Pricing models of Employee Assistance Programmes: experiences of corporate clients serviced by a leading Employee Assistance Programme service provider in South Africa.
Pricing models is one of the sub-standards in programme design amongst the standards outlined in the Employee Assistance Programme Association of South Africa (EAPA-SA). According to EAPA-SA (2010:5), costing an EAP should be based on sound financial principles. Such costing will ensure the best possible application of financial resources with the objective of justifying the balance between expenditure and benefits. However, pricing is identified as a challenging area in the EAP field. Corporate clients are faced with a situation where EAP service providers bid for one contract, selling EAP services which are of a similar nature using varying pricing models with different prices. Such price competitiveness leaves the corporate client with no reason not to overlook the financial consequences of choosing one service provider over the other, since price becomes the critical deciding factor in purchasing decisions. The pricing issue in the EAP field and the impact on pricing models used prompted the researcher to pursue the study to understand the processes and complexities involved in the pricing models in the EAP field. The study focused on two samples which comprised of participants from corporate client who had terminated contracts with a leading EAP service provider, as well as participants from this leading EAP service provider.
The research findings indicate that contracting in the EAP field is a complex process owing to a number of factors that have to be considered before contracting. The complexity impacts strongly on the choice of the pricing model eventually chosen for contracting purposes. The views shared by both groups of participants indicate that there are internal and external factors that influence the choice of a pricing model. These are the factors that must be considered when making decisions as to what should be made available to employees and to the company for the effective implementation of Employee Assistance Programmes. Informed by these factors, the researcher developed a guideline that could be applied in practice as a standard EAP pricing model.