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Walton & Associates (E.U.) provides consultancy and advice to companies considering introducing E.A.P.s. or currently wishing to audit the quality of the counselling being provided. Having been involved in these programs since the early 1990's both as counsellor and marketing account manager for nearly all of the major service providers in the U.K. and North America, we can offer an unrivalled and unbiased independent insight into the merits and demerits of all the options on offer.
Currently in the U.K. only 7.5% of all employees are covered by such programs. By contrast in North America the figure is 32.5%. Ample evidence of their commercial worth!
Before embarking on commissioning or renewing an E.A.P. companies would be well advised from both a professional and a financial standpoint to obtain from us the most comprehensive overview of the options prior to selecting tenders. If a company has already commissioned an EAP from a Provider, Walton & Associates (E.U.) are able to offer comprehensive audits and assessments of the quality and calibre of the counselling skills and facilities being provided by the company contracted to supply such a service. All too often, to cut costs and attempt to be competitive, EAP companies sub-contract the essential counselling service used by employees to poorly qualified or inexperienced counsellors operating from inadequate premises, (frequently at home) paying below-market fees. We now offer Employers a new service: EAP Inspect (c) in which, following a successful pilot project with Right Corecare Management Consultants, we have created a protocol of inspection data enabling an accurate evaluation of the service being supplied by any EAP providing company. This facility is now operational NATIONWIDE! Contact us directly for an exposition of how this facility can protect your employees under the Health & Safety at Work legislation and save you money!
What Are E.A.P.s?
For information, here is an article from the North American perspective on what they are and how valuable companies there have found E.A.P.s.
In some cases, Employee Assistance Programs have saved firms millions of dollars by helping troubled workers learn to cope with personal problems.
More than 10% of all Canadian employees cannot keep their minds on their work. Deeply preoccupied with personal problems such as alcohol or drug abuse, marital conflict, aging parents or delinquent children, less than 65% of their thoughts and efforts are devoted to their jobs. As a result, they take more time off, have more accidents, use more sick benefits, and are late for work more often than their less-troubled peers.
The members of this worried group will change from year to year, but its overall numbers won't. At any given time, anywhere from 10% to 20% of a firm's staff will be suffering from too much personal stress unless intervention and preventative measures are taken. In many cases, a good Employee Assistance Program (EAP) is the most effective way of cutting the high corporate cost of personal stress. The cornerstone of any EAP is results-oriented, person to person counselling by trained professionals. In a surprisingly short time, their efforts can help most troubled employees find new alternatives and other resources to deal more effectively with their problems.
However, the longer the program is in place, the greater the benefits to the company. As employees get their lives back under control, absenteeism, lateness, and accidents will decline and their work will improve.
Employees with persistent personal problems often pay less attention to their surroundings, resulting in a higher rate of serious on-the-job accidents. This can have a significant impact on a long-term disability (LTD) plan.
For example, in one mid-sized company, 40 employees receive LTD benefits, which average about 70% of their salary. In most cases, these payments will be made for the rest of the employee's life. Therefore, the money to cover these benefits must be set aside in advance and held in trust by the insurer. As a result, millions of dollars that could have produced greater returns elsewhere are tied up to meet this long-term commitment.
This is why the plan's insurer raised the company's annual premium to $590,000. It also informed the firm that it would be dropped from the plan if there were any further increase in the number of beneficiaries.
In this case, 16 of the recipients were disabled due to poor mental health or because of substance abuse. If just half of these cases were prevented or rescued by EAP counselling before they went on LTD then the insurer would have reduced the total tied-up capital by $1,700,000. Company premiums would have been lower and it's unlikely that the question of cancelling the plan would ever have surfaced.
Tallying up the savings
EAPS have allowed companies in all manner of industries to realize substantial savings. General Motors of Canada Ltd. in Oshawa, Ont. studied 104 employees who used its EAP in 12 different plants. There was a 30% decrease in accidents and a 40% decline in the use of sick benefits from one year to the next. Further analysis during the same period revealed a 48% reduction in days lost to absenteeism after the first year of counselling and an additional decrease after the second year.
