary status
indicates an associate who is on call.
Medical plan Participation and those who joined and left the plan between April 15, 2007
and April 15, 2008 in the impact and control groups.
Dental plan Participation and those who joined and left the plan between April 15, 2007
and April 15, 2008 in the impact and control groups.
Vision plan Participation and those who joined and left the plan between April 15, 2007
and April 15, 2008 in the impact and control groups.
Supplemental life
plan
Participation and those who joined and left the plan between April 15, 2007
and April 15, 2008 in the impact and control groups.
Dependent life
plan
Participation and those who joined and left the plan between April 15, 2007
and April 15, 2008 in the impact and control groups.
Short-term
disability plan
Participation and those who joined and left the plan between April 15, 2007
and April 15, 2008 in the impact and control groups.
18
The first pilot of the Staples Tax Break program ended on April 15,
2007 (the end of the 2007 tax season), and reports were generated
at the end of three months (July 15, 2007), six months (October 15,
2007), and one year (April 15, 2008). Since the three-month and sixmonth
reports (shown in Appendixes 2 and 3) are very similar to the
DEFINITION OF TERMS (CONTINUED)
Long-term
disability plan
Participation and those who joined and left the plan between April 15, 2007
and April 15, 2008 in the impact and control groups.
FSA—medical Participation and those who joined and left the FSA between April 15, 2007
and April 15, 2008 in the impact and control groups.
FSA—daycare Participation and those who joined and left the FSA between April 15, 2007
and April 15, 2008 in the impact and control groups.
ESPP Participation and those who joined and left the plan between April 15, 2007
and April 15, 2008 in the impact and control groups.
401(k) plan Participation and those who joined and left the plan between April 15, 2007
and April 15, 2008 in the impact and control groups.
Scholarship plan Participation and those who joined and left the plan between April 15, 2007
and April 15, 2008.
Sick pay The percentage of associates who used sick time between April 15, 2007
and April 15, 2008 in both the impact and control groups.
Performance
rating
The average performance score calculated for the associates who had
scores.
Other notes The impact group had 26 salaried employees (7.3%) and 331 hourly employees
(92.7%).
The control group had 19 salaried employees (0.07%) and 2,624 hourly
employees (99.3%).
The impact group had 317 (88.8%) full-time and 40 (11.2%) part-time
workers.
The control group had 2,186 (82.8%) full-time and 457 (17.2%) part-time
workers.
19
one-year report, and since the one-year report allows for more time
for change, the one-year report was used as the basis for this report.
It is interesting to note the following:
• Turnover was significantly lower in the impact group.
• Benefits participation was much higher in the impact group.
20
Figure 9: Study Statistics (Data from April 15, 2007 to
April 15, 2008) (continued)
Item Impact group Control group
Participants 364 originally 357 with data 2,654 originally 2,643 with data
Turnover 63 terminations 17.6% 687 terminations 26.0%
Suspensions 1 0% 1 0%
FLSA status 0.56% to exempt 0 to hourly 0.72% to exempt 0 to hourly
Full time/Part
time
2% to PT 1.7% to FT 13.5% to PT 14.0% to FT
Regular/
Temporary status
0 to temp. 0 to reg. 0.23% to temp. 0 to reg.
Medical plan
participation
62% participated 38% did not 54% participated 46% did not
Medical plan 3.4% joined 12.6% left 7.0% joined 12.3% left
Dental plan
participation
66% participated 34% did not 60% participated 40% did not
Dental plan 3.1% joined 14.0% left 8.1% joined 7.5% left
Vision plan
participation
45% participated 55% did not 37% participated 63% did not
Vision plan 10.1% joined 10.6% left 10.3% joined 8.7% left
Supplemental
life plan
participation
32% participated 68% did not 25% participated 75% did not
Supplemental
life plan
0.28% joined 5.0% left 1.1% joined 5.2% left
Dependent
life plan
participation
19% participated 81% did not 14% participated 86% did not
Dependent life
plan
0.84% joined 3.9% left 0.87% joined 2.9% left
Short-term
disability plan
participation
76% participated 24% did not 67% participated 33% did not
Short-term
disability plan
2.8% joined 15.4% left 5.2% joined 15.6% left
Long-term
disability plan
participation
48% participated 52% did not 41% participated 59% did not
Long-term
disability plan
3.1% joined 7.8% left 4.0% joined 6.8% left
FSA—medical
participation
18% participated 82% did not 9% participated 91% did not
FSA—medical 7.0% joined 3.1% left 4.2% joined 1.2% left
FSA—daycare
participation
0.01%
participated
99.9% did not 0.01%
participated
99.9% did not
FSA—daycare 0 joined 0 left 0.04% joined 0.08% left
ESPP
participation
36% participated 64% did not 30% participated 70% did not
ESPP 3.2% joined 9.8% left 7.7% joined 5.5% left
401(k) plan
participation
64% participated 36% did not 51% participated 49% did not
401(k) plan 9.8% joined 8.7% left 9.3% joined 5.9% left
21
• Generally the percentage of those joining a benefit plan was
slightly lower in the impact group, except in the case of the
401(k) plan and the scholarship plan.
