Employee assistance programs (EAPs) are plans that help identify and resolve issues facing troubled employees through short-term counseling, referrals to specialized professionals or organizations, and follow-up services. Many EAPs also train business owners and supervisors to recognize and deal with behavioral problems in the workforce. These programs are not designed to provide long-term treatment, but as Business Week noted, "they do offer a safe environment where an employee can discuss problems with a counselor who then makes a confidential assessment, and if necessary, gives a referral to a mental-health professional." Indeed, business experts regard them as a potentially valuable tool in reversing declining performance among valued workers. "We're not talking here about employees who turn violent or hear voices," said Business Week. "The people a business owner needs to worry about are the … valued workers whose productivity suddenly and mysteriously plummets. From depression to anxiety, from drug abuse to alcohol addiction, common psychiatric disorders take a remarkable, if little-discussed, toll. In lost productivity and absenteeism alone, the cost of business approaches $312 billion annually."

Given these sobering statistics regarding the impact of emotional disorders on business productivity, employee assistance programs have become an increasingly popular element of total benefits packages for small and large employers alike. In fact, by the late 1990s, an estimated 20,000 EAP providers were in operation in the United States, according to the Employee Assistance Progressional Association. First created in response to business concerns about the impact of employee alcohol and drug abuse on bottom-line productivity, employee assistance programs are now designed to deal with a wide range of issues confronting workers today. Modern EAP systems are designed to help workers with other problems as well, such as family and/or marriage counseling, depression, stress, gambling addiction, financial difficulties, crisis planning, illness among family or co-workers, and pre-retirement planning. Many EAPs have also expanded the scope of their counseling to help workers grapple with eldercare issues, natural disasters, and workplace violence. In addition, many employee assistance programs have added proactive elements to their offerings. For example, a number of employee assistance programs have actively promoted AIDS/HIV workplace policies and education efforts.

This expansion in the scope of EAP counseling is commonly attributed to changes in America's larger social fabric. "The prevalence of two-wage-earner families, single parent households, mobility and career change patterns, demographic shifts, and technological change have helped to create new and different types of stress and mental health crises, which affect the health and productivity of many employees," wrote Jody Osterweil in Pension World. "Where individuals formerly sought advice and counsel from a respected cleric, a personal physician, a close family member or a friend, those relationships are increasingly rare and cannot fulfill individuals' needs for crisis intervention. Thus, individuals experiencing a personal or family crisis, or who are under chronic stress, may have no place to turn for advice other than to the benefits (the EAP) offered through their workplace."

In addition, companies have come to realize that a direct link can often be detected between employee well-being and employee productivity, and that the difference in value between happy and unhappy employees can often be quite profound. This is especially true if the troubled person is a manager or supervisor with important responsibilities. In addition, erratic behavior from one employee typically has a ripple effect, producing anxiety and lost efficiency in numerous other employees who have to deal with the troubled individual on a regular basis. "Despite continuing technological advances, today's companies rely on their employees to improve productivity and increase the bottom line," wrote Brian W. Gill in American Printer. "Therefore, the relationship between employees' well-being and productivity cannot be ignored. Personal and work-related problems may manifest themselves in poor job performance, which adversely affects the firm's overall productivity." Indeed, consultants contend that few staffers are able to wholly shield their work performance from the negative residue of personal difficulties. Increased absenteeism, higher accident rates, substandard performance on previously mastered tasks, employee theft, and poor morale are just some of the symptoms that may appear if an employee is struggling to handle a problem in his or her personal or professional life.

The growing popularity of EAPs is also attributed in part to the increased affordability of the plans. During the mid-1990s, smaller companies with limited resources saw their EAP options expand to include affordable programs sponsored by insurance companies, national corporations, and local independent providers. As a result, the federal Substance Abuse and Mental Health Services Administration estimated that more than a quarter of companies with fewer than 25 employees were offering EAP plans by 1997. Moreover, federal guidelines issued in 1997 on business treatment of employees with psychological disorders under the Americans with Disabilities Act (ADA) further heightened interest in this area. Analysts believe that this growth would be even greater but for the steadily declining amount of coverage that insurers have been willing to provide for mental health during the 1990s.


