The key to high performance: EAPs can and must change the dialogue from how they can reduce behavioral health claims to how they can deliver value as a tool to maintain and improve the performance of the workforce.

High-performance companies require high-performing people to identify and capitalize on market opportunities that deliver customer and shareholder value. While these words may seem as "apple pie-ish" as "Our employees are our most important assets," the stark reality is that these words have never been more true.

The competitive landscape is intense. Each and every business expenditure is being scrutinized. The world and the nature of work are changing taster than most of us can imagine. And in this post-industrial era, it's all about people--a company's human capital. What matters today is not whether a company's machines are bigger or faster than another's, but whether its people are more creative, more customer service-oriented, and more productive.

The challenge, then, is how best to maintain and improve the performance of the workforce. Here's the good news: most organizations possess a hidden asset that, if well leveraged, can help foster high-performing people and high-performance companies. That hidden asset is an employee assistance program.

PEOPLE AS PROFIT LEVERS

Human capital is on the radar today like never before. In a study conducted by CFO Research Services, chief financial officers clearly identified the critical role people (i.e., human capital) play in company performance. More than 90 percent noted that human capital is a critical factor in, or has a large effect on, customer satisfaction, 82 percent said human capital has a similar effect on profitability, and 72 percent identified a link between human capital and innovation and product development.

Increasingly, CFOs are quantifying and analyzing all of the investments their organizations are making in their human capital. This represents both a challenge and an opportunity, as each investment will receive sought-after attention from senior management hut will also have to demonstrate a return on investment (ROI) in both hard and soft dollars. The bottom line, from a CFO's perspective, is that every function involved in managing the health and productivity of human capital human resources, benefits, wellness, medical, etc.--must derive maximum value from every dollar invested, whether those dollars are invested in health care, paid time off, training and development, and/or pay for performance.

The complexity and intensity of the human capital management challenge highlights the need for sophisticated management solutions. As Jac Fetz-enz of the Saratoga Institute noted, "People are profit levers. All other assets are passive resources that require human application to generate value."

This point is driven home by Figure 1, which depicts the various pressures being exerted on an organization's ability to perform, and perform well. The pressures are significant, as the following points illustrate.

Global competition. Global competition is demanding more goods and services for less money. The spread of technology, the low relative cost of labor outside the United States, and improved quality throughout the globe are changing the dynamics for companies large and small. Profits are being squeezed, and organizations are becoming highly disciplined in controlling their costs.

Shortage of talent. Companies are waging war against each other for the one asset that can help them achieve a competitive advantage and earn a profit in an environment of intense global competition--talent. Impending shortages of skilled and non-skilled workers will escalate this war dramatically over the next decade.

Reduced workforce availability. The U.S. workforce is aging rapidly The number of people aged 55 to 64 will increase by 74 percent in the next 20 years, but age- and illness-related absence and disability will reduce their availability for work.

Rising benefits costs. An aging and increasingly ill and injured workforce will drive up healthcare and other benefits costs. Many of today's leading health problems, such as arthritis, depression, and musculoskeletal disorders, are less life-threatening than they are lifestyle-and productivity-threatening, but they are complicated and made more costly by biopsychosocial risk factors such as stress and physical inactivity.

Human capital management. Higher benefits costs not only affect global price-competitiveness but also divert funds away from investments needed to acquire, develop, reward, and keep talent. Ultimately, investments in human capital must ensure that employees

are--

* Capable and confident in their ability to perform their jobs;

* Managed well in the performance of their jobs;

* Rewarded when they do their jobs well (and not if they don't); and

* Healthy enough to show up at work and to work well.

HEALTH AND HUMAN CAPITAL

No matter where employees work a manufacturing plant, an office building, a store, a call center, or their homes--employers need them to show up and perform well. Health, broadly speaking, can either prevent or enable this. Understanding the relationship between health and performance requires that organizations use integrated human capital data to point the way.

First, companies can look at measures such as short- and long-term disability, workers' compensation, and healthcare costs as indicators of the health of their human capital. These measures can serve as an early warning system for performance problems that can affect production, sales, and distribution. Analyzing these measures requires looking at integrated data on an operational or, better still, person-centric basis to pinpoint both the medical and non-medical drivers of excess cost and reduced performance. In this way, work organizations can move beyond treating the symptoms of poor health to tackling the root causes--for, as EA professionals know, the presenting problem frequently is not the underlying problem.

In the case of absence or disability, for example, the real drivers may turn out to be factors tied to the workplace, such as policies, practices, culture, or management, or to the family, including marital relationships, child and/or elder care, parenting, and so on. It is through this systematic, data-driven approach that organizations can begin to address issues of health and human capital and achieve improved results.

