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Updated Apr 04, 2024

Benefits of an Employee Assistance Program (EAP)

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Skye Schooley, Senior Lead Analyst & Expert on Business Operations

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Your employees are the foundation of your company. They can make or break your success, which is why having an employee assistance program (EAP) that helps workers who are struggling with certain personal issues is good business. However, before you add an EAP to your employee benefits package, it’s important to understand what it entails, its advantages and how to properly implement one at your organization.

What is an employee assistance program (EAP)?

An EAP, as defined by the Society for Human Resource Management, is “a work-based intervention program designed to assist employees in resolving personal problems that may be adversely affecting the employee’s performance.” Notably, these programs are often open to not just employees but also other members of their households.

These are some of the common areas for which an EAP can support employees and their families:

  • Stress management: Work and finances are some of the top causes of employee stress. Stress management counseling can provide your team members with resources and techniques to cope with stress and minimize its consequences. [Find out how stress affects productivity.]
  • Domestic violence: Domestic violence resources can include counseling, legal advice and intervention.
  • Grief: Grief can be devastating to anyone. Having to work in the midst of it is often difficult. Grief counseling is one of the most reliable ways to help people through a hard time.
  • Alcoholism: Alcoholism has to be treated carefully and effectively, and EAPs are often better suited for guiding people to proper help than rendering it directly.
  • Crisis management: Crises happen, often out of the blue. Examples of crises include the loss of a house in a natural disaster, a devastating health diagnosis and other unexpected problems. Crisis management helps employees focus on what they can control and keeps them organized as they deal with the issue. Crisis management resources can help your team members get back on their feet more quickly and effectively.
  • Psychological (mental health) disorders: There are many health disorders that are not disabling. While they introduce challenges to a person’s life, many can be managed. An EAP can typically identify problems and refer workers to the right experts to get the specialized help they need.
  • Substance abuse: Substance abuse issues are managed much like alcoholism. When a problem is identified, EAP resources can help get the affected staffer to a qualified professional or into a program that has a good chance of providing long-term help.
  • Health and caregiving: Health and caregiving experts provide advice for employees who are in a situation that requires them to provide immediate care to another. This training can prepare the person to care for an elderly family member or someone with disabilities.
  • Family services: Family services center around child care and family planning. EAPs can offer advice for organizing resources, time and ideas to foster a better home situation. These services can include assistance in finding and financing expert child care, planning family or medical leave, and budgeting for a growing family.
  • Counseling needs: EAPs are limited programs. Ultimately, they’re best for directing employees toward long-term solutions. For many issues under the purview of an EAP, counseling referrals are the long-term solution with the best prospect for providing meaningful aid.
Did You Know?Did you know

As EAPs have continued to evolve, some employers offer extended coverage that may include support for financial challenges, family issues, workplace violence, elder care and child care issues. This assistance is available to eligible employees and their family members.

Michael Roche, co-founder and head of recruitment at Educating Abroad, has more than 10 years of recruitment and HR management experience, including in managing and implementing new initiatives. He said an EAP can provide a wide range of assistance types to your employees, including discount vouchers for counseling and support for those affected by alcoholism and substance abuse.

“It is advisable to identify what is actually important to your employees rather than just guessing,” Roche said. “You will find a lot more uptake in the benefit, which should result in improved productivity or morale within the business — the main goals of an EAP.”

What are the benefits of an EAP?

What is an EAP

One reason EAPs are popular is because they benefit both employees and employers. Healthy and happy employees are more productive and engaged in both their company and individual jobs, which is great for a business’s bottom line. Here are some of the top ways an EAP can benefit your organization:

  • It increases business productivity. It’s in employers’ best interests to have employees who are mentally and physically healthy. When employees are healthy, they have more opportunities to be engaged with their work, and engaged employees tend to have better work performance.
TipBottom line

If you need help managing employees’ performance, check out our review of BambooHR to see how this HR software can help.