• The average performance score of those in the impact group was
slightly lower than those scored in the control group. This would
seem to indicate that the program attracted average performers,
not necessarily top performers.
• The ages were very similar between groups.
• The impact group had more female associates than the control
group.
• The impact group had a higher percentage of employees with
longer service.
The 2008 Tax Break Pilot Results
In the fall of 2007, Progress, Staples, and H&R Block agreed to
continue the pilot for the next tax season. H&R Block, which had
recently gone through a major management reorganization, did
not want to continue to provide free tax services. Both Progress
and Staples understood that H&R Block could not provide free
tax services on an ongoing basis. Therefore, it was agreed that each
participant would be charged a nominal fee of $50 for the service,
and that Staples would contribute an additional $50 per participant.
It was also decided that the services would be offered at all the previous
locations, with the exception of a fulfillment center in Kansas.
Since H&R Block was no longer partnering with Nets to Ladders,
Figure 9: Study Statistics (Data from April 15, 2007 to
April 15, 2008) (continued)
Item Impact group Control group
Scholarship
program
4.8% enrolled 17 associates 3.4% enrolled 90 associates
Sick pay 49% used sick 176 associates 52% used sick 1,361 associates
Staples
performance
rating (1–5
scale)
Avg. score: 2.58 39 assoc. rated
(10.9%)
Avg. score: 2.90 199 assoc. rated
(7.5%)
Age: under
40/40+
59% under 40 41% age 40+ 59% under 40 41% age 40+
Male/Female 60% female 40% male 50% female 50% male
Service:
Less than
5 years/5 years
or more
50% less than
5 years
50% 5 years or
more
63% less than
5 years
37% 5 years or
more
22
the up-front screening program was not used, and no public benefits
were offered.
The 2008 program was offered to 2,662 employees in 18 locations.
The number of employees who actually had their taxes completed
was 483. This represents a 30% proportional increase in the participation
of eligible employees compared to the 2007 pilot. Obviously
the $50 fee did not negatively impact participation. Satisfaction with
the program was again extremely high.
Of the 483 tax preparations, 433, or 90%, led to refunds being
issued—about the same percentage seen in 2007. The number of
EITCs generated was 101, 2% more than the year before. RALs, 60
of which were issued in 2008, remained at the same level as the year
before, while the use of refund anticipation checks (RACs), 55 of
which were issued in 2008, rose fairly dramatically from the previous
year. On average, approximately 30% of H&R Block’s clients take
a RAL or a RAC. The percentage for Staples associates was 16% in
2007 and 23% in 2008.

Figure 10: 2007-2008 Data
Note: 2007 data not available for child tax credits or Emerald Card openings.
Offering an employee the opportunity to
sign up for contributory benefits at tax time
greatly increases the chance of uptake. Once an
employee is able to start saving or improving
his or her financial situation, both the company
and the employee find benefits.
CHAPTER 3
Program Impacts
24
Does the Offering of Tax Assistance
Impact Job Turnover?
The impact on job turnover was clearly the most significant finding
of the study. Turnover for those who participated in the Staples Tax
Break program was 42.7% better than those who did not participate
after three months, 37.5% better after six months, and 32.3% better
after one year. Although it appears that the improvement in turnover
seems to shrink slightly as time passes, a 32% delta after a year is
truly a considerable difference. By offering the program annually, a
credit union might be able to maintain this variance on a long-term
basis.
