79% of the 1006 firms surveyed by Hewitt Associates offered an EAP and the number is steadily growing. Why? When your organization implements an EAP it can expect to accrue benefits along three parameters:
- Financial rewards accruing to your organization's bottom line,
- Tools available to your management team, and
- Gratitude and loyalty of employees and their families
Financial benefits include those associated with:
- Health Care Cost Containment
- Employee Retention, and
- Litigation Avoidance and Legal Defense
Health Care Cost Containment
- The landmark 1988 McDonnell Douglas independently conducted longitudinal study of its EAP documented that a well-managed EAP is an extremely effective way to manage health care costs.
- For example: For an employee with a diagnosis of alcoholism, the average per case employee medical claim cost for those who had used the EAP was $9898 below that of a alcoholic who had not used the EAP.
- And, for employees with a psychiatric condition, the average per case employee medical claim cost for EAP users was $715 below that of non-EAP users.
- Abbot Labs compared total medical costs of EAP users with those of non-users. Those who had used the EAP averaged $9,156 less per person for inpatient care than those who had never used the EAP.
- The Campbell Soup Company after implementing an EAP experienced a 28% reduction in per employee behavioral health care costs.
- Fifty percent of EAP users will have their needs met via the EAP, eliminating the need to utilize the behavioral health care benefit and, thereby, helping to keep premiums lower.
- The same McDonnell Douglas study calculated their Return-On-Investment at 4:1, or $5,100,000.
- Employees using EAP services had fewer absences, fewer accidents, and stayed with the company longer.
- A 1995 survey by the Conference Board found 21% fewer accidents, 35% reduced turnover, 59% lower absenteeism, 62% higher productivity and 68% increased morale among EAP users.
Given the average cost of employee termination and new employee recruitment and training, if your EAP saves one job per year it has probably paid for itself. And an EAP is the most direct and cost-effective way to tell your employees that they really are your most important resource.
Litigation Avoidance and Legal Defense
Employee lawsuits have doubled annually since the mid-80s. EAPs serve as an added level of defense or insulation in wrongful discharge, sexual harassment and discrimination suits.
"Although it seems unfair that employers are stuck solving so many societal problems, fairness isn't an issue when there are no other options. By helping employees help themselves, employers can help their bottom line. An independent EAP is the best way to achieve both goals without creating unnecessary legal exposure."
Source: Jonathan Segal, "Ignorance Is Bliss", HRM Magazine, December 1995.
Providing your management team with the resources needed to solve problems is critical to your organization's success.
EAPs provide invaluable management tools that give your organization a leadership advantage. These tools include:
- Expert Consultation & Coaching: When you have a troubled employee you invariably also have a manager or supervisor equally troubled trying to figure-out what to do. Situations of personal problems of employees represent one of the most difficult aspects of managing people. EAPs provide your management team a means to quickly and appropriately address their concerns - coaching on what to say and how to say it - while avoiding the all-too-common pitfall of over-involvement.
- Training in Communication and People Management Skills: EAPs train the management team how to identify, document, approach and refer troubled employees, equipping them with effective intervention techniques. Specialized training on topics such as stress management, cultural diversity, substance abuse in the workplace, conflict resolution, etc., are also generally part of an EAP service package.
- Organizational Support and Development: Internal Human Resource departments usually have limited manpower and time. EAPs offer an organization's Human Resources staff a variety of skills and services, supporting efforts to prevent workplace violence and sexual harassment or mediate conflict and deal with change. EAPs can also assist organizational efforts to comply with various State and Federal regulations.
The chances of any of us moving through life without encountering some sort of personal problem or crisis - stress, divorce, drug abuse, grief - are zero.
EAPs provide employees and their families with an accessible, confidential, no-cost method of addressing and resolving a wide range of personal problems.
While there can be no doubt that personal problems spill over into the workplace to significantly affect the bottom line, there is no way to put a dollar figure on a job saved, a family kept together, the gratitude of an employee helped or avoiding the loss of a life.
These things don't show-up in the annual report, but they are real and satisfying nonetheless.