By, Erick Fountain
Marketing Support, Benefit Intelligence

When employees are distracted by stressful personal or life situations, they are unfocused at work and tend to be absent more often and their health may suffer. As a result, poor health often leads to higher medical costs, reduced productivity, increased absenteeism, and additional challenges that directly impact an organization.

Obviously, these circumstances are undesirable for an employer. In many cases, an employee who struggles has the potential to once again be a valuable asset to the organization.

Rather than assuming that their employees will take steps to navigate finding the help they need, a better solution for many employers is to offer their employees assistance in handling their personal issues to improve their situations and regain their former productivity levels and value to the company.
Employee Assistance Programs (EAPs) can provide assistance in a cost-effective way. Once an EAP is implemented, it can help the employer attract and retain employees, lower health care and disability claims costs, increase productivity and morale, and lower absenteeism.

There isn’t an easy fix to address the problems that employees face today, but EAPs offer various benefits that are often cost-effective. Employers do have a vested interest in how their employees are doing, and the following sections illustrate benefits that EAPs can offer to both employers and employees.

Benefits for Employees

Generally, EAPs offer a variety of benefits for employees compared to alternative options, which may be costly. EAPs can also offer immense benefits for employees’ eligible dependents.

Employees struggling with mental illness, substance abuse, and other personal problems, can benefit from getting the care they need. Outside of an employee’s ability to make tangible impacts for their employers, employees seek to thrive, both inside and outside of the workplace. From an employee perspective, studies show that:

• 80% of employees who receive treatment for mental illnesses reported improved levels of work efficacy and satisfaction.
• 86% of EAP users had clinical improvements from the help they received.
• 64% Reported reduced absenteeism.
• Employee engagement was found to grow by 8% from EAP participants.
• Life satisfaction was found to increase by 22% for EAP participants.

Source: American Psychiatric Association, Center for Workplace Mental Health, SHRM

Benefits for Employers

EAPs can offer benefits for employers. However, there are also challenges to effectively offering a program, as well as direct and indirect costs for employers to consider.
Every organization is unique, but employers may find that the benefits of an EAP outweigh the costs and challenges of administering a program, and result in a positive return-on-investment (ROI)—both financially and through the cultural impact it can have on a workforce.

EAPs can impact the bottom line of an organization—positively, in many cases. But where do these benefits come from? There are a variety of direct and indirect ways that EAPs can benefit employers, which include:

• Lower health care costs
• Fewer disability claims
• Less absenteeism
• Higher productivity and focus
• Improved employee morale
• Fewer workplace accidents
• Higher retention

While benefits such as absenteeism, disability claims, and retention rates are easy to track, others—such as employee morale—are more challenging. However, many of these benefits are interconnected and can be the result of having a healthier workplace.

EAPs have a low cost for employers, as generally, these services cost between $.75 and $1.50 per employee per month. In some cases, an EAP may even be included as part of a broader benefits offering. Findings consistently show that EAPs have a strong ROI.

A study conducted by the U.S. Department of Labor in the 1990s found that employers reap the benefits of anywhere from $5 to $16 for each dollar invested.
One other study indicated that for every dollar spent on an EAP program, there is an expected return of between $5.17 and $6.47.

Challenges and Costs of an EAP

Despite various benefits that employers may experience from offering an EAP, many face challenges as well. These include:

• Administration of the program, including managing outsourcing—For employers offering an EAP for the first time, there is often heavy lifting in administrative work in order to offer an effective program—even if using a provider.
• Costs of a program—EAPs carry both direct costs such as fees paid to a provider, and indirect costs such as the time that employees may spend away from their work to use EAP resources. The cost of an EAP can vary depending on which services are offered, whether it is administered in-house or outsourced and the number of counselors employed.
• Directly justifying the ROI—Though EAPs can offer cost savings for employers, the results can often be challenging to directly measure and evaluate. While EAP advocates can cite research showing the positive ROI of a program, it is essential to create an effective system for measuring a program’s impact on an organization.
• Communicating program details with employees effectively—Many organizations struggle with effectively communicating and promoting an EAP with their employees. Many employees may not be aware of the EAP nor realize its benefits, or they may have concerns that may be inaccurate.
• Improving employee utilization—Many organizations find it challenging to have a substantial number of employees use EAP services. By itself, low utilization isn’t always bad, but many employers struggle to address why employees might not be using an EAP to get the help they need.

While EAPs carry costs and can present challenges for employers, the benefits often outweigh these obstacles, leading to a positive return for employers. An EAP can help employees address personal problems they face and get the help they need. Ultimately, these benefits can extend to both employees and their employers. Employers often question how to take actionable steps to help address employee well-being, and EAPs can be a step in the right direction.