This improvement in retention clearly drives the company’s ability to
absorb the cost of the program. Staples spent approximately $75 per
participating employee, including communication and administrative
costs. It costs Staples more than $1,500 in hiring and training
costs to replace a terminated associate. The return on investment is
calculated as follows:
• 1,000 employees × 0.32 factor for retention
improvement = 320 employees don’t leave who
would have.
• $1,500 replacement cost per employee
× 320 employees = $480,000 savings.
• Program offered to 1,000 employees × $75 per
employee to provide tax and benefit bundling
= $75,000 on costs.
• Ratio of $480,000/$75,000 = 5.4× multiple as
a return on investment.
The reduction in turnover applies not only to the
impact group versus the control group, but also
to the control group (those offered the program)
versus the rest of the population, which was not
offered the program.
Linking the benefits offering to the tax preparation services clearly
adds value for both the employee and the company. By offering an
employee the opportunity to sign up for contributory benefits at a
time when the employee can afford them (i.e., when the employee
is about to receive a refund check and/or their withholding can be
adjusted, which will give them additional net pay), the chances of
success are greatly increased. Once an employee is able to start saving
or improving his or her financial situation, both the company and
the employee find benefits. Value to the employee is increased as
follows:
• Long-term savings—An employee begins to save long-term
through participation in a 401(k) plan. This is a major step in
the financial stability of a low-income individual. Not only is
the employee contributing, but the company is usually matching
some portion of what is being deposited. Eleven employees
enrolled in the 401(k) plan.
• Short-term savings—The employee has an
opportunity to establish some short-term savings
through participation in the ESPP. With a
six-month offering period and a 15% discount
on top of the lowest price at either the beginning
or the end of the offering period, the
employee can sell stock right at the end for an
immediate gain, or hold it for a longer term.
Six employees enrolled in the ESPP.
• Financial protection—The employee has an
opportunity to obtain medical insurance at a
low cost through a company group plan that
is usually subsidized by the company. Staples
pays 75% of the premium. Three employees
enrolled in the medical plan.
• Increased net take-home pay—The employee can learn about
and participate in an FSA, which allows the employee to pay for
medical or child care expenses with pretax dollars. No employees
enrolled in the flexible spending account.
• Continuing education—The employee can sign up for the company
scholarship program and continue their education with the
company covering some or all of the costs. Staples provides the
program to both full- and part-time employees and reimburses

A company or credit union offering tax assistance with linkage to
benefit enrollments will incur added value as follows:
• Reduced turnover—As employees begin to build savings and
financial stability, they become very loyal to the company that
helped them do it. They begin to realize that their job is helping
them build a good, strong future. They begin to take a real interest
in doing their job well and in the company as a whole.
• Improved morale—As loyalty increases, so does morale. The better
employees feel about themselves, the better they feel about the
company they work for, especially if that company has programs
and benefits to assist them.
• Increased productivity—Productivity naturally increases with
higher morale and lower turnover.
• Better customer service—Staples attitude survey studies clearly
show a strong correlation between customer service and morale.
A company that improves its morale will improve the interaction
between employees and customers.
• Ability to attract good talent—One of the best ways to attract
good talent is through the word of mouth of current employees,
especially those who have improved themselves through their
experience with the company and their benefits.
Benefits are extremely important to today’s American workers. A
white paper from Alliant Credit Union and the International Society
of Certified Employee Benefit Specialists regarding American workers
found that:
• American workers are struggling to get ahead financially and
they’re looking to their employers for help.
• Employer benefits such as health and retirement plans are seen
as important, but primarily for future rather than present needs.
Many employees have financial needs that require assistance in
the “here and now.”
• Employees with financial concerns spend significant work time
dealing with personal financial matters.
27
• Although employees are generally pleased with their income
levels, they can’t seem to save money or get ahead financially. In
fact, more than 50% describe themselves as living from paycheck
to paycheck. Less than 20% consider themselves to be financially
secure.
• More and more workers are financially strained by increasing
credit card debt.
• Employees generally feel they lack knowledge about handling
money.
• 81% do not feel financially secure.
• 88% carry monthly debt they must address.
• 75% express the need to save more money.
