Employee assistance plans are a vital part of your total compensation package. However, because EAPs usually have a lower utilization rate when compared to other benefits, they are often questioned and eventually put on the budgetary chopping block.
If you find yourself in one of these situations, it’s important to understand the potential ROI of a well-established program and rethink how you assess EAP value.
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By providing mental health benefits and support to employees in crisis, these programs bring together two high-impact options for job seekers looking for an engaged, empathetic organization. More than 60% of American workers, regardless of company size, have access to an employee assistance program. In fact, over 97% of U.S.-based private companies with more than 5,000 employees have EAPs.
In addition to being widespread, when properly selected, communicated and administered, EAPs are also one of the most cost-effective benefits. Even if it isn’t used daily, regular upkeep and communication will ensure the plan pays for itself time and time again by mitigating lost productivity, short-term disability claims and resignations.
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EAPs are not an expensive benefit. Depending on your program, they can be as little as a dollar per employee per month. Even a life insurance policy is going to be four times the cost, and medical benefits are 20 to 30 times the cost. We advise our clients that the EAP is one of the least expensive company-sponsored benefits an employer can offer.
When it comes to the benefits themselves, some EAP vendors have grown far beyond their original short-term, crisis-focused offering to include highly desired benefits like mental health, well-being and financial wellness. Many life and disability carriers also often offer a free, basic EAP as part of their service.
For example, one of our clients decided to invest in their EAP program. Suddenly, when a manager in a very visible role was dealing with a family emergency, the EAP program was able to help him locate long-term care, manage finances and begin a transition, all easily and from home.
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Now your EAP plan has kept one person out of a crisis situation. If that plan costs around $10,000, it has already paid for itself in future productivity from that employee. Any time you can keep a good employee on staff, your organization is better for it. A recent study found that organizations replacing an employee can spend up to 60% of that person’s salary finding a replacement, with vacancies lasting approximately 42 days, that’s over a month of lost productivity.
But, sometimes an organization’s needs are more widespread. During the COVID-19 pandemic, some employers leaned on the EAP to help transition to a safe and effective work-from-home environment. Other employers relied on their EAP to help employees seek mental and financial assistance.
This is the true value of insurance: Even with low utilization, you can feel comforted knowing that this coverage is there when you need it.
