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How employers can help employees manage their caregiving responsibilities — while reducing costs and increasing productivity
“The Caring Company,” authored by Harvard Business School Professor Joe Fuller and Managing the Future of Work Project Director and Senior Researcher Manjari Raman, is an important and timely examination of how people providing care to family members or friends are faring professionally, how these responsibilities are affecting them at work, and the shortcomings and future implications of employers failing to support caregivers.
Companies are facing a caregiving crisis — they just refuse to acknowledge it. Rising health care and professional caregiving costs and changing demographics over the past few decades have put great pressure on American employees as they try to balance work and care responsibilities. Unfortunately, many employers remain largely oblivious to the growing costs of this hidden “care economy” — costs that hurt employers and employees alike.
Based on a nationally representative survey, the report shows how important and urgent an issue this is and provides common-sense solutions for how employers can support their employees who are providing important care to family and friends.
American companies are facing a caregiving crisis — they just refuse to acknowledge it. Rising health care and professional caregiving costs and changing demographics over the past few decades have put great pressure on American employees as they try to balance work and care responsibilities. Yet many employers remain largely oblivious to the growing costs of this hidden “care economy”—costs that hurt employers and employees alike.
While companies spend money, time, and effort on providing benefits, often those benefits are of little use to employees. By not offering benefits that employees actually want — and by not encouraging employees to use the benefits they do offer—companies incur millions of dollars of hidden costs due to employee turnover, loss of institutional knowledge, and temporary hiring, in addition to substantial productivity costs such as absenteeism and presenteeism.
The spectrum of care, from childcare to eldercare, ranges across every demographic in the organization. Workers of all ages and levels of seniority are affected. Given the lack of support at work, many employees hide the growing burden of caregiving responsibilities. They struggle to balance the responsibilities of work and caregiving, often dealing with the unexpected and recurring care obligations that require mental, physical, and financial resources to address them. Individual productivity suffers accordingly, inflicting a cost on the employer. Then, when the emotional and physical stress becomes too much, their capacity for work becomes impaired. Some respond by reining in their ambitions; others reduce their working hours; still others drop out of the workforce altogether. Eventually, employers often pay another major cost: They lose talented, trained employees.
This neglected care crisis is only going to worsen. The frequency and intensity of care obligations are sure to increase, putting more pressure on employees and employers in at least three ways. One, with the rising number of single-parent, two working parents, and other non-traditional families, employees have fewer resources to turn to as they shoulder greater caregiving responsibilities. Two, both women who work outside the home and those who work within the home shoulder a disproportionate share of caregiving responsibilities. That impedes them in several ways: in their ability to participate in the workforce as traditionally defined, in their ability to remain in the workforce, and in their ability to maximize their level of achievement in the workplace. All that depletes the talent pool of educated, experienced, and productive resources. Three, as more Americans enter the “sandwich” generation — in which they will provide care for both children and seniors simultaneously — the physical, emotional, and financial burdens of workers entering their prime earning years will grow markedly.
Many employers remain strangely unaware of the magnitude and impact of the changing demographics of care and their economic consequences. Surveys of U.S. employer and employee attitudes about caregiving reveal that there is a gross misalignment between what companies currently provide and what employees need. Consider the findings:
Employers do not measure and thus do not realize the extent to which employees are burdened by care: Many employers (52%) do not track data on their employees’ caregiving responsibilities. Few employers, therefore, know the significant impact that caregiving has on the productivity of employees. In the employee survey, three out of four (73%) employees reported having some type of current caregiving responsibility.
In the absence of a supportive “care culture,” employees worry that admitting to caregiving responsibilities penalizes their career growth: Few employees are willing to admit to their organizations that they are caregivers for fear that it will undermine their career prospects. Among self-professed caregivers, only 28% were willing to admit that caregiving harmed their careers. These caregivers perceived harmful consequences, such as demotivation due to a lack of challenging assignments (54%), lower salary increases or bonuses (50%), and an unsatisfactory career path (46%).
Employers do not realize the extent to which caregiving affects employee performance: Only a minority of employers (24%) responded that caregiving influenced workers’ performance. In contrast, more than 80% of employees with caregiving responsibilities admitted that caregiving affected their productivity — specifically, their ability to perform their best at work all the time (33%), most of the time (14%), and sometimes (36%).
