Buyer’s guide to employee assistance programmes 2011

What are employee assistance programmes (EAPs)?

Employee assistance programmes are confidential information and support services designed to support employees who have work or personal problems. They include a 24-hour helpline and full EAPs also offer access to face-to-face or telephone counselling, where necessary.

EAPs can also be used to support line managers and HR departments with work-related issues. Although confidential, the management information they generate can be used to help an employer identify potential problems in the workplace.

What are EAPs’ origins?

The provision of workplace counselling can be traced back to Victorian Britain, but EAPs were first used in the US in the 1950s to deal with alcohol problems. EAPs crossed to British shores in the 1970s.

Where can employers get more information and advice on EAPs?

The Employee Assistance Professionals Association (EAPA) is the professional body for EAPs. Its website gives details of providers and consultants, as well as information about the market.

What are the costs involved?

Costs can vary from £1 a year per employee for a simple helpline to £15-plus for a fully integrated service. A standard package giving access to face-to-face counselling sessions costs between £5 and £8 a year per employee.

What are the legal implications?

In 2002, the Court of Appeal ruled that an EAP could protect an employer from being sued for stress by an employee. But in 2007, judges stated that simply making an EAP available was not enough to safeguard employees’ mental health.

What are the tax issues?

EAPs are regarded as a business expense if they follow HMRC guidelines. These stipulate that advice cannot be given on financial or legal problems and services cannot be provided to dependants, unless it is for couple or family counselling that involves the employee.

What is the annual spend on EAPs?

The most recent statistics, from 2008, show £50.6 million was spent on EAPs by 5,200 employees covering 8.2 million staff. Eugene Farrell, business manager for Axa Icas and chairman of the EAPA, says: “I suspect it is still
around the same spend. Numbers covered have increased slightly, but prices have dropped.”

Which EAP providers have the biggest market share?

The largest providers include Axa Icas, Ceridian, First Assist, PPC Worldwide, Validium and Workplace Options.

Which EAP providers increased their share the most over the past year?

Providers that have increased their market share include Validium, which bought Dovedale Counselling, and Ceridian as it picks up more of Unum’s group income protection clients.

There are some bargains to be had in the EAP market, but employers should check out the comprehensiveness of the service they are being offered, says Sam Barrett

Prices are falling in the employee assistance programme (EAP) market. A service that might have cost about £25 a year per employee 12 years ago is now down to as little as £5 per employee.

Melvyn Measures, head of product and pricing at FirstAssist, says the price drop is due to a number of factors. “Corporate procurement has helped to shift the focus onto price for larger schemes and we have also seen intermediaries helping to put pressure on price,” he says. “Free EAPs, such as those included on cash plans and with group income protection plans, have also meant price is all-important.”

But although this may signal some bargains for employers, warning bells are ringing. Lee Thurston, head of practice at JLT Benefit Solutions, says employers need to be aware that EAPs vary in their comprehensiveness.

“There is a risk that employers will cancel an existing EAP when they get a free one with another product. But these ‘freebies’ are often cut-down versions,” says Thurston.

Awareness of the difference in products is growing, with some employers upgrading their offering. Ceridian, which offers a free EAP to Unum’s group income protection customers, has experienced this. Graeme Weymes, UK sales director of Ceridian’s EAP service Lifeworks, says: “So far, around 100 employers have asked to upgrade their EAP service or to extend it to additional employees. This is really encouraging.”

Further consolidation

There has been consolidation in the market in the past 12 months. Capita Group has acquired FirstAssist Services, and PPC Worldwide has acquired Australian EAP provider IPS Worldwide. Eugene Farrell, business manager at Axa Icas and chairman of the Employee Assistance Professionals Association, says more mergers are likely. “Larger providers can access economies of scale. There is still room for smaller players, providing they become very specialised.”

At the same time as the market appears to be adopting a bargain basement approach, demand for workplace counselling services has never been higher. Kevin Friery, clinical director at Right Corecare, says that in spite of budget constraints, more employers are introducing EAPs. This is because of more concerns about stress, he says, but also, as workforces are cut, a drive to make staff as resilient as possible. “It makes good business sense to do this as it can drive employee engagement,” he adds.

The British Association for Counselling and Therapy’s survey Attitudes to counselling and psychotherapy, published in August 2010, found that 54% of employees would like their employer to provide a confidential counselling service to help them through the recession.

To counter the price wars, EAP providers are looking at how they can differentiate their services. Breadth of service is the most obvious difference, with the more specialist providers promoting their consultancy-based services. Anne Payne, executive director of Validium, says: “We are more expensive, but we will work on a partnership basis with employers.” Such services could involve identifying where an organisation has problems before targeting them by training line managers or providing support information for employees.

JLT’s Thurston says he has noticed a real push on providing information on EAPs. “Some providers are really encouraging employees to call for much more positive information, such as which are the best local schools and how to find a child minder,” he says. “This also helps to increase usage.”

Greater integration between EAPs and other benefits and services is another market trend. Alan King, president and managing director of Workplace Options (formerly Employee Advisory Research), says his organisation has been looking at how to combine services to make employees stronger and more resilient.

“By integrating services, you can achieve more,” he says. “Linking an EAP into absence management will ensure staff who are suffering mental health problems are identified and supported as early as possible. This can improve outcomes.”

But although this approach has its merits, it is not always possible to turn it into reality. Amy Osmond, senior employee benefits consultant at Lorica, says integrating benefits can be frustrating. “There needs to be better integration. I have seen cases where an employee, having used all their counselling sessions on the EAP, falls back onto the medical insurance to be told they cannot use the same counsellor because they are not recognised by them. It is not helpful.”

The delivery of EAP services is another differentiator providers are keen to flag up. Counselling is traditionally delivered face to face, but is also well established as a telephone service. Right Corecare’s Friery says: “It is effective and there is also flexibility surrounding when and where the session takes place.”

Internet-based counselling is also starting to take off, with email and chat services available. There are also murmurs of iPhone apps in development, although these would be limited to information, rather than counselling.

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Andrew Kinder, chartered psychologist at Atos Healthcare, says that as employers become more aware of an EAP’s value, pay-as-you-go services will become more popular.

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