Expanded EAPs Lend a Hand to Employers Bottom Lines

By Gina Ruiz

Jan. 20, 2006

When Ford Motor Co. launched its employee assistance program in 1976, its primary objective was straightforward: combating alcohol abuse in the workplace. The company, aware that some 40 percent of industrial fatalities are linked to substance abuse, joined forces with the United Auto Workers to introduce the incentive.

    The EAP was very basic, modeled after a traditional Alcoholics Anonymous 12-step program to treat substance abuse.

    Leap forward 30 years, and Ford’s EAP is virtually unrecognizable. The core mission–helping workers improve their lives and retain employment–remains firmly intact, but the support that employees receive is much more sophisticated and comprehensive, says Tom Kindree, Ford’s human resource associate of labor affairs.

    Today, most of the company’s 122,877 workers in North America can access support for a wide spectrum of issues–ranging from finding day care for children to planning for the purchase of a new home.

    Like Ford, many large companies are giving their EAPs significant makeovers–going far beyond treating alcohol abuse and into helping employees cope with other burgeoning pressures, such as caring for elderly parents, which is swiftly becoming one of the most sought-after EAP benefits.

    The role of EAP providers is also changing. Many companies are recognizing the value of involving them in tactical matters, such as the workforce side of mergers and acquisitions or corporate restructuring. The strategic importance of having a healthy workforce cannot be understated, says Dr. Jeffrey P. Kahn, CEO of WorkPsych Associates and clinical associate professor of psychiatry at Cornell University’s Weill Medical College in Manhattan.

    The combined indirect financial toll that depression and anxiety have on businesses is estimated to be $146.2 billion per year. Meanwhile, stress-related physical and mental illnesses can cost companies as much as $7,500 per worker in absenteeism and lowered productivity each year, according to the Department of Labor. Even long-standing workplace issues like substance abuse continue to wreak havoc. Employees who use drugs take three times as many sick days as other workers and are five times more likely to file a workers’ compensation claim, putting further strain on already exorbitant costs of providing health care benefits, the National Institute on Drug Abuse reports.

    The role that EAPs play in attenuating these potentially disruptive issues is difficult to assess because companies zealously guard results of their programs from the public eye. EAP pro­viders, however, contend that their services are a critical component in lowering the cost of health care and in bolstering productivity. EAPs can reduce absenteeism and tardiness by 10 percent and potentially boost productivity by as much as 25 percent, says Dr. John Maynard, CEO at the Employee Assistance Program Association, a trade organization.

    Companies are investing in these programs because they are seeing some results. “Ford’s program pays dividends not only in terms of doing something that is good for our workers but also in maintaining solid productivity rates,” Kindree says.

Changing with the times
    The increasing popularity of EAPs has heightened expectations for more innovative, multitiered support. Tools for helping employees handle legal and financial affairs, considered cutting-edge just a few years ago, are no longer enough to keep clients satisfied, says Bill Bowler, senior vice president of client services at Employee Services Inc., an EAP provider in Wellsville, New York.

    One way in which EAP providers are stepping up to this challenge is by launching more sophisticated online tools, such as chat rooms, Web demos, videos and, in some cases, even coaching. Another unfolding trend is to integrate EAP services with work and life programs, creating a one-stop solution for helping workers cope with complex personal matters.

    But the biggest movement in the EAP arena today is the shift toward designing services that help employees manage senior care. SEI, which serves 850,000 employees from a diverse pool of large and small-sized companies, now ranks senior care issues as its third most frequent type of consultation–trailing behind marital problems, the most prevalent consultation, and substance abuse. This is a huge leap, considering that senior care was ranked 17th just two years ago. And given the graying of America, this trend will likely continue for many years to come.

    “One of the biggest challenges for employers over the next 10 to 15 years will be handling the issues associated with the aging baby boomers,” says Richard Chaifetz, chairman and CEO of Chicago-based ComPsych Corp. EAP providers are responding to demand by launching services aimed at an aging workforce.