  • It reduces employee absenteeism. Highly engaged business units that take advantage of EAPs tend to see a reduction in employee absenteeism. When employees are healthy and have easy access to resources that improve their well-being, they take fewer sick days. They also may be more likely to arrive at work on time, since they won’t be delayed by physical or mental blocks.  
  • It boosts employee retention. EAPs support your employees’ health and well-being so they can focus on work, which, in turn, can improve employee engagement and job satisfaction and thus boost your employee retention rates. Maintaining a high retention rate is crucial to your bottom line, as the cost of replacing an individual staff member can range from one-half to two times the employee’s annual salary.
Key TakeawayKey takeaway

Learn how to calculate your employee turnover rate to see how well your organization is doing with employee retention.

  • It improves employee safety. According to the S. Bureau of Labor Statistics, private industry employers reported 2.8 million nonfatal workplace injuries and illnesses in 2022, up 7.5 percent from 2021. Over the 2021-2022 period, there were 2.2 million cases involving days away, adding up to millions of hours of lost productivity. Injuries result from a variety of factors, such as repetitive stress and accidents. Although you can’t prevent every ailment or incident, an EAP can help ensure your employees are taking care of their physical and mental health, putting them in the best position to be safe and careful at work.
  • It saves you time and money. When employee safety goes up, the number of workplace injuries and illnesses goes down. EAPs can help reduce the number of disability claims, labor disputes, health insurance claims and workers’ compensation claims your business faces. This can save you a lot of time and money that you would otherwise be spending on these issues.
  • It aids employees personally and professionally. Even if a problem isn’t directly related to an employee’s job, they and their family members can still receive valuable support from an EAP. EAPs give employees convenient access to a 24/7 hotline and direct access to experts who can provide help for domestic and financial matters. With this support for personal issues, employees who have EAPs in their benefits packages are likely to trust that their employers care about them and their well-being both inside and outside the workplace, which can engender loyalty.

graphic of a person writing on an oversized confidentiality agreements

How does an EAP work, and what does it offer?

An EAP is set up by the employer (and possibly an external vendor, if the program is outsourced; see below) and is free for employees to use. While they can take advantage of the benefit if they like, participation in an EAP can’t be mandated by employers and is entirely voluntary. Employers do, however, pay for these programs, and staff usage is highly encouraged. The business cost of an EAP varies, but it typically ranges from $10 to $100 per employee per year.

When an employee or their family needs to use the EAP’s services, they simply contact their company’s in-house EAP team or the external provider via the information provided by their organization’s HR team. An EAP specialist will assess their needs and then direct them to the best resource. Employees should rest assured that the information they share will remain confidential. Employers are not privy to data on which employees use the program or how often they do so. They can receive reports showing that the program is being used, but they won’t know who is doing so.

Requirements for an EAP

When offering an EAP to your employees, you should follow these requirements:

  • Written confidentiality policies: To ensure the use of the program remains confidential for all employees, employers must create and implement a written confidentiality policy.
  • Employee training: Company leaders and HR employees need to be trained on the program’s policies, including the formal procedures for monitoring the program and following up with employees who request assistance. Training also needs to include how employers and managers can recognize issues so they can appropriately direct employees to the EAP. As services and employee needs evolve, it’s essential to ensure that staffers update their skills pertaining to the EAP.
  • Scope and limitations of services policy: It’s recommended that every company offering an EAP have a written policy that covers the program’s relationship to the organization and the scope and limitations of the services. This policy aims to get all parties on the same page as to how the program works and how it should be used.
  • Advisory process: The advisory process ensures the employer and key staff are represented. The advisory board should reflect the diversity of your employee base as much as possible.  
  • Flexibility: As employees’ needs change, the EAP should be able to accommodate them by adding relevant services.
  • 24/7 crisis intervention services: One of the benefits of an EAP is that employees can access it 24/7, so employers need to make sure that this service is in place and that team members know how to use it.
  • Short-term problem resolution procedures: There may be situations in which employees need resolutions to short-term problems. The EAP needs to have protocols dictating resolution procedures, including when an employee must be referred to a resource outside the EAP.
  • Account management: For internal programs, a qualified staff member needs to be assigned to manage the program. This designated staffer must be trained accordingly and respond to employee needs.
  • Legal and regulatory compliance: Because a standard service offering of an EAP is mental health support, employers must adhere to legal and regulatory compliance regarding healthcare. It’s also good practice for employers to understand other legal considerations involved with offering and maintaining an EAP to ensure they adhere to all compliance protocols.
TipBottom line

When handling situations and initiatives that require legal considerations, it can be beneficial to hire and consult an attorney to ensure compliance.

