About the Program

Presented by the Financial Literacy Center, a joint center established by the RAND Corporation, Dartmouth College, and the Wharton School of the University of Pennsylvania in order to develop educational tools and programs that help individuals prepare for their long-term financial stability.  Although produced by grant of the NYSE Foundation, the views, concepts and information set forth in "The Workplace Financial Fitness Kit" are those solely those of the Financial Literacy Center, and references to “we”, “our” and similar terms refer to the Financial Literacy Center or its affiliates.  NYSE Euronext and its affiliates do not adopt, endorse or control the content contained in the Workplace Financial Fitness Kit, and do not recommend, or make any representation as to the risks or benefits from, any securities or investments, or third-party products or services.  Investors should undertake their own due diligence regarding securities and investment practices.

The recent financial crisis has taught us many things. Chief among the lessons learned is that financial illiteracy is widespread and that the consequences of making poor financial decisions are severe. Decisions about how much to save to secure a comfortable retirement, how to invest, and how to protect wealth are overly complex. Without guidance, employees may end up without the financial fitness necessary to meet short- and long-term goals.

Lack of employee financial fitness has a direct and indirect impact on the company bottom line. Enhanced employee financial fitness reduces company costs in a variety of ways:

  • Reduced absenteeism to take care of personal financial matters.
  • Reduced human resource administrative costs to process wage garnishments and requests for payroll advances and 401(k) loans.
  • Reduced health care premiums.
  • Reduced human resource administrative costs because fewer questions are asked.
  • Reduced pressure to increase salaries and wages.
  • Reduced Social Security payroll taxes because more workers utilize pre-tax health and dependent care plans.

New Ways to Make People Save: The Dartmouth Project

Urging employees to participate in retirement savings plans has always been a challenge. However, the findings of a study by researchers at Dartmouth College, through a grant provided by the National Endowment for Financial Education, show that specific low-cost strategies succeed in boosting employee participation rates.

Furthermore, there are several ways in which financial fitness enhances company profits indirectly and ultimately increases employee loyalty:

  • Increased participation in and contributions to employer-sponsored retirement plans.
  • Increased awareness of employer benefits.
  • Increased morale and work satisfaction.
  • Reduced turnover due to attraction and retention of qualified workers.
  • Increased worker productivity.
  • Reduced stress over financial matters and decreased stress-related illnesses, including alcohol and substance abuse.

It is incumbent on employers to assist their employees in becoming more financially fit. Nearly four in five adults claim they would benefit from financial advice and answers to everyday questions from a professional (2010 Consumer Literacy Survey, National Foundation for Credit Counseling). Yet, while people are, in general, accustomed to and comfortable with consulting a physician or lawyer, most won’t visit a financial advisor. But the majority of employees lack basic financial knowledge and are not well equipped to deal with complex financial decisions.

To help overcome the many barriers individuals face when attempting to make financial decisions, we have designed a customized workplace program using an innovative and practical approach based on well-established financial literacy and marketing principles. The goal is to provide a checklist of recommended financial fitness action items along with marketing materials to encourage employees to improve their financial fitness. The financial literacy principles that guided the content development are the well-documented and severe lack of financial knowledge among Americans; the resulting inertia and difficulties in making financial decisions; and the large differences in employees’ knowledge, needs, and goals. The marketing principles that guided content and development include customization, motivation followed by implementation, and a defined three-stage (basic, intermediate, and advanced) process.  

The Workplace Financial Fitness Kit contains two toolkits: an Employer Customization Toolkit and an Employee Customization Toolkit.

The Employer Customization Toolkit contains (1) the Employer Checklist, (2) motivational information about the importance of every employer providing or facilitating 10 key steps to financial fitness, and (3) additional materials to help employers with implementation of the financial fitness recommendations. The recommendations are divided into three stages: basic, intermediate, and advanced. Employers who currently offer financial fitness assistance can use the Employee Customization Kit to motivate employees to participate in the financial fitness programs offered.

The Employee Customization Toolkit was designed to empower employees to improve their own financial fitness. The Employee Customization Toolkit contains (1) the Employee Checklist, (2) motivational information on the importance of every employee improving aspects of their financial fitness, and (3) implementation guidelines for each recommendation. Like the Employer Customization Toolkit, the employee toolkit allows individuals to customize or select the fitness recommendations that suit their needs. Employees can use the Employee Customization Toolkit by moving through stages 1 through 3 systematically.

We hope companies will embrace the Workplace Financial Fitness Kit and customize it to meet their goals of assisting employees in the attainment of financial independence and security.