Employee Assistance Programs Cut Corporate Costs

By Lowery, Jim | THE JOURNAL RECORD, February 17, 1999 | Go to article overview

Employee Assistance Programs Cut Corporate Costs


Lowery, Jim, THE JOURNAL RECORD


Today, most large organizations, and about one-third of companies with 100 employees or less, offer some form of employee assistance. Employers have learned that an effective employee assistance program (EAP) may actually pay for itself in better work productivity, lower employee turnover and improved labor relations. Further savings can occur due to lower costs for health insurance, disability payments and accidents.

Although some employers worry that a large number of employees will needlessly access the services of EAP, it is estimated that EAP services are used by only 3-5 percent of the work force. That 3-5 percent accounts for 80 percent of the total health benefit use, thus increasing health premiums and problem-related performance. When individuals struggle with marital difficulties, drug abuse, stress disorders or other issues, those problems don't end when they arrive at work. A recent study showed that those with serious personal problems cost their employers up to four times more than other employees. Here's how:

* Absenteeism two or three times higher than normal. * Safety hazards and accidents two to four times higher than normal. * Medical claims and high insurance costs. * Grievance procedures, garnishments and five times more workers compensation claims. * Errors in judgement and poor quality of work. Facing these frightening statistics, many organizations are looking at existing EAPs or considering offering one in the hopes of reducing those high costs. According to one study of top national corporations, companies can expect to recover from $3 to $10 for every $1 invested in an effective EAP. Other studies show that EAPs have reduced: * Medical care utilization by 26-29 percent. * Sick days by 38-47 percent. * Sickness and accident benefits by 33-48 percent. Notice the emphasis here is on "effective" EAPs. While different work forces have varying needs, generally the more comprehensive programs that are easily accessible, confidential and actively promoted are the most effective. Following are some suggestions for implementing an EAP or improving an existing one: * For confidentiality purposes, consider outsourcing your EAP.

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