New York, NY (PRWEB) December 19, 2014
Over the past twenty years, the number of businesses that have employee assistance programs (EAPs) has more than doubled. According to a 2014 Employee Benefits report from the Society for Human Resource Management (SHRM), 74.0% of businesses currently offer EAP services. In particular, many businesses have rapidly adopted EAP services to help lower costs. For example, according to data from the Employee Assistance Trade Association (EASNA), mental health disorders and substance abuse problems have been prevalent among working age individuals, with 25.0% of adults having a diagnosable mental disorder. In addition, 20.0% of adults have an alcohol abuse problem and 12.0% have either a drug or other substance abuse problem. Overall, employees that have untreated mental health issues and substance abuse problems can add to costs for employers, such as costs related to employee absenteeism, limited productivity, high turnover and more disability claims.
The adoption of EAPs has been further exacerbated by a high return on investment (ROI) for businesses that have EAPs, with ROIs between $3.0 and $10.0 for every dollar spent on EAPs on average, according to data from EASNA. According to IBISWorld Industry Analyst Sarah Turk, “As healthcare reform has required many businesses to offer employer-mandated health insurance, many businesses have looked toward cost effective employee benefits, including industry services, thus causing revenue for the Employee Assistance Program Services industry to rise 9.5% in 2014.” During the five years to 2014, industry revenue is expected to grow at an annualized rate of 5.6% to $4.5 billion. Profit is anticipated to increase from 3.9% of industry revenue in 2009 to 5.3% in 2014, due to many businesses expanding their use of EAP services to include family and marital counseling, crisis planning, preretirement planning and other services.
“Over the next five years, many EAP providers will focus on bolstering employee utilization rates,” says Turk. For example, according to Towers Watson, while 85.0% of employers offered stress management services, only 5.0% of employees used this service. As a result, industry operators will focus on effectively communicating the availability of services to employees and overcoming stigmas related to employees' seeking help for mental health disorders.
For more information, visit IBISWorld’s Employee Assistance Program Services in the US industry report page.
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IBISWorld industry Report Key Topics
The Employee Assistance Program Services industry provides support for family, financial, career and legal issues through an employee's benefits package. Industry operators provide a variety of services, including health coaching, nutrition and naturopathic advice. Employee assistance programs are often referred to as EAPs.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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