• 55% live paycheck to paycheck, with only the equivalent of one
or less of their paychecks in the bank to handle any financial
emergencies that may come their way. (Kane 2008)
Therefore, not only is it important to enroll employees in basic
benefit plans like medical and dental insurance, pension or 401(k),
and life insurance, but employers should also be adding some sort of
financial planning program to assist employees with their financial
issues. The Alliant study also indicates that while basic benefits plans
are readily available, financial planning or assistance is practically
nonexistent. A great way to move into the financial planning area
is to begin assisting employees with their taxes. The Alliant study
states that “employers who lack the types of programs that address
their employees’ desire for financial services and education will see a
reduction in employee productivity and engagement. A worker with
financial problems spends 15 minutes per work day dealing with
personal financial matters. This equates to 75 minutes per week, or
62.5 hours in a 50-week work year” (Kane 2008).
Correlation of Tax Assistance to
Enrollment in Company Benefits
As Figure 13 shows, not only was there a higher rate of participation
in the 401(k) and ESPP benefits among those who participated in
the Tax Break program (the impact group) versus those who did not
(the control group), employees who had their taxes prepared had a
higher participation rate across all the benefit plans.
Figure 14 shows the percentage difference between the impact group
and the control group. For example, the 401(k) plan had 64% participation
in the impact group and 51% participation in the control
group; the difference is 13%, which is 25% greater.

Figure 14: Percent Difference in Participation
The medical FSA, which is the least understood plan, had the greatest
percentage difference in participation, with the impact group
showing a 100% improvement in participation.
The next largest percentage change was the scholarship plan, with
the impact group showing a 41% improvement in participation.
Another way to portray the data is to simply show the change within
the impact group. The increase in enrollments is significant versus
29
those already enrolled in the plans. Of the 101
individuals screened for benefits:
• 42 were already enrolled in the medical plan;
3 new enrollments equals a 7% increase.
• 36 were already enrolled in the ESPP; 6 new
enrollments equals a 16% increase.
• 37 were already enrolled in the 401(k) plan;
11 new enrollments equals a 29% increase.
• 14 were already enrolled in the scholarship
program; 6 new enrollments equals a 42%
increase.
Does Linking the
Establishment of Savings
Accounts Impact
the Percentage of Low-Income
Employees Who Sign Up for New
Accounts?
While Progress was not able to test savings account openings at
Staples, we know that as part of a project in Tennessee during the
2008 tax season, Nets to Ladders was able to open savings accounts
for more than 7% of low-income participants in a tax preparation
program. The component of this project that led to such success was
the use of SavingsPoint, a product produced by Peter Tufano, Danny
Schneider, and Doorway to Dreams (D2D) for use after people have
their taxes completed and at other times.
The normal process at a VITA center is to simply complete tax
forms. In some cases, low-income participants are encouraged to go
to a different table at a VITA site to open a savings account after they
have completed their taxes. Our experience at these VITA sites is
that approximately 1% of participants open an account as they move
from table to table. Most simply leave the premises and show little
interest in the accounts, even though a high percentage of the participants
have no savings accounts.
When employees participated in the program, their participation in 401(k), medical flex spending,
and scholarship plans increased. An additional component of the program enabled 7% of employees
to open a savings account.

On the other hand, when SavingsPoint is used, participants often
stay at the same table or their information is transferred electronically
to another table, where the process of opening an account can
be simplified by the pre-population of account applications. When
the participant’s taxes are completed, the SavingsPoint software is
employed. This process greatly simplifies the opening of accounts.
Does It Make Sense for a Credit Union
to Provide At-Work Tax Assistance?
It makes a lot of sense for a credit union to offer a tax assistance program
like Tax Break. First and foremost, from a cost standpoint, the
program more than pays for itself when taking into consideration the
savings from reduced turnover that the program can achieve. A very
high (5.4 multiple) return on investment was achieved at Staples. In
addition, Staples is convinced that the program improved morale,
increased productivity, had a positive impact on customer service,
and increased the company’s ability to attract good talent. It also
serves to differentiate Staples from its competition.
A 2002 colloquium at the University of Wisconsin-Madison titled
“Financial Stress and Workplace Performance” (see Appendix 4)
found that
Employee financial stress has a tremendous impact on employer profitability,
affecting not just direct productivity levels but also internal
dishonesty, absence, accidents, substance abuse, disability and worker
compensation claims, and future legal liability. There is an enormous
opportunity to improve employer bottom line results through credit
union–employer relationships that reduce employee financial stress
. . . Dollar cost to an employer for an employee who is stressed about
money matters is $400 annually, according to one award-winning
study, primarily in work time wasted and absenteeism. Other studies
show that 15% of employees are so stressed about money that it
affects their productivity, and that percentage rises to 20%–30% for
employers whose wages are below average . . . Credit unions are in a
unique position to work with their sponsoring organizations to reduce
employee financial stress and increase workplace performance . . .
