Employee assistance programmes: the business case

What are the reasons for introducing an employee assistance programme (EAP) and how good is the evidence in support of them? This part of the IRS report on EAPs provides the answers. 

On this page:
Introduction
An overview of the business case
The evidence
The results of five investigations
Employer liability and EAPs: the changing legal position
Checklist 1: The business case for EAPs
Employee assistance programmes: the main IRS report. 

. .

Key points

  • There are many arguments why employers should provide an EAP. However, there are gaps and shortcomings in the evidence to back them up.
  • The main elements of the business case for EAPs are accompanied by some research evidence, although this is open to challenge. These include improvements in absence, stress levels and performance, and cooperation with change at work.
  • One of the most forceful arguments for providing EAPs involved the protection they offered from liability in stress compensation claims. However, a February 2007 judgment has substantially undermined it.
  • Information about employers’ current practice in using EAPs can be found in Employee assistance programmes: the IRS report.

Introduction

Employee assistance programmes (EAPs) have become much more popular in recent years in the UK, as noted in Employee assistance programmes: the IRS report.

Our main report examines the current prevalence of EAPs and the services they typically offer. It also provides information on their use by employees and the costs to employers of providing them.

In this part of our report, however, we turn to the crucial issue of the cost-effectiveness of EAPs.

IRS's research into EAPs, which we report here and in the accompanying Employee assistance programmes: the IRS report, shows high levels of satisfaction with them. But the actual hard evidence for the efficacy of EAPs is often tentative and sometimes disputed.

An overview of the business case

The business case for introducing or continuing to fund an employee assistance programme (EAP) is easy to outline (see checklist 1). However, it is much harder to support these arguments with firm evidence.

EAPs are hybrid services. They are partly clinical – where provable outcomes are possible – and are partly "soft" HR, where their impact is very difficult to quantify.

HR practices are notoriously challenging to measure in terms of their impact on individuals and their employers. There are too many other factors to take into account to be able to state with certainty that one particular process or service, such as an EAP, can be credited with any change that takes place in individuals' or groups' behaviour.

This explains why almost all the evidence about the effectiveness of EAPs relies on their clinical services, such as the use of counselling to help improve mental health.

It is very easy to compile a list of arguments in favour of EAPs. Many EAP providers set them out, as do HR and occupational health textbooks. Surveys also obtain feedback on the reasons why employers have introduced an EAP, but it does not necessarily follow that these organisations are actually enjoying the hoped-for benefits.

Checklist 1 provides a list of 21 arguments why an employer should offer an EAP to its workforce. Items 1 to 14 in our list have some evidence to back them up (the sources are cited at the end of the checklist). However, little or no evidence exists to support the arguments covered by items 15 to 21.

The evidence

There is only patchy evidence for the business benefits of employee assistance programmes (EAPs), pending further research.

Fortunately, many of the most important reasons for providing an EAP have at least some evidence to back them up (see items 1 to 14 in checklist 1).

These include the value of the management reports supplied by most EAP providers to employers. These reports highlight issues raised by employees using the EAP and enable the employer to take remedial action. In some cases, they can do so before a problem or situation has a significant detrimental effect on the workforce.

EAPs have also been found to help reduce the number and duration of absences from work, and the levels of stress being experienced by employees. They assist in the return to work of individuals on long-term sick leave, and can play a valuable role in promoting employees’ health and wellbeing generally.

EAPs have been shown to help improve performance and productivity, and enable employees and managers to cope well when significant changes are being introduced in the organisation.

Until recently, the most telling business argument in favour of introducing an EAP concerned its ability to protect an employer from liability for compensation for psychiatric injury, particularly stress-related harm. See Employer liability and EAPs: the changing legal position, below, for more information.

The patchy evidence of EAPs' effectiveness can also be controversial and sometimes flawed – see the next section.

The results of five investigations

The previous two sections introduced the business case for employee assistance programmes (EAPs) and summarised the aspects of the business case for which some supporting evidence exists.

