How To Cut $5,000 Off The Cost Of Each Employee
The man on the telephone identified himself as the president of a small publishing house in New York City. He had found a letter from the local affiliate of the National Council on Alcoholism in his morning mail, and he was calling to complain about receiving it. "Who told you we've got drunks here?" he demanded. "Where did you people get our name?"
It was only a form letter -- one of 500 such letters sent to chief executives and personnel directors of small companies in and around Manhattan last summer, as yet another of the council's attempts to bring its programs to smaller companies -- but the message within it was so direct that it seemed personalized. "Ten percent of your employees come to work with alcohol, drug, marital, and psychological problems that may affect their well-being and productivity," the letter warned. It added that each of these "troubled employees," carries a price tag of "$3,000 to $5,000 or more" per year, as a consequence of diminished job performance, absenteeism, and increased use of health-care coverage. Then, in the final paragraphs, came the pitch: Through the establishment of an employee-assistance program (EAP), the council advised, a company can provide the professional counseling that allows employees to try to resolve their personal problems voluntarily, or they can be referred to the program by a supervisor who had identified job-performance difficulties. Interested managers were urged to contact the council for more information on how to add an EAP to their benefits package.
The publishing-house president, however, described himself as "emphatically disinterested" in what the council had to offer. Why should he be interested in a program that his company didn't need? "We don't have any 'troubled employees," he insisted.
His was not the only hostile telephone call that came in, says Charles Shirley, who leads the council's three-member EAP team in New York City. Several other chief executive officers were just as sure that their work forces defied the statistics, and all were as vehement as the first in their rejection of the council's expertise. Beyond those calls, however, the response to the awareness campaign was "zilch." Shirley, who had seen the directmail marketing effort as something of a last-ditch effort to reach the smaller business employer, came away all the more discouraged. "I'm at a loss as to how to reach the under-500-employees group," he says. "These companies have always seemed to have a knee-jerk reaction against EAPs for some reason."
When the first EAPs were developed more than 40 years ago, they were exclusively alcoholism-treatment programs, administered in-house by recovering alcoholics. Only the largest companies could afford the human and financial resources the programs required; hence, smaller employers steered clear. But, even as contract providers have sprung up to meet the ever-lengthening list of personal problems now handled by EAPs, and as these providers have moved the counseling away from the workplace, the growth of EAPs has remained primarily a big-company phenomenon. A recent congressional report put the segment of the work force now covered by an EAP at 12%, of which experts say only 2% are employees of smaller companies -- providers of the vast majority of American jobs. The slice seems all the more slim, many of these same experts say, when one considers the fact that smaller organizations have less human-resources fat and therefore can be affected more easily -- and adversely -- by troubled employees.
Shirley says he might chalk up the foot-dragging to money -- if the programs were expensive and if he could get inside a company long enough to even talk dollars and cents. But he hasn't been invited to make many of those presentations yet. Nevertheless, it is an accepted fact that most companies with more than 100 employees can design and install their own EAPs for an annual cost of $20 to $40 per worker. Even the tiniest enterprises can find comparable prices if they join other companies in an EAP consortium (see "But We're too Small for a Program . . . .", page 109). Many organizations, in fact, spend less on the entire program than they would spend to send an employee through the traditional health-care system, or to recruit a replacement. No, Shirley concludes, the reticence has to be a matter of attitude.
"There's a denial process that sets in when there are troubled employees in a small work force," Shirley says, "and it's almost like what goes on in a family when one of its members has a serious problem of some kind. Small companies, like families, don't want to believe they have problems, and they certainly don't want outsiders knowing about them."
The executives of smaller companies frequently admit just that, says Carl Tisone, CEO of Personal Performance Consultants Inc. (PPC), a leading EAP provider based in St. Louis. "They'll tell you very proudly, 'We operate like a family, and when my employees have a problem, they don't go anywhere but to me." That may be true for some employees in some companies, Tisone says, but he believes this paternal approach is as likely to discourage communication and the pursuit of professional counseling as it is to encourage it. Too often, he says, both manager and employee unconsciously conspire to make the problem their own little secret, each hoping that ducking the issue will make it go away. But sooner or later, there is one too many sales bobbled, or one too many belligerent incidents, and the manager is forced to choose between sidelining a key employee and calling in outside help.