Toronto-based Imperial Oil Ltd. compared the records of 431 employees receiving EAP assistance and discovered a 2,155 day reduction in absenteeism among the group after it had begun using the service. The estimated net savings were $187,397. On a much smaller scale, Central Canadian Grocers Inc. of Toronto studied the attendance records of 24 employees who used EAP and found an average 7.8% decrease in lateness and a 11.7 day drop in absenteeism.
A large EAP provider, in partnership with two of their major clients, one in the high technology industry and one in the public sector, conducted a major audit and review of their EAPs. Fifty-four percent (54%) of the high technology EAP users reported that if they had not received counselling assistance through their EAP, their problems would have caused them to be away from work. Thirty-two percent (32%) of the public sector client responded similarly. When asked to estimate the number of days they would have been absent, both client populations that used EAP were strikingly similar in their responses they indicated an average of 3.3 days.
Warner Lambert Canada Inc. of Scarborough, Ont. is also convinced of the value of EAPs. It estimates that for every dollar spent on its program, $7 to $11 are saved on absenteeism, LTD and accident insurance premiums.
An international computer manufacturer with offices across Canada estimates that it costs $80,000 to hire each sales person.
Furthermore, it takes 2.5 years to break even on this investment. But if only two members of this sales force are assisted by an EAP in one year, then the service will have paid for itself. And assuming that 4% to 6% of the employees would take advantage of counselling if it were available, the savings would be much higher.
In 1984, Montreal-based The Royal Bank of Canada spent $280,000 on its EAP, and then estimated that it gained about $14 in productivity for every dollar spent on the program. And as early as 1982, Canadian National of Montreal discovered it was getting more than a 1,500% return on its EAP spending.
American companies report similar results. Detroit Edison Co. of Detroit, Mich. studied 67 employees who used the firm's EAP services. Their work histories were compared over two periods: the six months prior to counselling and the six months after their third EAP session. The group showed a 29% reduction in health insurance claims and a 41% decrease in accidents.
United Airlines' EAPs saw 466 clients in a one-year period. They report that for every dollar spent on the program they realized a return of $16.95 based on a number of indices including reduced absenteeism and reduced medical claims.
Equitable Life in studying the effectiveness of their EAP showed that the savings from increased productivity, based on reduction in employees' visits to doctors or clinics alone, was approximately $5.32 for each dollar spent on providing the EAP.
When Gates Rubber Co. of Denver found that EAP counselling cut the absenteeism rate of 23 employees by more than 50%, the company decided to take a more detailed survey. In one year, 162 Gates' employees used the EAP service. They had accumulated 4,104 hours of lost time in the 12 months following the counselling compared to 11,174 lost hours in the previous year.
The firm estimates its savings at $56,000. An added bonus was that over the same two-year period, visits to the firm's medical clinic by members of this group dropped from 321 to 184.
Gates Rubber also discovered that the corporate gains resulting from its EAP grew larger each year. Over one six-year period, there was a 300% increase in attendance and the use of the firm's medical clinic dropped by 200%. Equally important, there was a tenfold drop in the number of employees who were fired.
And Digital Equipment Corp. of Maynard, Mass. considered to have one of the finest EAPs in the U.S. took a different approach to assessing the effectiveness of its program. Its first venture began in 1974 and today 70,000 employees are covered including the computer manufacturer's Canadian workers. Bruce Davidson, corporate manager of the EAP, is quick to note that "each industry is different in tracking productivity and cost savings. What I find useful is how individual managers see differences in people who have participated in the EAP. It is confidential, but there are enough situations each year where employees who used the EAP have chosen to share their stories with their manager".
In these cases, adds Davidson, managers talk of the "dramatic shift in productivity, creativity, contribution and loyalty."