Perceived costs associated with implementation and maintenance of employee assistance programs looms as the biggest concern for most small business owners. Many owners of small businesses recognize that EAPs can be helpful to the members of their work force, but the specter of yet another operating expenditure may dissuade them. But analysts say that small business owners can institute an employee assistance program for their employees at relatively small expense. Monthly fees for legitimate EAP providers typically range from $2 to $6 per employee, according to some estimates.

Benefits experts and businesses alike cite several important benefits associated with employee assistance programs. Business owners are, of course, concerned with the utility of an EAP as a cost-management tool. To an entrepreneur with a small business, the most important advantage associated with an EAP is likely to be its positive impact on employee productivity and its use in controlling health care costs. But according to many businesses that have adopted employee assistance programs, there are other benefits that may accrue as well. For example, companies that provide for an EAP may be viewed as more employee-supportive in the community in which they operate than will competitors for workers who do not provide such a program. In addition, employee assistance programs have been cited as an effective element in employee retention efforts designed at reducing turnover.

But a less remarked on advantage associated with EAP implementation is that it frees up the company to do what it does best—provide its goods or services to its customers—instead of devoting work time to issues that may not be directly related to meeting production deadlines, etc. Basically, putting together an EAP allows business owners and managers to concentrate on their internal operations. "We have to focus on the job and the ability to do the job," one business executive told the Pittsburgh Business Times. "We don't want to play counselor and dive into areas we're not qualified for."


The characteristics and quality of EAP programs can vary considerably, so small business owners should undertake a careful study of their options before selecting a plan. Factors to consider when comparing programs include:

Appropriate qualifications. The EAP you select for your company should be operated by professionally licensed staff with established relations with local health groups and/or national self-help organizations. They should also be engaged in continuing education initiatives. Check their affiliations and level of EAP experience when reviewing their program.

Find out about cost structure. Roberta Reynes noted in Nation's Business that costs can vary considerably from program to program, depending on operation structure, types and extent of services provided, and method of calculating charges. Benefits experts also recommend that small business owners make sure that materials and administration costs incurred by EAP providers are included in their base fee. National services tend to offer more affordable programs that local providers, but this is by no means always the case.

Extent of training services. EAP training programs vary widely in scope and subject matter. The most comprehensive plans provide managers with assistance in confronting troubled employees, developing wellness policies, and arranging seminars on health issues.

Convenience and responsiveness. Business owners should seek out EAP providers with facilities that are in the same geographic region as the company, so that employees can visit the facilities before, during, or after work. The EAP that is ultimately selected should also have a toll-free telephone line that is operational around the clock, since difficulties do not always strike employees during traditional working hours. In addition, business owners should inquire about the program's response time to employee inquiries in nonemergency situations (a wait of more than three days is a warning sign that the program has problems with its central mandate: helping troubled employees).

Communication. "Most providers issue monthly updates," said Carney. "But they should also record their own effectiveness in helping you reach agreed-upon productivity goals or implement safety programs. Some providers also supply payroll stuffers on subjects like practical parenting."


Training of managers and other supervisory personnel (including the owner, if he or she is actively involved in supervision) is a vital component of instituting a successful EAP. "Managers who have the most contact with employees will be the first line of defense in recognizing potential problems and correcting them before they reach the termination stage," stated Gill. "Therefore, it is imperative that managers understand the objectives of the EAP to ensure the program's success and reduce any potential employer liability." In addition, management personnel have to be adequately instructed about what Gill termed "the do's and don'ts of EAPs. They can refer employees to the assistance program, but no one can be forced to seek assistance. Supervisors and employees must understand that these services are strictly confidential and using them will not be cause for disciplinary action. However, being involved in an EAP service does not exempt employees from disciplinary action when company rules are violated. This is a very fine line that must be addressed in supervisory training."