"Crises are my best sales tool," agrees Tisone. "But, unfortunately, by the time the situation reaches that crisis point, it's probably too late" for PPC or any provider to offer a quick fix for the floundering worker. It is much better for all concerned -- and, says Tisone, more economical -- to take action at the first inkling of trouble. Witness the case of Savings and Loan Data Corp. of Cincinnati -- one of PPC's EAP clients.
In 1978, the company, a $14-million, 55-employee business servicing computers for savings and loan operations in 11 states, changed hands. It was sold by its parent, the regional branch of the Federal Home Loan Bank Board, to the bank board's member financial institutions. The office was moved 20 miles down the road, and people who once worked side by side were now separated -- some staying with the government, others heading into what seemed to be a tenuous new venture. Suddenly, some employees were showing signs of slackening their efforts, and others were putting in too many work hours. Neither response proved productive.
President Stephen E. Clear realized he would have a "sinking ship" to contend with if he didn't find "some sort of release, some kind of safety valve" through which employees could deal with their stress. He settled on an EAP, and in the first year, more than 20% of the work force availed themselves of its services. All but a handful referred themselves voluntarily. The improvement in morale was immediately palpable -- and it remains so, despite the fact that the company now has twice the number of employees, and the segment of the work force seeking counseling has fallen back to a more normal 10.5%. There have been steady reductions in turnover, and employee surveys regularly give the company's working atmosphere high marks -- both indications, Clear says, that having an EAP pays
Tisone, however, says the credit belongs with Clear and his supervisors. Successful EAPs, he explains, are the direct result of a managerial environment that removes the stigma from revealing problems and makes counseling both acceptable and accessible. They should start with procedural matters: Tisone and most EAP providers recommend that a written policy be developed to define the company's commitment to the program and to the psychological well-being of its workers. Employees should be assured of confidentiality through promises of minimal record-keeping -- all paperwork dealing with diagnoses, for example, should be anonymous, and should be kept separate from the personnel jacket, if not off-site. Employees should then be encouraged to make maximum use of the program's services by making counseling appointments easy to schedule and keep, and by promoting the program both inhouse and through letters sent to the employee's home.
Another requirement for a successful EAP is a company health-care policy that is ample enough to cover at least a portion of any long-term counseling referrals not covered by the EAP contract. In these days of escalating health-care costs, such a move requires a strong commitment to the EAP. But many providers say that is exactly the demonstration of support that inspires employee confidence in the program, encourages its use, and prevents the overuse of more-expensive health-care options. No employee is going to want to get help, they point out, if it appears that obtaining the counseling could pose a financial hardship.
But Tisone says many EAP providers will avoid referring employees to other professionals and will make every effort to resolve an employee's problems within the three to seven free counseling sessions most programs offer. "Once the problem is referred out, there's usually not the tight case management there should be, and problems tend to drag on too long," he says.
Training is also important. Tisone and other EAP providers recommend that all employees be briefed on the finer points of the program and that such gatherings be followed by several hours of supervisory training for all managers -- from CEO to department heads. Particular attention should be paid, Tisone says, to teaching supervisors how to recognize problems that can be addressed by the EAP, and how to confront the employee with the referral. That means dealing with the one thing that any supervisor can judge better than a PhD can -- job performance. Referrals should be made only according to that yardstick, and when it comes time to confront an employee, that should be the only matter up for discussion. To make accusations or armchair diagnoses is to court a discrimination lawsuit.
But a company can hit all of these marks perfectly and still not be able to ensure the success of its EAP, Tisone says, and when that happens, attitude is once again to blame. "If management doesn't recognize and destigmatize the problems that exist within the company, the problems will stay buried and become crises waiting to happen. The CEO has to demonstrate an active interest in the EAP and be perceived as a supporter of it. Ignoring the problems won't make then go away."
Clear agrees. "To say your company is clean and pure may be self-comforting, and I know several CEOs in my peer group who don't think that providing what they call a shrink service is the role of business. But I'm convinced that attitudes like that won't get you through the '80s. You're going to need all the tools -- and an EAP is a tool that I know works." He pauses to laugh. "Let me put it this way: If my competitors never use an EAP, it'll be fine with me. I'll be in business longer than they will."