EA professionals understand the complex interrelationship of lectors that play a role in individual, work team, and organizational health and performance. Best of all, they understand this interrelationship from a systems level perspective. The skills and experience that EA professionals regularly apply at a person-centric level--problem identification, referral, ongoing case management, and issue resolution--are the same competencies that, when applied at an organizational level, cart be used to address cost and performance issues

The true value of RAPs has been lost in the muddle of managed care over the past several years. As many others have noted, a "commoditized" RAP product whose value has been narrowly defined as a behavioral health cost management tool is subject to the harshest of competition on a per-employee, per-month cost basis. On the other hand, an EAP that is a critical piece of an overall human capital management strategy represents a viable and worthwhile business solution.

To forge such an identity, EAPs must change the dialogue from how they can reduce behavioral health claims to how they can deliver value as a tool to maintain and improve the performance of the workforce--i.e., they must show how they can keep people at work, functioning at higher levels. In so doing, they should make the case for their contribution to cost management across all medical costs, as well as lost time and lost productivity

This identity opens up a variety of approaches for EAPs to deliver value, as the following paragraphs make clear:

Performance management. EAPs can address issues before they become problems that decrease an individual's effectiveness at work. When a problem does affect performance, EAPs can serve as a resource for employees and managers/ supervisors to resolve the situation in a manner that reaps the greatest return in the shortest time frame.

Organizational effectiveness. By analyzing utilization rates and presenting and underlying problems, EAPs can pinpoint issues related to work team conflict, inappropriate supervision, poor alignment of resources with stated objectives, or other concerns that are, or soon will be, dramatically affecting performance and business results. Critical incidence management is just the tip of the iceberg here.

Absence, FML, and disability management. EAPs can both prevent absences and shorten their duration by addressing the psychosocial issues that are creating, complicating, or extending the need to be away from work. EAPs are vastly underutilized in this area.

Complex case management. EA professionals can use their case management skills to manage individuals dealing with myriad comorbid conditions. EAPs can navigate the healthcare system and coordinate care, not just for behavioral health conditions, but medical/surgical ones as well.

Disease management. EAPs can help improve utilization of, and compliance with, treatment regimes by individuals with chronic conditions (such as heart disease, diabetes, and asthma) by addressing the psychosocial issues that complicate their ability to manage their conditions.

REAPING THE REWARDS OF EAPS

While many work organizations do not derive full value from their EAPs, demand for the services they can provide is on the rise. David J. Hay, a workforce effectiveness consultant, has noted that more and more employers are recognizing that "EAP services are a low-cost, high-value asset that can make a substantial contribution to supporting human capital." He says many of his clients have prepared position papers that show how EAP services can be aligned with, and contribute to, their business mission.

"Cross-functional meetings are being held to explore opportunities for increasing coordination and integration among functions and related vendors," flay says. "Talk is turning into action, and sound action is yielding solid results."

Following are some key steps to follow to better leverage and reap the rewards of EAPs as part of an integrated human capital management effort:

1. Set Targets

Determine the work organization's core values and business priorities. These might include integrity, customer satisfaction, quality, safety, total shareholder value, or return on capital employed.

2. Establish a Baseline

Determine the key human capital metrics and cost/performance drivers, such as revenue per employee, productivity per employee, total benefits cost per employee, and lost time per employee.

3. Develop Strategic and Tactical Plans

Determine the strategic imperatives for the organization and identify how the EAP can play a substantive role through initiatives such as total rewards, total absence management, integrated care management, and talent management.

4. Align Resources

Determine the key stakeholders (both internal and external), clarify roles and responsibilities, and reinforce accountability through incentives, policies, and plan design. Stakeholders and responsibilities might include occupational health, risk management, safety, human resources, organizational development, labor relations, group health, training, and health management.

5. Measure and Evaluate

Monitor and demonstrate progress toward business outcomes through integrated analysis of data, then refine strategies and tactics based on results. Evaluating data on a person-centric basis and conducting Pareto group analyses offer the best opportunities to identify the root causes of issues that affect business performance.

6. Communicate, Communicate, Communicate

Share the value of the EAP with all stakeholder groups and sustain communications through good times and bad, not letting confidentiality prevent greater utilization of, and value creation by, the EAR This involves communications with operational leadership, managers and supervisors, functional leaders, vendors, employees, and family members. A deliberate effort may be necessary to reframe underlying beliefs about "employee assistance," especially if leaders consider an EAP's mission related primarily to employee care and advocacy during difficult times. If, conversely, they recognize gAPs as proven tools to help employees function as they cope with work- and life-related challenges, they will use the EAP accordingly EAPs have the potential to be a vital piece of the human capital management puzzle. Positioning them as a strategy to protect your company's human capital investment and increase the value of that investment is the first step. Delivering the goods is the next!

Howard Kraft is vice president of the Human Capital Consulting Practice at the Benfield Group, a healthcare consulting firm in Connecticut. Prior to joining Benfield he served as a senior consultant in the Health and Productivity Management specialty practice at Mercer Human Resources Consulting. He can be reached at [phone] or at [e-mail].