Calculating counselling benefits
Although there is no hard-and-fast formula for calculating the savings that a company would realize by offering EAP services, there are some steps that yield partial answers. First, take 10% of the total number of employees in your organization and multiply it by the average annual wage of all employees. Then, take 37.5% of the amount. The answer gives a rough indication of just how much employees' personal problems can cost a company each year. As an explanation, the 10% refers to the most conservative estimate of a company's employees who will be experiencing serious personal difficulties in any given year (evidenced by employees surveys, management reports and already established EAPs). The 37.5% refers to the most conservative estimate of an employee's performance fall-off and decrease when an employee is experiencing personal difficulties (determined by a number of different measures such as absenteeism, lateness, personal telephone calls, distractions, idle time, discussion of problems with co-workers/manager, sick days, and the like.)
Generally, about 3% to 6% of employees will make use of an EAP during the first year it is available. Approximately 4% to 6% will make use of it during the second and subsequent years. Very often usage of an EAP is a function of the level of frequency of promotion in an organization throughout the year. The more frequently the EAP services are highlighted to employees, the more likely usage will be stronger. In smaller organizations where EAP promotion is easier and where positive word about the counselling services gets around more easily, usage is generally stronger. Larger organizations face a greater challenge to maintain high visibility for the EAPs.
The effectiveness of short-term counselling techniques provided by an EAP is a function of the competence of the EAP professionals.
The successful EAP providers are effective at minimum in 90% of all cases. Thus, to get an idea of the potential first year EAP savings, take the most conservative usage rate at 4% of your employee population, multiply this figure by the annual average compensation which is then multiplied by 37.5% (the performance calculation). Finally this figure should be multiplied by 90% (the EAP effectiveness rate) to obtain the most conservative cost-saving estimate to your organization by having in place an effective EAP. From this amount should be deducted the cost of the EAP itself.To estimate probable savings in the following years, use the same calculations but be sure to deduct the cost of the EAP service for each successive year. When examining the results, it is important to remember that there is also a cumulative effect in these savings, as a successful EAP corrects problems in ways that help to prevent their reoccurrence
Getting it started and running
It should be remembered that an EAP can only provide a solid return on investment when it is operating at its peak potential. In order to maintain maximum savings, certain factors should be considered.
There should be support for the program at all levels throughout the organization, particularly at the managerial level. When an EAP is introduced, it should be explained in detail to all employees. Ideally, however, that's just the beginning as the organization should promote the service on an ongoing basis.
Secondly, the people providing the EAP must have outstanding qualifications. They should have proven abilities as human resource consultants in both clinical and workplace environments. Those with a demonstrated track record in such areas as organizational development, employee surveys, personnel selections systems, as well as training and development will have the greatest chance of ensuring an EAP's success.
EAP counsellors must also have a variety of experience. They should be able to conduct top-notch clinical assessments, including addiction assessments. Just as important is their understanding of the work environment, job performance issues and appraisal systems, as well as the fact that organizations need their employees to be at work and fully productive.
Perhaps the most important feature of an EAP is that all consultations are to be kept confidential. Few employees will use the service unless their problems and discussions are kept private. Any indication otherwise will kill the program. It is vital that the EAP professionals keep corporate interests at arms length. In many cases, this can easily be done if the EAP is located off premises, and the counselling services are contracted with a recognized EAP provider.
Keeping track of an EAP's effectiveness and success is still another responsibility facing EAP providers. Systematic contact by the EAP professionals with post-EAP users and statistical feedback to organizations will enable sponsors to judge the overall effectiveness of their program and its counselling techniques. The best EAPs include a program manager who manages the quality and customer service aspects of an EAP. This person is also responsible for maintaining contact with the organization's EAP representative or steering committee, and should provide management with an ongoing evaluation of the service performance.
The corporate benefits of Employee Assistance Programs can be stated in dollars and cents, pounds and pence but they also represent a humanitarian gesture, providing rewards that cannot be measured in monetary terms.
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