  • Policy development: You must establish a policy that outlines the program’s intention ​​— for example, it provides confidential and voluntary assistance to employees and their families. Think of this policy as a mission statement for the EAP.
  • Services that cater to all applicable languages and cultures: The services an EAP provides can’t have a language barrier or discriminate against cultures. Services must be sensitive to each employee’s language and culture. Along with these services, any materials you use to promote the EAP should be understandable to all employees.
  • Different ways to access services: While phone counseling tends to be the most popular option, it should not be the only way services are provided.
  • Custom data reporting: These reports offer employers important information about the program, such as if any employees threatened to harm themselves or someone else and how many employees are using the program. Customized data reporting can also track patterns and trends in usage. The data on the reports remains confidential and cannot be traced back to any specific employee. [Learn about HR reporting.]

How to offer an EAP to employees

There are three main ways to offer an employee assistance program: in-house, outsourced or blended. For smaller companies that don’t have the resources to host an EAP in-house, outsourcing is recommended.

In-house EAP

Like its name suggests, an in-house EAP means qualified employees at your company manage the program and offer its services on-site. It’s the job of an in-house EAP professional to provide employees with direct services or referral resources.

An in-house program can feel intimidating to employees who may be embarrassed to ask for help, worry that their information will not be kept confidential and feel uncomfortable seeing these co-workers around the office. As a result, in-house services often don’t get as much use as external programs do.

Outsourced EAP

Employees can access an external EAP by calling a toll-free phone number connected to your chosen EAP vendor. An EAP specialist answers calls and asks employees a few questions to verify their employer and location, and then finds out what the employee needs support for so the specialist can recommend the best resources.

Blended EAP

Through a blended program, employees have the option to seek assistance in-house or via the third-party provider. A blended program is not recommended for small businesses with limited resources.

How an EAP is implemented

According to Roche, these are the main steps for implementing an EAP:

  1. Determine your budget. Identify and confirm the budget for the new program. Figure this out by calculating and totaling the per-employee fee to better understand how much you may need to spend versus what you are prepared to spend.
  2. Identify your needs. Figure out which services your employees would benefit from.
  3. Choose a provider. If you’re outsourcing, choose an EAP provider. As you consider different vendors, make sure to check their service-level agreements, as these vary considerably. Also, ask fellow business owners and HR professionals who use EAPs which providers have been good for them. Alternatively, hire a specialist to run your EAP in-house.
  4. Promote it. Use the time between choosing your EAP provider and launching the program to announce and promote this new benefit to employees.
  5. Train staff. Ensure that key HR personnel, company managers and department heads have been trained on how the program works so it runs smoothly when unveiled.
  6. Launch it. Consider launching the new benefit at a special event, such as a company gala, team retreat or end-of-year party.
  7. Maintain it. Periodically review your EAP and how employees are using it. Solicit feedback from team members.

“You could use the fact-finding part of what your employees want from such a service as the start of the promotion of the new employee benefit [that] is soon to become available,” Roche said. “Think of it like the release of a new mobile phone when they tease features before a launch.”

Ways to promote an EAP

No one benefits from an EAP if your employees don’t know about it. While top HR software providers offer these programs, it’s your job to ensure your team members are taking advantage of it. In addition to launching the program at a company event as Roche suggested, here are some other ways to promote this benefit:

  • Hang up posters around the office, especially in the break room.
  • Post information on your company’s intranet.
  • Send company-wide emails.
  • Mail postcards to employees’ families.
  • Make an announcement at quarterly employee meetings.
  • Write about it in employee newsletters. 

Marissa Sanfilippo contributed to this article. The source interview was conducted for a previous version of this article. 

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Skye Schooley, Senior Lead Analyst & Expert on Business Operations
Skye Schooley is a human resources writer at business.com and Business News Daily, where she has researched and written more than 300 articles on HR-focused topics including human resources operations, management leadership, and HR technology. In addition to researching and analyzing products and services that help business owners run a smoother human resources department, such as HR software, PEOs, HROs, employee monitoring software and time and attendance systems, Skye investigates and writes on topics aimed at building better professional culture, like protecting employee privacy, managing human capital, improving communication, and fostering workplace diversity and culture.
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