EAP 101

Why Offer An EAP?

It’s A Proactive Business Tool

When employees get sick, you expect them to visit their doctors — and you probably provide insurance for that purpose. On the other hand, when your employees are facing emotional, relationship, family, legal or financial problems, what do you do?

A well-designed Employee Assistance Program (EAP) is a proactive business tool that can help your employees face and overcome life’s challenges — while at the same time reducing absenteeism, increasing retention, saving money, controlling costs, and increasing employee productivity.

At Midwest EAP Solutions, we also make in-depth behavioral expertise available to your organization’s management and line supervisors in order to help you strengthen your leadership, enhance your work environment and grow your business.

Quantifying the Value

In a study on personal and work outcomes, at companies where EAP services were provided work loss was avoided 60% of the time, with an average savings of 17 hours per case. And, 72% of these cases showed improved work productivity with an average gain of 43%.

EAPs Help Reduce Costs & Improve Lives

Left undiagnosed and untreated, mental illness has a significant negative impact on workplace productivity. Here are just a few of the statistics:

  • The Journal of the American Medical Association (JAMA) estimates that as many as 8.4 hours are lost per employee per week as a result of major depression. That's 26 lost work days per year, versus 17 days for cancer. When depression is effectively treated, absenteeism is reduced 12 days per year.
  • Mental illness, the same research shows, is the No. 1 illness causing disability in the United States.
  • Over the past decade, there has been a 300% increase in mental health Social Security disability claims, the Work Loss Data Institute estimates.
  • JAMA estimates that 9.4% of the U.S. workforce suffers from some type of depressive disorder, and that upward of 69% of people may not even realize they're depressed.
  • The cost of depression is estimated at $344 billion annually due to lost productivity and medical fees, according to research from Risk and Insurance magazine. Often the most difficult step in managing depression is actually getting in to see a doctor.

EAPs can play a critical role in helping families cope with mental health issues, by providing employees and their families a readily accessible, confidential, no-cost professional support system.

According to research from the Department of Health and Human Resources, companies with EAPs in place have, on average, 21% lower rates of absenteeism and 14% higher productivity rates.

A Hartford Group study showed that those with psychiatric concerns returned to work an average of 17 days sooner than those who did not use an EAP. The employees were also twice as likely to return to the workforce.

The same study showed significant cost savings associated with disability claims. Only 2% of employees using the EAP had a disability claim that converted to long-term disability (LTD) benefits, whereas 9% of those who did not use the EAP used LTD benefits.

A study presented at the American Psychological Society Conference demonstrated that when legal/financial and work/life services are provided, work loss was avoided in 39% of the cases and work productivity was improved in 36% of the cases.

In a landmark study, the Northwestern National Life Insurance Company noted, “Providing an Employee Assistance Program is one of the top ten actions an organization can take to reduce the potential for workplace violence.”

EAP Case Studies

In “The EAP Buyer’s Guide,” created for the Employee Assistance Professionals Association, Donald G. Jorgensen, PhD, CEAP, describes how EAPs have demonstrated their effectiveness at the following companies:

  • Chevron has recognized savings of $50,000 per case from reduced turnover due to EAP use. Chevron also reported, “Employee performance improved 50% following a supervisor referral to the EAP.”
  • An Abbott Laboratories study reported a 6-to-1 return on dollars spent for the EAP, and noted that the average employee who utilized the EAP spent $10,000 less for inpatient medical costs than employees who didn’t use EAP services over a three-year period.
  • Virginia Power reported a 23% reduction in medical costs for employees using the EAP.
  • Campbell Soup Company saved 28% in mental health costs using its EAP.

At Caterpillar Inc., the company’s use of intensive case management and EAP intervention:

  • Reduced the number of psychiatric disability cases by 29%,
  • Reduced the proportion of disability cases for psychiatric conditions from 33% to 8.1% (management employees).
  • Reduced the average lost work time for psychiatric disability 44% — from 58 to 32.6 days per case.
  • Caterpillar’s total projected cost savings in 18 months equated to $3,575,349.

For more information on EAPs and their benefits, go to Resources & News.