How EAPs Help Employees With Financial Stress

Money isn’t everything, sure. But for someone facing financial trouble, it’s huge.

At some point, we all face uncertainty. In fact, many of us live on the cusp of poverty. A staggering 58% of Americans would struggle to pay bills and buy necessities if just $100 were missing from their paycheck, according to a Morning Consult survey commissioned by Paycom.

Even if companywide raises aren’t feasible, employees still need support. When your people feel like they’re drowning in financial stress, employee assistance programs (EAPs) can help them stay afloat. Luckily, 81% of companies offer some form of an EAP, per research from the Society for Human Resource Management (SHRM).

Whether you need to refine your existing program or pilot your first EAP, we can help! We’ll dig into:

• what an EAP is
• how they formed
• how the programs alleviate financial stress
• how the right HR tech simplifies EAP management

What is an EAP?

EAPs are an employer-sponsored benefit designed to support workers through personal and professional needs, including:

• financial wellness
• legal aid
• mental and physical health
• adoption and parenting services
• stress management
• grief and addiction counseling
• and more

Think of them as an extension of compensation. EAPs don’t replace health care, but they provide employees a wealth of knowledge and resources to improve their quality of life.

How did EAPs form?

In the early 20th century, Wall Street analyst Bill Wilson believed rampant alcoholism damaged employees and held industries back. His concern inspired him to form Alcoholics Anonymous, a proto-EAP that helped prepare the American workforce for an imminent manufacturing boom by giving affected employees focus.

In 1962, the Kemper Group followed Wilson’s blueprint to create the first true EAP. Its programming broadened the scope beyond alcoholism to address legal, marital and emotional issues. By the 1980s, EAPs expanded to cover a range of needs we still build upon today.

How do EAPs promote well-being and reduce financial stress?

While EAPs cover a lot of ground, managing financial stress is one of the heaviest hitters. It makes sense, given 90% of Americans say money problems have an impact on their mental health, according to a study from well-being platform Thrive Global.

No matter how well we compartmentalize, stress at home follows an employee to work (and vice versa). BrightPlan, an investment analysis firm, estimates the wave of employees’ financial stress costs employers nearly $200 billion annually. Unchecked, these issues spur disengagement, burnout and even turnover.

Unfortunately, employers can’t magically eliminate financial stress. Raises aren’t necessarily viable — or even a real solution. A LendingClub survey revealed almost half (49%) of people who earn over $100,000 a year live paycheck to paycheck. After all, earning a higher wage doesn’t come with a step-by-step tutorial to manage it effectively.

EAPs don’t offer quick financial fixes, but advice and practices to help your people secure their future. They range from direct access to financial advisers to workshops to help employees boost their financial literacy in a group setting.

Perhaps most importantly, EAPs demonstrate that you care about your employees’ financial well-being. This commitment to wellness goes a long way in:

• improving your culture
• cultivating your workforce’s trust
• creating a workplace where people can establish careers

How do I launch an EAP?

Each EAP is unique. Ideally, it should be informed by what your employees need.

According to SHRM, EAPs should always include a written policy and clear intent. These shouldn’t be included in your company’s operating procedures, as that could make it difficult to modify the policy when the need arises.

The Employee Assistance Professionals Association recommends all EAPs include procedures around:

• account management
• legal and regulatory compliance
• communication and training
• contacting quality local services
• varied methods of service (phone, online chat, etc.)
• websites and promotional materials available in multiple languages
• customized data reporting

Understandably, businesses may turn to an EAP service provider. If you go this route, SHRM recommends carefully considering the provider’s availability, years of service, follow-up services, credentials and training. Consider asking a prospective vendor:

• Does your EAP offer 24/7 support?
• How many total programs do you offer?
• Is there an easy way for my employees to learn about them?
• What’s the referral process like?
• Are there any prerequisites for employees to use them?
• Will the EAP be available on-site, or is there a physical location my team can visit?

Finding the right EAP can take time, but your employees’ well-being is always worth it.

How does Paycom help enhance EAPs?

While Paycom isn’t an EAP, we offer tools to help you convey information about your offerings and set employees up for financial success.

Beti^®, our employee-driven payroll experience, automatically identifies payroll errors. Then, it leads your people to resolve those issues before payroll submission, thus ensuring paycheck accuracy.

Pair it with Everyday™, our daily payroll experience, to give employees easy access to the wages they’ve already earned. It empowers them to get paid on a Vault Visa^® Payroll Card.* Combined, these tools help employees develop a better understanding of their pay while offering true financial flexibility.

Through our self-service app, your workforce easily can access the info about EAPs without having to wait for a response from HR. If they do need assistance, Paycom’s Ask Here tool automatically routes their questions to the best person in your organization to answer.

Explore Paycom’s single software to see how it helps you promote your EAP and boosts employee well-being.

*Please see Terms of Use. Employees generally receive their net pay within 24 hours of working, but some employees may receive their pay sooner. Some limitations may apply based on employer’s pay cycle, employee’s pay amount, timing of approvals or certain employer configurations. Employees start receiving net pay after they have earned enough money to cover their required deductions, taxes and benefits each pay period.

The Vault Visa^® Payroll Card is issued by The Bancorp Bank, N.A., Member FDIC, pursuant to a license from Visa U.S.A. Inc. and can be used everywhere Visa debit cards are accepted.

Opinions, advice, services, or other information or content expressed or contributed here by customers, users, or others, are those of the respective author(s) or contributor(s) and do not necessarily state or reflect those of The Bancorp Bank, N.A., (“Bank”). Bank is not responsible for the accuracy of any content provided by author(s) or contributor(s).