Credit unions offer products and services that can be effective in helping
to alleviate financial stress. They also have the means to distribute
these products to the people who need them. Member behaviors often
change when they start to accumulate savings. Other Filene studies
have found that savings is often a key factor in reducing financial
stress, even for low-income households. (Garman and Fried 2008,
1–8)
By assisting employees with their taxes and encouraging them to
invest their refunds into benefits or savings accounts, credit unions
31
can improve their own bottom line results and those of the employers
they serve.
The advantage to an employee is also important. First, the discounted
tax service is a real perk; at Staples, even in the second
offering when the charge to the employee was $50, the discount
alone was worth at least $100, since the service would normally cost
$150. Second, our researchers found that the average amount an
employee received in found credits or other tax advantages was $522.
Just being associated with employees receiving an average refund of
$2,364 was important to the company. It is understandable that a
firm might want to associate themselves with the biggest payment
most of their employees receive in any given year.
A local credit union (one with offices in a single metropolitan area)
could use tax preparation volunteers from a local college or university
or from a local agency or nonprofit
organization involved in
helping low-income individuals
with their taxes. Once the taxes
are complete, the tax preparer
could discuss the credit union’s
benefit plans, if properly trained, or refer the individual back to the
credit union to discuss the benefits. Even a credit union located in
more than one metropolitan area may want to pursue this method
of providing the services. See Appendix 1 for a simple step-by-step
guide to setting up a tax assistance program for a credit union using
volunteers. Visit the online appendix at filene.org/publications/
detail/hoffmire for a brief survey that will help you measure the success
of your program and provide you with important feedback.
A credit union that is spread out over many geographical areas would
need to establish a partnership with a national tax services provider.
See Appendix 1 for a simple step-by-step guide to setting up a
tax assistance program for a credit union using volunteers.

33
Appendix 1
How-To Guide for
Credit Unions
The following guide outlines 15 steps that a credit union can take to
offer their employees or select employee groups tax assistance.
Step 1 Determine which employees (hourly paid only or do you
want to include some salaried level employees) and at what
locations you wish to offer the tax assistance.
Step 2 Decide which employer benefits, if any, you wish to enroll
employees in following the tax preparation (e.g., 401(k),
FSAs, health care).
Step 3 Determine whether employees will be paid for time spent
having their taxes done or whether appointments will be
scheduled during lunch or after work.
Step 4 Project how many employees will sign up for the tax
preparation service by location (Staples projected 20%
participation and had 16% in 2007 and 18% in 2008).
Step 5 Determine your source of tax preparation professionals
(volunteer vs. paid). If internal employees are used, try not
to assign an employee to his or her immediate supervisor.
Step 6 Recruit qualified volunteers (some with appropriate foreign
language skills) and insure they are well trained (internal
volunteers can use the online IRS training program for
volunteers).
Step 7 Determine how you want to schedule the appointments.
Staples used a Web site, but even a simple sign-up sheet
would work, depending on the size of the location and the
number of employees eligible.
Step 8 Develop a rough plan of how many volunteers are needed
at each location, where they will be stationed, and who
will supervise and/or coordinate them.
Step 9 Insure that the appropriate equipment is available for each
volunteer (e.g., computer, printer, software, paper).
More information regarding Web site development, sample marketing materials, and a sample
survey are available in the online appendix at filene.org/publications/detail/hoffmire.
34
Step 10 If you decide to promote enrollment in benefits following
the tax preparation, you will need to prepare enrollment
materials and train the people who will do the enrollment
(the tax preparer or an HR representative).
Step 11 Prepare a list of what employees should bring to the tax
preparation appointment and include it in the communication
materials.
Step 12 Develop communication materials—posters, tent cards,
e-mails or flyers, payroll stuffers, and newsletters describing
the program and process—and publicize the program.
Step 13 Prepare a brief survey and/or focus groups to get feedback
from those who participate in the program.
