What's the ROI on an EAP?

Businessman in grey suit, isolated

These days, most employers are aware that healthier, happier employees are more effective at their jobs. More companies than ever are investing in the mental health and wellbeing of their staff. But managers still need to validate this expense, and that’s not so simple with something as intangible as emotional wellbeing.

So what are the measurable outcomes of an Employee Assistance Program, and how beneficial is this to your bottom line? Let’s take a look at some of the costs and benefits.

The costs of a mentally unhealthy workplace are huge

Mental illness, stress, burnout, bullying, addiction, or personal and relationship issues can seriously impact an employee’s performance and increase their risks of physical or psychological injury at work Indeed, untreated mental health conditions are estimated to cost Australian workplaces $10.9 billion per year (1). However, as this estimate does not take into account the costs of staff turnover and re-training, in reality the costs are likely to be higher.

Estimated mental health related costs to Australian businesses:

  • $4.7 billion per year from absenteeism i.e. mental health related sick leave.
  • $6.1 billion per year  from presenteeism i.e. working while mentally or physically unwell.
  • $146 million per year from compensation claims i.e. work-related psychological or physical injuries.

Employee Assistance Programs prevent these costs and provide impressive returns

An analysis conducted by PwC and funded by Beyond Blue and the Mental Health Commission found a 2.3 ROI for the use of EAP services. PwC’s analysis was based on an EAP’s ability to improve the three factors of a) absenteeism, b) presenteeism and c) compensation claims). But there are even more areas where an EAP can lead to a significant ROI. One study found a $3 return on every $1 spent when alcoholic employees received EAP counselling and support, improving their absenteeism from 8% to 4%. Some studies have found that the ROI for EAP use increases progressively over time with ratios as high as 14:1 in some industries (2).

Benefits for employees and employers alike

Having workplace mental health programs in place can improve productivity, performance, workplace culture, boost morale and prevent the huge costs caused by compensation claims, absenteeism and poor productivity. Prioritising your employee’s wellbeing will also increase loyalty to your organisation, reducing staff turnover and the associated costs of hiring and re-training. With Employee Assistance Programs proving to benefit employers and employees in many measurable ways, it’s not surprising that more businesses than ever are providing mental health support to their staff.

To find out more about the employee support services we provide, visit our website or call us on (02) 8007 7474 or check out our range of mental health and wellbeing training workshops.

 

  1. https://www.headsup.org.au/docs/default-source/resources/bl1269-brochure—pwc-roi-analysis.pdf?sfvrsn=ace47a4d_6
  2. Masi, D. (2005). Employee Assistance Programs in the New Millennium. International journal of emergency mental health, 7(3), 157-168J.

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