In this section, we give some information about five research studies that provide much of this favourable evidence. The evidence is not conclusive, as we explain below.

1. The HSE 1998 study1 (on the HSE website, PDF format, 6.1MB): This major research project involved a three-year investigation of EAPs in the UK by two researchers at the School of Management, University of Manchester Institute of Science and Technology. One of the researchers was Cary Cooper, who has since gained a reputation as the leading researcher into stress at work in the UK. Funded by the Health and Safety Executive, the study began in 1992.

Findings:

  • "Significant" improvements in work-related mental and physical wellbeing by employees who have used their employer's EAP; however, these were self-assessed improvements and were not based on objective performance data.
  • "Significant" reductions in the number and duration of absences from work by employees who have used an EAP compared with those who had not done so.
  • No evidence that counselling continues to have a beneficial impact in the medium to long term.
  • No evidence that the beneficial impact on individuals of using an EAP has an organisation-wide impact.
  • No evidence that by simply providing an EAP an employer will be able to raise job satisfaction or help ease work pressures among employees who do not use the EAP. In other words, simply knowing that an EAP exists has no impact on employees who do not make use of it.

    Drawbacks:

  • The study's evaluation of EAPs focused solely on their counselling services, rather than the whole range of information, advice and support services they offered. It focused solely on the impact of counselling on the stress and wellbeing of individuals. The evaluation encountered several problems, notably a lack of cooperation on the part of some EAP providers, their counsellors and client employers. This meant that the researchers’ questionnaires could not be distributed in the way they originally intended. It also meant that the researchers were unable to create control groups for most of the groups of EAP users being studied. Finally, the results of the study were obtained more than a decade ago.

    2. The BACP evidence review2 (external website): This 2001 study is probably the best-known assessment of EAPs in the UK. It was commissioned by the British Association for Counselling and Psychotherapy (BACP) from Professor John McLeod, professor of counselling at University of Abertay Dundee.

    The aim of this research was to review all available evidence about the impact of EAPs and other workplace-based counselling services. Professor McLeod evaluated more than 80 studies published between 1954 and 2000 that had investigated the effectiveness of workplace counselling; collectively, these studies covered the experiences of more than 10,000 employees.

    Findings:

  • Short-term counselling (mainly accessed via EAPs) typically leads to a reduction in work-related stress to normal levels in more than 50% of participating employees.
  • Short-term counselling (mainly accessed via EAPs) typically leads to a reduction of 25% to 50% in absence levels among participating employees.
  • Analyses show that workplace counselling schemes and EAPs cover their costs, in terms of economic savings that are generated for employers.
  • There is some evidence that higher-cost EAPs tend to have higher take-up rates by employees, with the result that the payback on the employer’s investment is also greater.
  • Employees taking part in counselling (mainly accessed via EAPs) report high levels of satisfaction with it.

    Drawbacks:

  • Like the HSE study (see research study 1, above), this evaluation focused solely on the counselling aspect of EAPs. Many of the 80 studies in the evaluation were not conducted in the UK, and did not necessarily reflect the types of EAPs provided in the UK nor the workplace cultures typical to the UK.

    A debate in the pages of the British Journal of Psychiatry (external website, PDF format, 70.1K)3 in 2003 highlighted some of the problems with this research. It is based on existing evidence, rather than new research, but this is often flawed. Of 19 studies chosen as representing the "best evidence", only five had a control group of non-users of EAPs or workplace counselling. The conclusions of the various studies are arguably not reliable, even in respect of reductions in absenteeism. There is little or no evidence that satisfaction expressed by users of counselling translates into any benefits for the employer that is paying for the EAP.

    3. Right Corecare’s statistics (PDF format, 70.1K)4: Major EAP provider Right Corecare has published statistics of employees using the EAPs it offers under contract to employers. The data cover more than 6,000 individuals who used the counselling components of its EAPs during 2005.