Step 14 Finalize decisions such as who will coordinate the program
at each location; insure that a final schedule is completed,
that volunteers are notified of the schedule, that all equipment
is in place, and that arrangements for volunteers’
lunch, parking, and transportation have been made.
Step 15 Implement the program and collect the surveys or conduct
the focus groups to summarize the feedback and determine
best practices.
35

The financial problems of employees cause untold hardship monetarily,
emotionally, and physically. These money problems affect
both employees and employers, reducing productivity, increasing
absenteeism, and ultimately affecting employer profitability. To combat
a serious drain on workplace productivity, employers can provide
incentives for employees to attain financial wellness.
Credit unions can become partners in this effort by participating
with their sponsoring organizations in educational programs
and interventions designed to improve employee financial wealthbuilding
and coping skills, and assist households needing help to
remediate poor financial habits. In a program designed to address
these issues, the Filene Research Institute and the Center for Credit
Union Research conducted a colloquium with funding from the
National Credit Union Foundation, under a grant from the Ford
Foundation. The colloquium brought together top researchers in the
field and credit union executives to discuss practical approaches to
the problem.
The colloquium found that:
• As employees gain control of their financial lives, they become
more competent on the job. As the interrelatedness of financial
affairs and personal problems is recognized and confronted, both
employers and employees benefit.
• As many as one-third of all employees are stressed by personal
finance problems, and half of those individuals are so impaired
that job performance is affected.
• Employee financial stress has a tremendous impact on employer
profitability, affecting not just direct productivity levels but also
This appendix is an excerpt from Garman and Fried 2008, pp. 1–8.
40
internal dishonesty, absence, accidents, substance abuse, disability
and worker compensation claims, and future legal liability.
• There is an enormous opportunity to improve employer bottom
line results through credit union–employer relationships that
reduce employee financial stress. Through these relationships,
every participant benefits: the employer, the employee, and the
credit union. The result is a win–win–win outcome.
• A successful credit union–employer partnership may include a
number of key components:
? Structured asset accumulation programs.
? Financial education sessions.
? Payroll savings plans.
? Financial counseling or referral to counseling services.
? Targeted-purpose savings accounts.
• One comprehensive study of behavioral health disability management
found that stress is the second most frequent occupational
disease in the workplace, following only musculoskeletal disorders
such as back problems and carpal tunnel syndrome.
• Programs such as 401(k) plans protect income in the long term,
building equity and assets for retirement. IRA programs also
supplement income at a time in life when salary income must be
replaced by savings and other financial instruments. However,
there’s also a need for short-term money, to buy a new car, pay
tuition expenses, or replace a furnace. These are two different
components of the employee’s financial life, and they are both
critical to long-term success.
Creating Employee Wellness
Employers can increase their profitability by helping all employees
throughout their working careers and retirement with comprehensive
workplace financial programs. There is a close relationship among
employee financial health, employee productivity, and employer
profitability, suggesting that both parties need to achieve their financial
goals in order to succeed.
Financial education leads to greater employee awareness of financial
control, and therefore fewer financial worries, less stress, better
health, and stable personal lives. Employee financial education also
results in greater employee awareness and utilization of the company’s
benefit program and its total compensation package. The result
is less absenteeism, fewer accidents, less job turnover, lower benefit
costs, and higher profits. Perhaps most important, employees who
are financially secure are also better able to learn, change, and grow
with the company. When employers realize that employee financial
41
problems result in lower production, they see that it is more expensive
to ignore money problems than to confront them.
Employer profits are negatively impacted by employees who carry the
stress of financial problems onto the job. This cost can be substantial.
Dollar cost to an employer for an employee who is stressed about
money matters is $400 annually, according to one award-winning
study, primarily in work time wasted and absenteeism. Other studies
show that 15% of employees are so stressed about money that it
affects their productivity, and that percentage rises to 20%–30% for
employers whose wages are below average.
Study after study shows that a credit counseling and debt management
program improves employee financial wellness and job productivity,
including the quantity and quality of employee performance
and the supervisor’s rating of employees. Participants enjoy better
health and fewer concerns about health problems. Employer job outcomes
also improve, with decreased absenteeism and less work time
used for personal financial matters.
To create effective credit union/sponsor partnerships, the credit
union must obtain the support of top management by making a
compelling case for employee financial wellness programs. If the
chief executive officer, chief financial officer, human resources vicepresident,
and director of compensation and benefits all become
champions of the cause, success is guaranteed.
