U.S. Employee Assistance Program Services Market - Industry Outlook and Forecast 2022-2027

U.S. Employee Assistance Program Services Market - Industry Outlook and Forecast 2022-2027

The U.S. employee assistance program services market is expected t grow at a CAGR of over 11% from 2022 t 2027

MARKET ANALYSIS

Employee Assistance Program (EAP) is a confidential program that assists employees in overcoming various life difficulties that may negatively impact job performance, health, or personal well-being t maximize an organization's success. Employees with personal and work-related concerns include stress, financial, legal, family, workplace conflicts, and alcohol and substance use disorders. EAP services majorly include assessments, counseling, and referrals. EAPs als frequently collaborate with upper management and supervisors t provide prior planning for organizational changes, legal issues, emergency preparedness, and traumatic event reaction.

EAPs refer t employees or resources that help with mental health challenges, substance abuse, financial planning, and work issues. Over the past year, EAP vendors have streamlined the referral process for counseling benefits. Many employers have increased the number of free counseling sessions for employees and their family members. EAPs als offer assistance with financial concerns and caregiving—tw of the most common sources of stress in employees' lives. It has been witnessed that 95% of large employers now provide access t virtual mental health counseling, or teletherapy, up from 69% in 2020 in the US. Allowing participants t meet with counselors in the most convenient ways—video, text, or via phone—removes a massive barrier t getting care.

The following factors are driving the market growth

• Growing Focus on Improving Employee Wellbeing
• Rise of the Information Economy
• Increase in Number of Working Hours
• Broad Shift in Assistance Perspectives
• Hike in Attrition in the US

COVID-19 IMPACT ANALYSIS

• It is n surprise that the COVID-19 pandemic has taken a toll on the workforce's mental, physical, and financial health. The pandemic has increased the need t address employees’ mental and physical health issues in an already challenged system. While businesses have found ways t physically protect their employees by providing tech support and introducing new leave policies, the disruption it has caused in mental assistance is expected t continue. The uncertainty around family, finances, health, and other concerns has created an environment brewing behavioral health issues.
• Health issues such as migraine and depression contribute t around 13% of the losses caused due t ill health at work, and there are high chances that it is caused due t mental pressure and stress. Owing t such factors, employers in the US face significant difficulties, such as lack of productivity and the need t hire, which eventually results in huge costs incurred for employers. As a result, employers in the country have become concerned about reducing these costs by providing assistance programs. This concept witnessed a significant boost by the end of 2020 when the economy started t rise again and offices began t open.
• Financial, mental, and physical assistance are directly linked. Financial stress, aggravated by COVID-19, is the leading cause of lost productivity, unplanned absences, lower job performance, and more significant distractions among employees. Financial stress impacts emotional and physical well-being. A financial literacy program is considered suitable for the company's bottom line. Improving financial literacy increases productivity boosts job satisfaction, and saves health care costs and turnover. Several vendors have introduced a financial assistance program due t the pandemic, coupled with modern digital solutions and human support, thus boosting the EAP services market.

OPPORTUNITIES & CHALLENGE ANALYSIS

Mental & Physical Health Awareness via Social Media Platforms

Several social media platforms are fit for various purposes and people. If Snapchat is widely popular amongst youngsters, LinkedIn can connect t a clan of professionals. Nevertheless, specific topics are relevant t the entire population irrespective of profession, background, interests, or culture, such as assistance, be it mental, physical, or both. Given the popularity amassed and the amount of time an average individual spends in a day scrolling through social media, it has perhaps become the best and the fastest way t spread awareness regarding mental wellness and physical assistance. Using relevant hashtags can turn a discussion int a trending topic, thus gaining popularity and the necessary attention from EAP service providers.

Constant Struggle for Employee Engagement and Participation

While assistance programs have been well-intentioned efforts by employers t create a better quality of life for their employees, there has been significant debate on whether they work due t largely unsuccessful assistance outcomes. This is either because participation is low or the level of engagement is negligible. Moreover, lack of awareness among employees is a significant issue. It is evident that even if there is a program in place for the betterment of employees, it does not guarantee employee participation if there is a lack of interest among the workforce. While incentives have solved the problem of involvement t a certain degree, these programs still seem superfluous as they d not necessarily improve employees' well-being due t lack of engagement.

Rising Demand for Financial Assistance

Often, employees are not motivated t fix their finances since it drains their energy. For such employees, incentives are a documented success in spurring behavioral change. T combat the well-behind lag of participation, corporates are ratcheting up the incentives offered in combination with assistance programs. They were unheard of half a decade ag but are now gaining popularity rapidly. Vendors are designing incentive programs that are in sync with the goals and objectives of the company. Modest financial incentive programs are mainly effective.

