Understanding the Cost of Employee Assistance Programs (EAP) & Their Value

The TL;DR:

While prices for EAP services vary, the estimated ROI for mental health support programs is $2.30 – $4 per dollar spent. However, low utilisation rates often limit ROI.
While ROI metrics are compelling, the shift from ROI to ROV (Return on Value) highlights the broader impact of EAPs on workplace culture.
Sonder integrates mental health, safety, and medical advice into a holistic care model to enhance utilisation rates and deliver a higher ROI and ROV.

When buying or renewing an Employee Assistance program (EAP) organisations must evaluate its cost and overall impact on employee wellbeing. In this article, we’ll share the direct and indirect financial benefits associated with EAPs and how forward-thinking teams are approaching value assessment.

What is an Employee Assistance Program (EAP)?

An EAP is designed to help employees cope with personal and professional challenges that might affect their work performance. These programs offer various services from counselling sessions to conflict resolution and stress management.

Why support your employees with an EAP service?

Supporting your employees to perform at their best is crucial. EAPs have been the status quo in many organisations, aiming to improve their current employee’s wellbeing and engagement, boost productivity and aid retention. Providing employees with pathways to support also helps to alleviate pressure on managers, who can sometimes become accidental counsellors for their teams.

Employee wellbeing programs play an important role in attracting prospective employees too. People’s expectations of their employers, and the role they believe they should play in supporting their health and wellbeing, is increasing. According to our survey, 91% of employees said it’s important to them that their next employer offers mental wellbeing support.

By investing in an EAP, or a complete wellbeing offering like Sonder, businesses have an opportunity to stand out as an employer of choice with a compelling employee value proposition (EVP). In a recent webinar, Charter Hall’s People Manager shared the importance of a wellbeing offering when it comes to attracting top talent.

"It is becoming a really, really key element of the EVP and if you're not proactive and strong in this space. It really does leave a gap."

Key components of EAP programs

Typically EAPs provide services to support employees in different areas of their lives, including:

Counselling services: Confidential counselling to tackle personal and work-related challenges.

Conflict resolution: Assists employees in resolving workplace disputes.

Stress management: Provides techniques and strategies to manage and mitigate stress.

Substance abuse: Supports employees struggling with addiction issues.

While these services are valuable, many employers are now looking for a more comprehensive approach, beyond just mental health services. Modern platforms like Sonder integrate mental health, safety, and medical advice into a holistic care model, offering benefits beyond a traditional EAP.

In a sample of 10,000+ active member cases at Sonder, most people who reached out for support were contending with multiple challenges. Almost 72% of members presented with more than one wellbeing issue and nearly one in five people had five or more presenting conditions. This illustrates that wellbeing is unique and complex, and cannot usually be solved with mental health counselling alone.

Image description: sonder-team-suppot-centre-hq

Deciphering EAP costs and their impact

The cost of an EAP service varies, depending on various factors:

The number of employees: Pricing models can vary significantly between large and small organisations.

Range of services: Comprehensive EAPs may cost more and offer a wider array of services.

Usage frequency and duration: The cost could be determined by how many employees use the service and how often.

For example, EAP costs could be structured per session or as a fixed rate per employee per month or year. Understanding these elements is crucial for making an EAP investment that is both effective and economical.

Balancing the ROI and value of EAPs

Most HR teams are expected to quote ROI metrics in their EAP and employee wellbeing business cases. For that reason, here are some generic statistics that might be helpful for your business case:

The estimated ROI for mental health support programs is $2.30 – $4+ per dollar spent.*
The estimated ROI for holistic programs (that offer more than only mental health support and counselling) is even higher.

However, achieving a higher ROI is often hindered by low EAP utilisation rates, sometimes as low as 5%, due to:

Cultural integration: Lack of awareness or trust in the EAP or stigma around seeking help.

The fit of solutions: Services offered may not meet the diverse needs of employees.

Past experiences: Negative interactions with EAPs can deter future use.

These challenges underscore the importance of choosing an EAP that aligns with an organisation’s unique needs and actively promoting its benefits to increase engagement.

* Sources: PwC Australia, KPMG and Mental Health Australia, Centre for Health Economics Research and Evaluation, Productivity Commission, National Safety Council, World Health Organization, International Foundation of Employee Benefit Plans

Measuring EAPs Return on Value (ROV)

Historically, when evaluating employee wellbeing programs, business leaders have focussed on return on investment (ROI) and people leaders have focussed on the impact on their people.

Today, as business leaders have become more attuned to the flow-on business benefits of a healthy workforce, and people leaders have become more data-savvy, the two camps are building alignment around an agreed return on value (ROV) assessment – which considers the program, business, and people impact.

An ROV assessment is a more comprehensive measure of the success of an employee wellbeing program than an ROI calculation.

Given the evidence that non-financial metrics can later impact financial metrics, ROV considers both direct and indirect financial benefits to paint a more holistic picture of how an employee wellbeing program is tracking.

An ROV assessment measures both direct and indirect benefits.

Sonder's alternative approach: A modern solution with enhanced ROI and ROV

Sonder provides a holistic care model that integrates mental health support, safety assistance, and medical advice. This approach not only caters to the diverse needs of employees but also aligns with the financial considerations of organisations.

By offering a broader range of services, in a format that is easy, accessible and engaging, Sonder is used by more people, more often. The platform achieves, on average, a 10x uptake vs traditional EAPs.

With pricing models that reflect the comprehensive nature of its services, Sonder aims to deliver a higher ROI by mitigating factors that typically limit EAP utilisation.

Reduced absenteeism and turnover

Through proactive digital services and responsive human support, Sonder customers have been able to reduce absenteeism and turnover within their organisation. Self-reported data from Sonder members indicates an average reduction in unplanned absences by up to 12.5% for those who engage with the platform.

Image description: A bar graph showing that sage of Sonder has shown to improve employee retention by 6%

Employee turnover can be costly. With recruitment fees, time spent interviewing and training, not to mention the knowledge loss, it’s easy to see why an employee choosing to leave can impact a business’ bottom line.

Impact to retention: Using data matching between client HR labour turnover data and Sonder usage data, analysis of current Sonder clients has shown to improve retention by 6% – an ROI of around $3.50 – $4 for every dollar spent on Sonder. (see graphic below – analysis from a mid-sized client).

Image description: A bar graph showing an average reduction in unplanned absences by up to 12.5% for those who engage with Sonder.

The way forward with EAPs and their alternatives

Want to learn more? Dive deeper into the world of EAP alternatives and discover how they can transform your organisation with our ultimate EAP buyer’s guide.

Learn how to compare vendor offerings
Discover what makes EAP alternatives different
Gain insider tips and statistics
Write a convincing business case

Image description: Sonder’s ‘How to compare EAPs’ report offering an insider;s guide to employee assistance programs

Want to learn more?

Ready to experience a modern approach to employee care? Contact Sonder today to discover how our platform can benefit your organisation.