    SEI and ComPsych both provide support relating to senior care, ranging from nutritional advice to helping secure reliable supervision. Ceridian has launched a Web-based counseling and training tool, Medicare Interactive, which was created for employee caregivers and mature workers to enhance their understanding of Medicare coverage and eligibility. “EAPs reflect what is happening in society,” says Katie Borkowski, professional services director at the Employee Assistance Program Association.

    In addition to devising novel, innovative support tools for workers, EAP pro­viders are increasingly lending a strategic helping hand to companies. They often provide workforce-related guidance on tactical matters, including mer­gers and acquisitions, company restructurings and even coping with disasters like Hurricane Katrina.

    Beckman Coulter, a manufacturer of biomedical testing tools and systems in Fullerton, California, is relying on its EAP provider to aid with its ongoing restructuring plan. One of the first steps that the company took to help employees affected by the first round of layoffs was to send EAP counselors to key sites.

    “Going through a restructuring pro­cess can be very traumatizing,” says Cathy Bailey, benefits consultant at Beckman Coulter. Going forward, the 7,400 employees who are covered by the EAP will have ongoing access to counseling services, both online and in person.

Some hurdles remain
    In spite of their popularity and increased visibility, EAPs are up against some major challenges. Usage rates hover around 5 percent to 7 percent, Borkowski says. The programs aren’t meant to have 100 percent or even 80 percent usage rates, but these figures are nevertheless low and could indicate that many workers are not taking full advantage of the benefit.

    One explanation for the low usage may be that EAPs are having a tough time shedding their image as a program for treating alcohol abuse. “Some workers may think, ‘I don’t have a drinking problem, so I won’t attend the EAP meeting,’ ” Bowler says. Another reason for low usage rates could be lack of awareness of services. EAP programs can get lost in the clutter of what are often intricate benefits packages.

    Bowler suggests making EAP information meetings mandatory for employees, both to dispel myths about the nature of the programs and to raise awareness about their existence. But even when EAP benefits enjoy a high level of understanding and awareness, there are other hurdles.

    Geriann Shaw, human resource benefits manager at Atmel Corp., a maker of advanced semiconductors in San Jose, California, is not concerned about usage rates at her company. They are five times the national average. She is, however, puzzled over how the EAP is being used. The program, which covers 2,500 workers, has much lower usage among minorities than Caucasians.

    Atmel’s usage patterns are anything but unusual, as research indicates that minorities generally are less likely to use these programs. African Americans and other minorities tend to shy away from seeking help because of social stigmas, Maynard says.

Reaching workers
    There are great incentives for employers to improve usage rates of EAP services. Besides being a good device for improving employee retention and recruiting new hires, EAPs offer a highly visible tool for promoting goodwill in the workforce–at an average annual cost of only $18 to $30 per employee.

    That’s why companies are going to great lengths to enhance understanding and awareness of EAPs. Ford, for example, changed the name of its EAP benefits to “employee support services program.” Not only is the new name free of any negative connotations, but it also denotes the comprehensive nature and complexity of the benefit.

    Giant Industries, a marketer and refiner of oil products, is introducing its EAP this month. The Scottsdale, Arizona, company is raising awareness about the new program through its annual benefits meetings and is distributing written material to educate the 1,700 workers about the new service, says Delbert Tingey, director of benefits management. The company also is training management to learn how to use the program and disperse information to its workers.

    The key is to maintain an ongoing dialogue with workers and to educate them on the services that are available to them, Ford’s Kindree says. Ford believes its enhanced EAP benefits are not only key in attracting talent, but are also beneficial in achieving employee satisfaction and retention. “Workers will bring issues from their home when they walk through the doors,” he says. “Our goal is to help them resolve their issues because if we let them fester, productivity will undoubtedly take a hit.”

Workforce Management, January 16, 2006, pp. 46-47Subscribe Now!

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