Employee Assistance Programs: The Return on Investment for an EAP

This paper examines the subject of employee assistance programs (EAP) and whether they provide a return on investment that merits their use. The historical background of the EAP will be first looked at to demonstrate its purpose and growth in the business world. Research will be presented in relation to EAP use in companies and the outcomes that resulted. Criticisms against EAP use occurs in the business world as well and therefore will be investigated in conjunction with research that supports EAP use. Finally, statistical proof for the return on investment of using an EAP will be given to conclude that EAPs are effective, cause positive outcomes related to performance, and therefore result in a return on investment for the employer. EMPLOYEE ASSISTANCE PROGRAMS 4 Employee Assistance Programs The Return on Investment for an EAP In today’s business world corporations strive to increase profits and maximize shareholder wealth in creative and new ways. Businesses implement methods such as drawing top talent with attractive compensation packages, funding innovative research and development to produce new technology, or improving the productivity and efficiency of employees’ work. Each of these factors contributes to the growth and development of a corporation along with helping increase the bottom line. Arguably the most important asset of any business is its people. When businesses ensure their employees are working at their greatest potential, productivity and efficiency usually follow; however, many issues can inhibit and restrict a business’s employees from working at their prime. Physical and mental issues both stand as potential hazards to employees and employers alike. These problems may come in the form of depression, sickness, disability, stress, burnout, absenteeism, and presenteeism (Attridge et al., 2009a). Businesses endeavor to reduce or eliminate these negative elements present in the organizational environment. Various workshops or counseling activities may be provided to increase employee awareness of such issues and how to cope with them. One tool corporations can use to reduce or eliminate these problems is an employee assistance program. Employee Assistance Programs (EAPs for short) are programs sponsored by the employer intended to support the removal of various workplace problems. Attridge explains, EAPs typically provide screening, assessments, brief interventions, referrals to other services and case management with longitudinal follow-up for mental health EMPLOYEE ASSISTANCE PROGRAMS 5 concerns and substance abuse problems. The source of these employee problems can be either personal or work related (2009a, p. 1). Despite their design and growth, though, many businesses today are reluctant to invest in an EAP because of the debate over their return on investment. Copious amounts of research cite utilization rates or the number of times employees click through a web page to access resources provided by the EAP; however, many of these studies never truly address the effectiveness of a specific employee assistance program (Lennox & Sharar, 2009). Lennox & Sharar note, “In other words, are employees achieving positive outcomes, and is the employer realizing the benefit—i.e., is an employee more productive at work because he or she is no longer suffering from depression, combating stress, dealing with substance abuse, or coping with marital conflict?” (par. 2). By examining various studies and examples from specific businesses using EAPs, a case will be presented that businesses that use EAPs do in fact achieve a sufficient return on investment, thereby justifying and recommending the implementation of EAPs by businesses worldwide. History of Employee Assistance Programs As defined above, employee assistance programs are used to help employees cope with issues affecting their job performance. This may sound a lot like counseling, but there is a difference. Attridge explains, “What ultimately distinguishes the EAP profession from other forms of mental health counseling, coaching, and occupational health services, is that it emphasizes employee work performance as a central theme guiding all program practices and services to the organization” (2009a, p. 2). Services provided by a therapist to people suffering from mental disorders focus on the betterment EMPLOYEE ASSISTANCE PROGRAMS 6 of the patients so that they may live life with greater contentment, but with an EAP, all services offered are aimed at assisting the employee with his or her issues to accomplish the end result of increasing an employee’s work performance. Employee assistance programs began in the 1940s with an emphasis on correcting job performance related to the use and abuse of alcohol (National Business Group on Health, 2008). World War II necessitated a skilled and stable workforce; however, in New York City, male workers were specifically desired and as a result, businesses began to recruit workers from the Bowery district. Alcoholics dominated that part of New York City, causing an influx in the amount of alcohol-related workplace issues. Upon addressing the problem, corporate medical directors proposed that rehabilitating the men as opposed to replacing them could be more cost effective. Thus, Occupational Alcoholism Programs (OAPs) were born (Attridge et al.). The growth of the EAP remained stagnant until the early 1970s. At this time EAPs were used to address problems beyond alcohol and substance abuse (National Business Group on Health, 2008). The government began to promote OAPs through the passing of the Hughes Act of 1970. This act required all federal and military establishments to have an OAP. Additionally, the government created the National Institute of Alcohol Abuse and Alcoholism (NIAAA) to foster the growth and circulation of EAPs across the nation. Private EAP consulting firms, such as Personnel Performance Consultants and Human Affairs International, also formed during this time (Attridge et al., 2009a). By the 1980s EAPs were being offered to assist employees with a variety of issues. Congress passed the drug-free workplace legislation in 1988, further strengthening EMPLOYEE ASSISTANCE PROGRAMS 7 the growth of the EAP. During this decade, EAPs began to shift from being internally operated by the business to being externally offered. By 1994, less than 20% of EAP programs were offered internally (Attridge et al., 2009a). Large companies offered EAPs as a standard element of benefit packages at this time. This growth brought about the diversification of issues addressed by EAPs. No longer was the EAP viewed as something used to assist recovering alcoholics. Programs involved with workplace violence, elder care, work-life balance, and supporting company-wide changes like downsizing and mergers began to arise (Attridge et al.). The following timeline summarizes the growth of the EAP. In 1985, around thirty-one percent of businesses in the United States provided an EAP to their employees (Hartwell et al., 1996). That number grew to only thirty-three percent by 1995; however, by 2003 about sixty percent of full-time workers were employed in a job that had an EAP (Roman & Blum, 2004). According to SHRM, in 2004, seventy percent of employers provided an EAP. The growth trend continued in 2007 when Employee Benefit News conducted a survey that found that seventy-five percent of companies offered an EAP (Employee Benefit News, 2007). SHRM also reported that in 2008 seventy-five percent of employers offered an EAP. This evidence indicates that EAPs have grown in popularity over the past twenty years, but does this growth validate the funds invested into these programs (Employee Benefit News, 2007)? Further research and examples must first be examined. Another factor to consider with the growth rate of EAPs is the size of the businesses offering them. In companies with staff between the numbers of 1 to 99, only 52% offered an EAP. For companies with 100 to 499 members on staff, 76% offered an EAP, and for EMPLOYEE ASSISTANCE PROGRAMS 8 companies with 500 employees or more, 89% offered an EAP (Attridge et al., 2009a). Clearly there is a correlation between a company’s size and whether or not they offer an EAP. This relationship could be the result of the financial ability of a company or even the utilization rate of the EAP. Certainly businesses with a greater amount of employees have a higher amount of potential users for the EAP, but before these factors are examined, one must analyze further information about EAPs to better understand what they offer and how they can potentially create a positive return on investment for the company.