    Findings:

  • More than one in five employees seek counselling via an EAP for health reasons; a further one in five do so for work-related reasons.
  • Individuals using EAP counselling have a satisfaction rate of 95% in terms of their needs being "well met".
  • Two-thirds of individuals using EAP counselling say that they do so because of a problem that affects their performance at work. (Source: Right Corecare website5.)
  • More than eight in 10 individuals using EAP counselling say that their performance at work has improved as a result of using the service. (Ibid.)
  • Three-quarters of individuals using EAP counselling say that they would have taken time off work to deal with their concerns if counselling had not been available. (Ibid.)

    Drawbacks:

  • Like studies 1 and 2 above, Right Corecare's statistics are solely concerned with the counselling aspect of EAPs, rather than the whole range of EAP services. Counselling involves only a minority of individuals contacting EAP helplines. In addition, because they are based on asking individuals using its services, the data are not able to show what impact, if any, the reported benefits have on employers. As noted in study 2, an individual may report a high level of satisfaction or an improvement in their health or wellbeing, but this does not guarantee that these changes translate into an improvement in their absences, performance or other workplace activity. Finally, these statistics are based on one EAP provider’s services, and are not necessarily representative of services provided by other EAP suppliers.

    4. ICAS absence survey (external website, PDF format, 759.6K)6: This major EAP provider conducted an online survey of employers between November 2005 and January 2006. The research was restricted to UK-based employers using its EAP services, and obtained 133 replies.

    Findings:

  • Employers that reported their EAP was “ineffective” have a higher absence rate than employers who considered their EAP to be "effective".
  • The employers with ineffective EAPs have an absence level of 7.88 days a year compared with 6.74 days for employers with effective EAPs; this is a difference of 16.9% or one-sixth.

    Drawbacks:

  • Like study 3, ICAS's research is confined to its own EAP services, rather than EAPs in general. It does not give sample sizes for the findings shown above, nor how the absence levels have been calculated. The division of EAPs into “effective” and “ineffective” is based on respondents’ impressions. The survey did not provide guidance to respondents on the meaning of these terms.

    5. IRS's 2007 research into EAPs (reported in the present article and Employee assistance programmes: the IRS report: Our research asked employers about EAPs and also asked them to supply their latest absence rate. The research is based on information supplied by 127 employers, of which 76 provide an EAP.

    Findings (all tentative):

  • Employers that provide an EAP have a marginally lower annual absence rate than employers that do not provide an EAP.
  • Employers that receive management reports from their EAP provider and take action to address some of the problems highlighted in them have a marginally lower annual absence rate than employers that do not take such action.
  • Employers that provide an EAP but do not experience any problems with it have a marginally lower annual absence rate than employers that had problems with their EAP.
  • EAPs that are relatively well used are associated with lower annual absence rates than EAPs that are relatively less well used.
  • EAPs that are relatively more expensive, based on an annual cost per head of staff, are associated with lower annual absence rates than EAPs that are relatively less costly.
  • EAPs that are considered to be cost-effective are associated with lower annual absence rates than EAPs that are not considered to be cost-effective.

    Drawbacks:

  • The main drawback, and an important one, to study 5 is that it is based on small sample sizes. The findings shown have standard deviations that indicate a wide spread of possible associations. This means that the findings cannot be relied on. In addition, the final finding above is based on respondents’ impressions of value for money rather than a rigorous measure of cost-effectiveness.

    Employer liability and EAPs: the changing legal position

    A landmark legal ruling in 2002 provided a significant boost to the provision of employee assistance programmes (EAPs) in the UK. However, this precedent has been undermined by a February 2007 Court of Appeal ruling.

    In the 2002 case of Sutherland v Hatton7, the Court of Appeal set a precedent whereby employers that provide an EAP were more or less fully protected against compensation claims for work-related stress or other psychiatric injury.