Best Practices in Financial Counseling
Programs
A model of a successful financial counseling program includes an
inventory of the resources available to assist employees in need of
help, assessment of the situation, education in sound money management
practices, and intervention to implement a plan. Programs
that follow this model give clients a sense of control that helps to
improve their quality of life as they learn to adapt to their financial
environment.
A cost–benefit analysis of financial counseling programs reveals
benefits and costs to each of the parties involved in the program: the
employee, the employer, and the credit union.
• Employer benefits: Financial health produces greater concentration,
creativity, and productivity by employees. Improved
financial health reduces the number of employees experiencing
problems with money, problems that often affect job performance.
As employees gain control of their financial lives, they
become more competent on the job.
42
• Employer costs: The employer bears the cost of maintaining the
service and must be confident that the cost of counseling will be
less than the cost of wage garnishments and assignments. There
are also costs involved in overhead, equipment, and utilities
for housing the financial counseling service as an independent
department or entity.
• Employee benefits: Employees gain a better sense of self-confidence
and control of their financial lives through counseling. Clients
typically expect more from financial counseling than simple credit
repair. Counseling helps to fulfill dreams and meet goals for
clients, because it gives them the information they need to manage
their financial lives. Financial counseling assists clients in the
creative use of their resources to change behavior.
• Employee costs: The employee must be willing to take the time
required to meet with the financial counselor, the time required
to gather appropriate information, and provide that information
to the counselor. If the employee is taking time off work to do
that, it must be balanced against the benefits received through
counseling.
• Credit union benefits: For the credit union, a financial counseling
program fulfills and demonstrates the credit union philosophy of
people helping people to help themselves. It reduces the risk of
costly loans, ineffective loans, and bad loans. A financial counseling
program can also promote the use of more credit union
products and services by members and create long-term member
loyalty. It can enhance credit union service at relatively low additional
cost.
• Credit union costs: The credit union incurs costs in setting up a
counseling program, including the cost of training personnel to
staff the service. Costs include both staff training time and the
materials needed to support the program. Once the program is
initiated, the credit union can also expect to incur the cost of
advertising and marketing, along with continued training for its
counselor or counselors.
In considering best practices for financial counseling programs, credit
unions need to establish criteria to give them standards for a professional
practice. These standards are most likely to change behavior,
handle crisis situations, and optimize resources.
Personal Financial Stress, Depression,
and Workplace Performance
Stress and depression take a toll on both the health and the workplace
performance of employees. To overcome the stigma attached to
these illnesses, employers and health care professionals need to work
43
to make people comfortable with the idea of seeking help. Stakeholders
also need to find ways to get involved early and prevent and identify
these disorders, because they take a terrible toll on the physical,
emotional, and financial health of society.
As American business changes its methods of operation, mergers,
reorganizations, and layoffs have increased psychiatric disability
claims among employees. In a survey of companies that recently
experienced mergers involving layoffs, the American Management
Association found a 33% higher claim incidence for mental and nervous
disorders in those companies. Another study of companies that
eliminated jobs during a five-year period reported increases in seven
of eight disability categories.
The stigma attached to mental health problems causes many people
who are at risk to avoid seeking help until a crisis occurs. The economic
burden of depression is enormous. The cost of pharmaceuticals
alone is over $1B each year, and the total cost of treating depression
adds up to a staggering $43.7B each year, including inpatient psychiatry,
outpatient psychiatry, and hospital treatment. More than half
the total cost is in absenteeism and decreased productivity. Billions of
dollars are being lost on the job to these problems.
Major workplace productivity losses due to depression include
absenteeism and presenteeism—employees who may be at work but
mentally distracted. In one study of 1,000 individuals with depression
disorders, about two hours of each work day were lost due to the
disease. Illnesses such as heart disease incur large front-end medical
costs, but over the long term they are not as expensive as depression
disorders in terms of lost productivity.
One study of 46,000 employees at six large corporations concluded
that high stress generates an annual per-employee cost of $136 in
health care costs for the disorders studied. Much of these costs is the
result of modifiable risk factors, things that can be changed through
employee assistance programs and referrals, as well as financial support
and counseling. The implication is that productivity loss can
be managed over time. What’s required is a comprehensive, holistic
approach that looks at how each employee uses various employer
benefits and programs.
How Can Credit Unions Help?
