Buyer’s Guide to employee assistance programmes

When a group of American post-World War II production line workers realised the benefits of holding regular meetings to discuss the problems of alcohol abuse, they had no idea of the importance of their discovery. They had laid the foundations for an employee-focused programme that decades later would be extended to cover a multitude of problems incorporating drink, drugs, stress, legal issues and childcare woes, which would be grouped within the confines of employee assistance programmes (EAPs). EAPs did not land in the UK until the early 1980s, and though UK models can differ greatly from their US counterparts, the principle remains the same.

Pauline Bratton, EAP services manager at First Assist, describes modern-day EAPs as "work-focused programmes, used to identify solutions to concerns affecting individual performances". The UK model now takes on different guises, and an EAP can be brought into an organisation for various reasons.

Colin Whitehead, sales director at Icas, explains: "EAPs are no longer associated with employee assistance but instead must be able to cover a vast spectrum of professional and life issues". One such issue, which has received much press coverage over the past year is absence management. The past 12 months have seen EAPs being used as a tool to help measure, prevent and manage absenteeism. Dudley Lusted, head of corporate healthcare development at Axa PPP Healthcare, agrees that 2005 has been a turning point for the EAP product: "There has been a shift from an EAP being a management support tool, to being an essential absence management tool in the workplace." Melvyn Measures, service product director at First Assist, agrees that the uptake of EAPs in order to deal with absence management has seen a sharp rise. "In 2004, around 10% of our clients were purchasing EAPs to manage absenteeism. In 2005, we had an increase of 40%-50%, which shows how interest has grown," he says. What is more, this is not just being driven by the human resources department. First Assist is also now receiving requests from financial directors, asking for details of how an EAP can be used to deal with absenteeism. "This is costing organisations a lot of money, financial departments want it resolved and they are realising that absenteeism needs to be dealt with," explains First Assist’s Measures. As in any business, a product adapts to the demands of the market, and the EAP industry is no different. Charles Kydd, client services manager at Focus EAP, explains: "The rise in absenteeism studies has encouraged EAPs to be used as a more sophisticated absenteeism tool. They can [be used to] gather statistics and help to actually understand the problem, not only satisfy legal requirements." As a tool to manage absence, EAPs look to tackle the issue of employees that are guilty of skiving rather than absent for genuine reasons. Over the past 12 months, EAPs have been looking to delve deeper into the issue, identifying the reasons why employees may lie in order to avoid attending work. Some providers however, although keen to promote EAPs as a method of aiding absenteeism, do not want to let management get carried away with the idea that this is going to solve all their problems. Absenteeism, though a hot topic in 2005, is an ongoing and complex issue, and to suggest that an EAP can banish the problem overnight is perhaps a little hopeful. Paul Avis, director at Employ-mend, is concerned about the way some organisations believe an EAP is the cure to a problem, which runs much deeper than many may initially suspect. "We have yet to see a clear cost benefit from an EAP on absence management, yet providers themselves are convinced that they have a positive impact on reducing absence. But EAPs do not equal absence management in isolation," he admits. With this made quite clear, Avis is also keen to point out that the efforts going into creating more sophisticated and advanced EAPs is not going to waste. And management must play a vital role in the implementation of EAPs, if they are to assist in reducing absenteeism. "Many employers are not getting the most out of their EAPs but with quality monitoring and employee communication they can be part of the absence solution," he says. Though the focus on absence management is far from over and will, undoubtedly play another important role in shaping the EAP product in 2006, some providers believe there is another factor that will influence EAPs this year. Many small- and medium-sized employers (SMEs) are seen as untapped markets for providers which are beginning to tailor their product to suit the needs of organisations with as little as 50 staff. "This is something that will happen. Much of the EAP attention is on the large private and public sector companies, not the smaller firms, and 2006 will look to address this," explains Avis.

The Facts What is an employee assistance programme (EAP)?
An EAP is essentially an organisational resource used to identify and assist in health-related issues at the workplace. These typically include a 24-hour helpline, backed up with the ability to access a face-to-face counselling service. EAPs have a heavy emphasis on stress management but also extend counselling to cover legal advice, financial and other personal and work-related issues.

What are the origins of EAPs?
EAPs were created in post second world war America. Originally devised by production line staff, who decided to set up forums to deal with alcohol and drug abuse problems at work. Employers eventually realised that this was not only improving work attendance but also productivity, and they decided to invest in the project themselves. EAPs arrived in the UK during the 1980¬’s and have since evolved into a much different mode from many American programmes.

Where can employers get more information and advice?
The Employee Assistance Programme Association is a professional body for the EAP industry. The website offers advice on EAPs and lists the main providers of the scheme:

Nitty gritty

What are the costs involved?
Costs obviously vary depending on head count and the type of product bosses are looking to buy. Prices per employee typically range between £4 and £20 per year.

What are the legal implications?
Employers that provide access to an EAp for staff, proactively promote it to their workforce and operate a system of management referral, may be considered to have exercised a duty of care towards their employees. However, following several high profile legal cases, employers should not assume that simply offering an EAP is enough to protect against litigation. Instead, EAPs should form part of an overall approach that includes occupational health tools, absence management systems and stress audits. With an ever increasing number of providers in the EAP market today, the products on offer differ greatly and the some of councillors available will be less qualified than others. It is important to check the experience and quality of the councillors made available to them, as poor counselling could result in legal action being taken.

What are the tax issues?
HM Revenue & Customs states that general welfare counselling is exempt from tax except for employer-financed medical costs or counselling on financial, tax, legal or leisure matters. Typically, EAPs are a tax-deductible business expense, which do not give rise to P11D liabilities for employees unless they form part of certain types of employer-paid group health schemes.

In Practice What is the annual EAP spend?
Industry bosy EAPA estimates a current spend of around £22m per year for about 1,000 organisations.

Who has the biggest market share?
Icas claims to have the majority share at 26%, though they are in a competitive market with providers such as Bupa Wellness, First Assist Group Ltd, Accor Services, Ceridian Centrefile, and AXA PPP Healthcare.

Which EAP providers increased their market share the most over the past year?
Bupa claims to have enjoyed the most growth over the past year.