    The XpertHR Employment Law Reference Manual says of Sutherland v Hatton: "An employer that offers a confidential advice service, with referral to appropriate counselling and treatment, is unlikely to be found in breach of duty. The existence or establishment of such a service may itself amount to reasonable steps and so discharge the employer's duty of care."

    EAP providers have made much of this ruling in their marketing campaigns ever since the court delivered its verdict in 2002.

    Less well-known at present is the February 2007 decision of Intel Corporation (UK) Ltd v Daw8, that like Sutherland v Hatton has the force of being a legally binding precedent.

    In Intel v Daw, the Court of Appeal substantially modified the precedent set by Sutherland v Hatton. It has ruled that the provision of an EAP or similar counselling service does not necessarily protect an employer from liability at law for compensation for psychiatric injury.

    The most significant aspect of Lord Justice Pill’s judgment in Intel v Daw – as far as EAPs are concerned – is as follows: "The reference to counselling services in Hatton does not make such services a panacea by which employers can discharge their duty of care in all cases. The respondent, a loyal and capable employee, pointed out the serious management failings which were causing her stress, and the failure to take action was that of management. The consequences of that failure are not avoided by the provision of counsellors who might have brought home to management that action was required. On the judge's findings, the managers knew it was required." (Ibid)

    The effect of Intel v Daw is to undermine the argument that EAPs provide universal protection against stress-related legal claims. The Court of Appeal makes it clear that "whether the counselling service provided will be enough to discharge an employer's duty depends on the facts of each case".

    The Court of Appeal confirmed a lower court’s earlier compensation award to Ms Daw. With interest, the net compensation for injury and loss of future earnings was £134,548.

    Notes

    1. An Assessment of Employee Assistance and Workplace Counselling Programmes in British Organisations (external link, PDF format, 6.1MB), J Carolyn Highley-Marchington and Cary L Cooper, HSE Books, 1998.

    2. Counselling in the Workplace: the Facts – a Systematic Study of the Research Evidence, John McLeod, British Association for Counselling and Psychotherapy, 2001 (external website).

    3. “Does workplace counselling work?” (external link, PDF format, 70K), John Mcleod and Max Henderson, British Journal of Psychiatry, no.182, 2003, pp.103–104,

    4. “Workplace counselling: who is the consumer?” (external link, PDF format, 70.1K), Kevin Friery, Counselling at Work, Autumn 2006, pp.24–26.

    5. “Return on investment”, external web page, Right Corecare.

    6. ICAS Absence Survey 2006 (external link, PDF format, 759.6K), ICAS, 2006.

    7. Sutherland v Hatton [2002] IRLR 263 CA (external link).

    8. Intel Incorporation (UK) Limited v Tracy Ann Daw [2007] EWCA Civ 70, case: B3/2006/1302. There is an online transcript of this case (external link).

    This article was written by Neil Rankin, editor, Attendance and Absence, Employment Review.

    Checklist 1: The business case for EAPs

    An employee assistance programme (EAP) can provide many potential benefits to an employer. There is only limited evidence to support these arguments, however. Points 1–14 in our checklist have some evidence to back them up. See the footnote for the sources of this evidence. There is little or no evidence at present to support the arguments covered by points 15–21.

    Some evidence exists for benefits 1–14:
    1. Employer liability: providing an EAP can help to show that the employer is meeting its legal duty of care towards its employees, particularly in respect of stress at work. However, this protection against legal liability has recently been significantly reduced by a Court of Appeal judgment.

    2. Valuable feedback: the management reports supplied by the employer’s EAP provider help the employer to identify and address problems, such as bullying and harassment, and target interventions in order to improve workforce health and morale. These interventions can help meet the employer’s legal duty of care towards its employees, tackle the causes of some absences and improve morale.

    3. Absences: an EAP can contribute to the employer's efforts to control or reduce absence levels, both the duration of individual absences and their total number. Timekeeping may also improve.

    4. Stress: the emotional support provided by EAP counsellors can play an important role in helping individuals manage their stress levels.