Credit unions are in a unique position to work with their sponsoring
organizations to reduce employee financial stress and increase
workplace performance. They possess the resources and expertise
to address employee financial problems, thereby reducing financial
stress and increasing on-the-job performance. Everybody wins when
employee financial problems are solved. The employer maximizes
44
return on its human resource investment. The employee grows in
terms of confidence and self-worth. The credit union builds goodwill
and fosters its reputation as a value-added partner to both employer
and employee.
Credit unions offer products and services that can be effective in
helping to alleviate financial stress. They also have the means to
distribute these products to the people who need them. Member
behaviors often change when they start to accumulate savings. Other
Filene studies have found that savings is often a key factor in reducing
financial stress, even for low-income households. Savings give
employees the resources to deal with financial crises. In cooperation
with the employer, the credit union can provide education, access to
short-term emergency savings programs, savings accounts to meet
recurring regular expenses, and IRA accounts.
An effective financial wellness program includes a number of key
elements, including:
• Education on personal financial management subjects.
• Short-term savings for emergencies.
• Long-term savings through programs such as 401(k) and IRA
contributions, and education on their effective use.
• Consumer credit counseling to intervene in crisis situations.
• Support from both the employer and the credit union.
Credit unions can offer members financial education on intelligent
consumer behavior and decision making. Employee income does not
necessarily correlate with money management skills, and employees
at every income level are likely to benefit from financial education
programs. The credit union can also provide advice specific to the
particular financial situation of its members.
Whether the situation involves a crisis or simply a deterioration of
the employee’s financial status, counseling can change the direction
of the employee’s financial fortunes. Counseling programs can reduce
loss to the credit union, improve employee performance on the job,
and increase production and profitability for employers.
When the credit union–sponsor relationship is strengthened, the
credit union can expect to achieve greater membership penetration.
An employer that’s excited about the benefits of credit union participation
is more likely to present membership to its employees in
a positive manner, through new employee orientation programs and
on-site employee seminars. A partnership can also garner a greater
share of wallet. As the relationship between the employee/member
and the credit union develops, the credit union is likely to have
45
access to a greater share of the employee’s present and future financial
life, on both the deposit and loan sides of the ledger.
An employee financial wellness program can also reestablish credit
union–employer relationships. In some cases, the relationship
between the credit union and the sponsoring organization has
become strained, or even lost. This is due to a variety of factors,
including plant shutdowns, expanded fields of membership, and
other factors.
Through financial wellness programs, credit unions can demonstrate
their social role to sponsors, and their uniqueness in the financial
services community. And if the credit union is perceived by the
employee/member as the instrument that helps them fix a stressful
situation, a lifetime of goodwill is built.
A key component in building partnerships with sponsoring organizations
is educating senior sponsor executives. The services the credit
union provides to its members are important components of the
employer’s overall service to employees. For example, when legislators
and regulators ask sponsoring companies what they are doing
to make employees’ lives better, credit union services are a significant
part of a positive answer. There’s tremendous value-added by
traditional credit union services, and senior management needs to
be made aware of this value-added. When the credit union builds
awareness on the part of senior executives, they become its champions
in the community.
The relationship with a credit union is more than an employee benefit.
It is also a value to the corporation. The relationship with the
credit union can significantly reduce sponsor costs and improve the
bottom line. The corporation sees value in its major business partnerships
and should be convinced to regard the credit union in this
same way. The company needs to see the credit union as another way
to enhance its own profitability.

47
Endnotes
1. Public benefits include federal or state programs such as child
care, health care, and home heating assistance.
2. Private benefits include employer-specific programs like tuition
reimbursement and 401(k) matching programs.
3. An Emerald Card is a cash card designed to hold the tax refund.
There are no startup or maintenance fees, and employees can
load their refunds directly onto the card, like a savings account.
Clients can add funds throughout the year, use the card anywhere
MasterCard is accepted, and take out money from participating
ATMs. The card’s balance is protected by the FDIC.

49
Garman, Thomas E., and Harold O. Fried. 2008. Financial Stress
and Workplace Performance: Developing Employer-Credit Union Partnerships.
Madison, WI: Filene Research Institute.
Kane, Tom. 2008. “American Workers: Getting Ahead or Just Getting
By.” Alliant Credit Union Benefit Solutions, August: 1–12.
References