SEGMENT ANALYSIS

Insights By Service Type

The U.S. employee assistance services market is dominated by the demand for personal & work stress services, followed by mental health services. However, demand for financial wellness assistance is anticipated t grow significantly in the coming years. The consistency and success rate of these programs vary widely. With organizations grappling with rising health costs, standard programs are n longer sufficient t change the course of the growth trajectory.

• Service Type

Personal & Work Stress

Mental Health

Substance Abuse

Family Relationship

Health Education Services

Others

Insight By Delivery Model

Internal or external EAP models are the most common, with combination or blended models containing both components in variable proportions. Hybrid models give employees more options, adding t the richness rather than diluting the purity. EAPs are dynamic and uniquely adapted as a workplace resource t meet the needs of the current work organization it serves. There has been much discussion regarding the advantages of various EAP models. Still, it is widely agreed that the workplace is to complicated for pure counseling models, due t which hybrid models are gaining substantial market traction. In 2021, delivery by external vendors accounted for over 66% of the U.S. employee assistance services market share.

• Delivery Model

External Vendor

Internal Vendor

Hybrid

Insight By Interaction Platform

In 2021, the U.S. EAP services market was dominated by face-to-face interaction holding almost 90% share in the market. However, owing t the recent trend of working from home due t the COVID-19 pandemic, vide and telephonic EAP services have gained significant traction in the last tw years. Moreover, since WFH has become a new trend globally and in the US, the vide & telephonic employee assistance program services market is anticipated t grow at a significant CAGR during the forecast period.

• Interaction Platform

Face-to-Face

Vide & Telephonic

Mixed

Insight By Gender

In 2021, the EAP services market was dominated by women accounting for over 66% of the market share. This can be attributed t increased stress levels in women being reported more likely than in males. Moreover, when comparing married and single women, there appear t be differences in how they deal with stress. Women aged 35 t 54, wh are more likely t be juggling many jobs such as mother, caregiver for elderly parents, homemaker, and occasionally earner, are more stressed than men. Furthermore, as a result of all of these circumstances, it has been observed that women generate a more significant demand for EAP services.

• Gender

Men

Women

Insight By Industry

Employee assistance spending based on industries depends on the volume of the workforce, corporate profits, and the degree of deployment of programs, among other factors. Funding and time are considered the significant barriers t implementing these programs, irrespective of the industry's size. The outlook for corporate wellness assistance programs differs as well. While smaller businesses and non-profit organizations look at it more from a luxury, good-to-have perspective, more prominent end-users are implementing it as a necessity.

• Industry

Government

Media & Technology

Healthcare

Manufacturing

Colleges

Others

REGIONAL ANALYSIS

The US people pay more excellent prices from workplace stressors, in terms of health costs and perhaps mortality, than d workers in comparison t OECD countries in Europe. Expanding health insurance coverage, increasing awareness about workplace stress costs, and adopting family-friendly work policies more widely could considerably benefit US workers. Doing s could assist in lower exposure t workplace stressors, enhance the nation’s work climate, and lessen the health burden levied by U.S. workplaces. Midwest U.S. EAP services market accounted for the largest share in 2021

• Region:

South US

West US

Midwest US

Northeast US

COMPETITIVE LANDSCAPE

The EAP services market in the US is highly fragmented, with several small vendors operating. However, the market is witnessing consolidation, albeit at a slow pace.

Vendors are als looking at new ways t deliver corporate assistance programs using the potential of digital technology t host virtual screenings and offer information via company portals. Moreover, it is increasingly being guided by the roots of CRM as employers look t dynamically tailor their programs and provide an experience that is personal and individualized. For instance, targeting offerings based explicitly on employee health risks and conducting feedback surveys.

Over the past couple of years, however, the market has witnessed the entry of many external players, such as in-house services by large businesses and other entities in the health and fitness space that offer membership discounts t drive up their share in the market. Mergers and acquisitions are expected within the industry as players look t expand and become more comprehensive in their offerings. A trend witnessed among vendors in a landscape where consolidation is taking place is the focus on merging tw platforms. As prominent players join hands, resources are spent on connecting rather than innovation.

The leading market players include:

• ComPsych Corporation
• Canopy
• Continuum
• Empathia
• AllOne Health Resources
• KGA
• McLaughlin Young
• New Avenues
• SWEAP Connections
• LifeWorks
• Beacon Health Options
• Ceridian HCM
• My Secure Advantage
• Novant Health

KEY QUESTIONS ANSWERED

1. What will be the size of the U.S. EAP services market in 2027?

2. What is the growth rate of the U.S. employee assistance program services market?

3. Which segment accounted for the largest share of the U.S. EAP services market in 2021?

4. Which region is projected t have the highest growth rate in revenue generated from the EAP services market?

5. What are some of the latest trends that will shape the future of the EAP services market in the U.S.?