    5. Performance and productivity: the services provided by an EAP can help individuals cope with pressures, worries and stress, to the benefit of their performance and productivity at work.

    6. Change management: employees and managers are more likely to cooperate with changes at work if they have access to the confidential, impartial support of an EAP.

    7. A resource for line managers: an EAP can provide line managers with information, advice and support to help them manage difficult issues and difficult employees, thereby improving their effectiveness as people managers.

    8. Rehabilitation: an EAP can help an employee on long-term sick leave return to work and provide support after they come back.

    9. Labour turnover: an EAP can support employees during difficult times; it can also show that individuals work for a caring employer. Both considerations can help to reduce resignation levels.

    10. Emergencies and traumatic incidents: most EAP helplines are open 24 hours a day and are potentially good sources of support, information and advice for individuals during an emergency. The availability of immediate assistance could help to reduce the risk of post-traumatic stress syndrome.

    11. Health and wellbeing: an EAP can help an employer meet its aspirations to improve the health and wellbeing of its employees.

    12. An integrated approach: the availability of an EAP allows an employer to integrate its services with relevant internal policies and practices, such as bullying, harassment, stress, absence and capability/performance. This integration could help to strengthen the employer’s practices in these areas and produce better results.

    13. Supporting HR staff: busy HR departments can refer employees and managers in appropriate circumstances to the services of their organisation’s EAP as a means of reducing HR's workload.

    14. Occupational health referrals: access to an EAP can reduce the number of referrals to occupational health specialists made by employers in respect of their staff.

    Little or no evidence exists for potential benefits 15–21:
    15. Referrals by line managers: an EAP can provide line managers with a resource to which they can refer members of their teams, particularly in respect of problems that line managers are unable to handle effectively themselves.

    16. Smoking cessation: an EAP can offer support with smoking cessation, an increasingly important aspect of employers’ policies and legal duties now that smoking in enclosed public is unlawful from 1 July 2007.

    17. Drug and alcohol abuse: EAPs are heavily used in the US to help employees who abuse drugs or alcohol. They could play a similar role in the UK.

    18. Morale: the provision of an EAP can help show employees that their organisation wants to support its staff and act as a caring employer. This knowledge could help improve morale and motivation generally.

    19. Timely counselling: there are often considerable waiting times for NHS counselling services, so the provision of an EAP can give employees fast access to such assistance. This could help them cope with common mental health problems, such as stress, more quickly and easily, which is to their and their employer's mutual benefit.

    20. Interpersonal conflicts: access to telephone and face-to-face counselling can help individuals resolve interpersonal conflicts, such as with their line managers or colleagues. EAPs usually also offer legal advice so that enquirers can understand their rights in conflicts that involve bullying, harassment or discrimination, for example.

    21. Customer care: access to an EAP can improve an individual’s self-esteem and morale, and remove distractions that could impede the standard of customer care they provide at work.

    Sources of research evidence that support items 1–14 above:

    IRS research into employee assistance programmes, February and March 2007, as reported in this feature and in Employee assistance programmes: the main IRS report.

    Counselling in the Workplace: the Facts – a Systematic Study of the Research Evidence, John McLeod, British Association for Counselling and Psychotherapy, 2001 (external webpage).

    An Assessment of Employee Assistance and Workplace Counselling Programmes in British Organisations (external link, PDF format, 6.1MB), J Carolyn Highley-Marchington and Cary L Cooper, HSE Books, 1998.

    “Workplace counselling: who is the consumer?” (external link, PDF format, 70.1K), Kevin Friery, Counselling at Work, Autumn 2006, pp.24–26.

    “Workplace counselling and the duty of care: what next?” (external link, PDF format, 126.5K), Peter Jenkins, Counselling at Work, Summer 2006, pp.16–19.

    ICAS Absence Survey 2006 (external link, PDF format, 759.6K), ICAS, 2006.

    “Return on investment”, external web page, Right Corecare.

    Source: IRS.