Promotion of the program is another important element for small businesses seeking to maximize the effectiveness of their EAP. "All too often, plan sponsors assume that employees are fully cognizant of the EAP and the services it offers," stated Osterweil. "Employees and dependents must become more aware of the programs' existence, the nature of its resources and coverages, and the means of accessing such programs. Employees must develop confidence in the abilities of those providing such services, trust that confidentiality will be assured, and obtain knowledge that their specific needs can be addressed through the resources available from the EAP. Simply publishing an '800' telephone number in a summary plan description, or posting a notice in the workplace, is not likely to effectively communicate the existence of this valuable resource."

Osterweil noted, though, that a coordinated approach that is non-threatening in tone and that indicates that "the sponsor truly desires to meaningfully assist and retain employees and sees them as a valuable resource" can help significantly in reassuring employees about the program's character and purpose. For that reason, benefits experts counsel small businesses to establish a plan in which workers are provided with regular, timely (around the holidays, for instance) reminders of the availability and offerings of their employee assistance program, including assurances that the program is confidential and free.


Once an employee assistance program has been put in place, it is up to the sponsor to make certain that it is an effective addition to their overall benefits package. After all, an EAP that does not address the primary needs and concerns of a company's employees is essentially a waste of money. Admittedly, determining the effectiveness of an employee assistance program can sometimes be a difficult task, since employee problems like family strife, substance abuse, and workplace stress are impossible to quantify. For example, an EAP provider will not be able to provide statistics to a client stating that over the previous six months, workplace stress dropped by 27 percent and family strife declined by 14 percent. In addition, the confidentiality restrictions associated with employee assistance programs place further limitations on tracking EAP use and effectiveness.

Small business owners looking for information on the effectiveness of their EAP do have other options, however. "Attention to trends in utilization and expenditures by type of service (such as in-or out-patient detoxification, rehabilitation, and aftercare) can help plan sponsors evaluate the cost-effectiveness of their EAP and the efficacy of the vendors providing these services," said Osterweil. "For example, a successful EAP should show a positive influence on expenditures under the employer's health plan. It should also show towards lessening absenteeism, tardiness, and disability and improving productivity. And, the evaluation process gives plan sponsors an opportunity to design a system that can capture data that will more readily assess the ongoing cost-effectiveness of the program."

Benefits experts also encourage sponsors of employment assistance programs to look at their EAP within the overall context of its total benefits structure. Pension World pointed out that in many instances, employee assistance programs are regarded by workers as being "peripherally attached to the rest of the employee benefits package. This is certainly understandable as the need for employee confidentiality must be preserved, so that a certain degree of arms-length delivery of services is desirable. Because of privacy issues, EAPS may be managed by professional, outside vendors, with services provided at sites away from the workplace." But as much as possible, company sponsors of EAPs should try to integrate their programs with their other efforts to promote wellness for employees and their dependents.

SIGNS OF A FLAWED EMPLOYEE ASSISTANCE PROGRAM Employee assistance programs are commonly touted as a valuable cost-management tool, but if the implementation or design of an EAP is flawed, then the purported cost savings of the program will not be realized. Benefits experts counsel small business owners to look out for the following indications that an employee assistance program may need revision:

All of these warning signs can be addressed, but companies should make sure that they conduct adequate research into the needs and desires of their employees before attempting any sort of shake-up. And when revision of an EAP does occur, employers should take every precaution to ensure that any employees who did benefit from the program's previous incarnation are not left behind.


Carney, Karen E. "Choosing an EAP." Inc. July 1994.

"Does Counseling Work?" Small Business Reports. June 1992.

Gill, Brian W. "Employee Assistance Programs." American Printer. June 1997.

Haskins, Sharon A., and Brian H. Kleiner. "Employee Assistance Programs Take New Directions." HR Focus, January 1994.

Herlihy, Patricia. "Employee Assistance Programs and Work/Family Programs: Obstacles and Opportunities for Organizational Integration." Compensation & Benefits Management. Spring 1997.

"It's Your Problem Too." Business Week. February 28, 2000.

Osterweil, Jody. "Evaluating and Revising EAPs." Pension World. June 1991.

Reynes, Roberta. "Programs that Aid Troubled Workers." Nation's Business. June 1998.

Sanders, Philip. "How to Get the Best from an EAP." People Management. October 12, 2000.

Spragins, Ellyn E. "Dry Shoulder for Hire." Inc. December 1991.

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