ROI tool removing barriers to employer workplace health promotion

24 Jan 2019

A new tool calculating the return on investment (ROI) of employee assistance programmes (EAPs) offers employers the chance to take an evidence-based approach to their workforce health efforts.

Created by the Institute for Employment Studies (IES) on behalf of the Employee Assistance Professionals Association (EAPA), the tool responds to a lack of evidence for the cost-effectiveness of workplace health initiatives, as identified by the Stevenson-Farmer, Thriving At Work report.

An interim study report highlights that, despite evidence of the business case for investment in employee mental health promotion, previous data have not sufficiently related to the conditions of UK small- and medium-sized businesses – data are from large businesses in the United States.

Therefore, this tool aims to capture data of sufficient quality to demonstrate cost-effectiveness and workforce health benefits. IES drew on analysis from the field of human capital to calculate reliably the organisational productivity gains associated with improved wellbeing as a result of the use of EAPs.

In order to estimate the direct and indirect costs of sickness absence to an employer, the tool adds realism to cost estimates borne from the human capital approach, by making assumptions about the balance between direct and indirect costs.

Early indications from the data collected from the tool suggest that the ROI of EAPs is positive, even with lower absence and utility figures. IES will publish core findings of the study later in 2019.

IES Research Fellow and co-author of the report, Zofia Bajorek, commented:

‘There is a wealth of evidence available to suggest that the health and wellbeing of the workforce is important to focus on, yet the personal and financial costs of poor mental health for individuals and their employers suggest that more needs to be done to help those with mental health problems at work. In this context, it is important to ensure that health and wellbeing interventions should be evidence-based to be of greatest value to organisations.’

Neil Mountford, Chair of EAPA, commented:

‘While EAPs are among the most commonly used wellbeing interventions in the UK with close to half of the workforce (a total of almost 14 million) having access to an EAP, very few providers or employers have been able to collect data beyond basic take-up and satisfaction surveys.’

‘Data from the first users of the tool have shown that EAPs have a significantly positive return-on-investment in terms of organisational, as well as individual, outcomes. As we gather more data from EAP providers, IES will be able to further develop the tool and provide more in-depth analysis of financial outcomes – meaning increasing levels of credibility for the figures and their use with senior management and for wellbeing strategy investment.’