Employers grossly underestimate the direct and indirect costs of caregiving: The employee survey revealed that 32% of all employees had voluntarily left a job during their career due to caregiving responsibilities. Caregiving contributed greatly to the churn of younger employees: 50% of employees aged 26−35 years and 27% of employees aged 18−25 reported that they had already left a job due to caregiving responsibilities. The costs of turnover, when combined with the costs associated with reduced productivity, combine to form a substantial hidden cost of care for many employers.
Employers’ higher-titled and more responsible employees are most likely to be affected: Within each of the age groups 18−25, 26−35, and 35−45, many more employees with titles like vice-president and higher had left a position due to caregiving conflicts. For example, in the 26−35 group, the percentage of people who had left a position rose higher at each position level: employee (23%); manager of employees (44%); manager of managers (53%); senior leaders (61%). Likewise, these age groups and positions were most likely to report that their productivity was frequently undermined.
Employers underestimate the spectrum of care responsibilities affecting the different demographics in the organization: Caregiving obligations arise with metronome-like regularity during an adult’s working life. Employees cited caregiving in different stages of their careers. Employers frequently placed significant focus on maternity and adoption events. While the top reasons employees cited for leaving an organization were to take care of a newborn or adopted child (57%), followed by ensuing events like caring for a sick child (49%) or managing a child’s daily needs (43%), the consequences of care went far beyond child-rearing. A third of employees who left a position reported taking care of an elder with daily living needs as a reason for leaving their job. Almost 25% did so to care for an ill or disabled spouse, partner, or family member.
Employers know that caregiving impedes employees’ careers: Employers identified unplanned absences and missed days of work (33%), late arrival at work (28%), and early departure from work (17%) as the top three behaviors that always undermine career progression. Those are all behaviors that frequently arise due to an employee’s need to respond to a caregiving obligation.
Employers do not provide the benefits that are valued by employees: Across 16 benefits examined, usage patterns were consistently and often woefully low. The benefit with the highest usage reported by employers was for paid time off, yet only 55% of eligible employees utilized the benefit, and only 59% of all employers surveyed offered the benefit. The most significant factors that contributed to workers quitting were: the unaffordable costs of paid help (53%); the inability to find trustworthy and qualified paid help (44%); the inability to meet work responsibilities due to increased caregiving responsibilities (40%) — all areas where employers could conceivably provide guidance, infrastructure, or support. Companies can and must do better — for themselves as well as their employees.
Employers must view the issue of caregiving through the lens of talent management, rather than exclusively as another potential expensive benefit. Moreover, they must accept that the tension between work and caregiving expresses itself both financially and culturally within the organization. Companies incur substantial and recurring costs due to a failure to account for their employees’ caregiving obligations in terms of designing career paths, job descriptions, and benefits packages. Similarly, companies that do not acknowledge the near-universality of care concerns in their workforce create a culture in which employees are reluctant to make their caregiving obligations too apparent lest they pay a price for the disclosure.
In a “caring company,” management will have to demonstrate commitment both by acknowledging its employees’ care concerns and by investing in innovative solutions. It will require buying into a culture of care, an investment that goes beyond dollars to include time and leadership. By highlighting success stories and putting genuine effort into communicating with the workforce, providing benefits that address the actual needs of colleagues, and ensuring their utilization, caring companies can greatly enhance the effectiveness of their talent management.
Companies can make a start by conducting a regular care census. This critical first step would be to identify the magnitude and nature of a company’s workforce’s care needs; evaluate the relevance of its existing benefits package, and explore the plausibility of expanding the benefits or developing customized solutions; and to capture the returns associated with boosting employee retention and productivity. A care census would also help the company update its standard career paths to reflect the life paths of 21st-century employees. Such an approach would help employees better accomplish their predictable and unpredictable life events, while allowing companies to manage their talent pipelines more productively and predictably.
Committing to a caring company strategy and designing the tactics required to execute it well should be neither hard nor, ultimately, costly. The marginal return on investment, when calculated to include the all-in economics associated with reduced turnover and improved productivity, places a care-led strategy well within the reach of many companies. For caring companies, the care advantage goes well beyond improving employee engagement. It has the potential to be an important source of competitive advantage.
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