Keeping Productivity High in an Eldercare Era
The costs of eldercare are staggering, according to a recent ABC News/USA Today series on the subject. And those costs are not limited to governments or individual families. They spill over into the workplace, especially in the form of productivity problems. In fact, a report from MetLife – the Caregiving Cost Study: Productivity Losses to U.S. Business – estimates that annual business productivity losses associated with working caregivers total more than $33 billion (Dobkin, 2007). That’s up $4 billion over the last decade, and future losses are expected to run much higher.
This trend is clearly linked to the fact that large numbers of working Baby Boomers, who are growing older themselves, are facing eldercare obligations. About 53% of all working caregivers are adult children over the age of 50 caring for their parents (Joint Economic Committee, 2007). And, as more Baby Boomers themselves require care in coming years, a very large eldercare burden will fall to their children, who comprise a smaller group of potential caregivers.
There’s also an expanding share of employees “sandwiched” between two generations, with one in 10 taking on both eldercare and childcare responsibilities (Pinto, 2007). A 2007 ComPsych study found that from 2006 to 2007, this group showed more than a 7% increase in weekly hours spent on combined care, while their absenteeism rate shot up 22% (Hudson, 2007).
Altogether, over a third of U.S. workers (35%) are coping with eldercare demands each year, according to Work and Family Institute president Ellen Galinsky (“Workplace Flexibility,” 2006). But unlike the largely unemployed caregivers of the past, nearly 60% of today’s eldercare givers are employed, with 53% sustaining full-time workloads. And at least 30% of the people in this group are men, many with managerial and executive responsibilities (MetLife, 2006).
Eldercare productivity losses stem from many sources, and they add up quickly. The MetLife study sets total annual eldercare business costs per employee at $2,441, reflecting losses incurred through absenteeism, crisis management, unpaid leave, and employee replacement or a shift from full- to part-time work. Annual absenteeism costs for female caregivers were shown to be four times that of male caregivers: $2 billion compared with $500 million. Worry and exhaustion also slow down productivity, of course, as does extended phone time spent resolving eldercare arrangements. Breaches in caregiver performance can have a ripple effect, stalling teamwork and the productivity of co-workers (Dobkin, 2007).
Employers can also expect eldercare demands to alter retirement decisions. A John Hancock study shows that 12% of eldercare givers have already left the workplace, and analysts predict the trend will accelerate (“Long-Term Care,” 2007). Some are suggesting that emotionally charged long-term-care burdens – fueled by an expected rise in dementia patients, early hospital releases and a lack of long-term-care insurance – could result in very costly attrition rates (Pinto, 2007).
Alternatively, workers struggling with steep eldercare expenses may be compelled to delay retirement. A 2006 Putnam Investment study found that nearly one-quarter of those taking on eldercare expenses – or more than three million working adults – say the financial outlay will delay their retirement or deplete their savings. Nearly half of such providers are paying out $1,000 or more per month (“Long-Term Care,” 2007; “The ‘We Generation,’” 2006). And stringent state asset-transfer penalties are preventing the use of Medicaid for long-term-care coverage until patients’ savings are gone, drying up inheritances originally intended for adult children (Connolly, 2006).
When eldercare givers do stay in the workforce, many may claim unfair treatment. Studies show that most Baby Boomers who delay retirement to bankroll eldercare expenses do so wholeheartedly and with a strong sense of obligation. So showing bias or intolerance toward these caregivers could result in costly litigation that falls under the heading of family responsibility discrimination (FRD). Though FRD is not an official EEOC category, employees can seek redress for perceived “eldercare discrimination” by filing complaints under various statutes, including the Family and Medical Leave Act (FMLA) and the Americans with Disabilities Act, which protects caregivers of disabled people. Experts warn that HR workers will have a daunting task tracking intermittent and emergency leave frequently taken by workers shouldering eldercare tasks. That means FMLA infractions will be difficult to prove (Pinto, 2007).
Rather than dealing with caregiver productivity issues from a strictly legal perspective, employers have the option of providing working caregivers with low-cost/high-impact HR supports. Dovetailing with overall work/life balance strategies, the goal is two-pronged. First, reduce the stress on caregivers to boost their performance and keep productivity losses in check. Second, show compassion to promote loyalty and retention.
Traditional resource information-and-referral benefits, offered by 21% to 33% of companies, barely scratch the surface of the eldercare problem (“Workplace Flexibility,” 2006). Other supports may include providing workers with flextime schedules, backup care and dependent-care accounts. Prudential Financial, Inc., for example, offers co-pay plans for in-home geriatric case assessments and free legal services to handle estate planning and living wills, and Unilever provides a free “concierge service,” which helps repair the homes of workers’ aging parents who live at a distance. (McQueen, 2006; Roberts, 2006). Private financial advisory firms and eldercare robots are two emerging self-help tools that may well supplement company perks (Richards, 2007; Thomas, 2007).
Getting caregivers to use such supports, however, could be an HR challenge. Analysts report that workers often fear they’ll lose their jobs or be passed over for promotion if they identify themselves as caregivers. This keeps employee involvement in eldercare programs at a low 2% to 3% annually. So, managers not only have to provide the right programs but also have to relieve worker anxieties about caregiver bias. If employers can achieve this, they will become more likely to reap long-term productivity benefits over what some are now calling the “eldercare decades.”
For more information:
See the institute’s Graying of Society Knowledge Center, which contains a newly written Highlight Report and a newly updated series of PowerPoint slides. Also see i4cp’s The Generations at Work and Retirement Benefits Knowledge Centers.
For a PDF version of the MetLife Caregiving Cost Study, click here.
For an ABC.com article called “Role Reversal: The High Cost of Elder Care,” please click here.
For an ABC.com article called “Firms Help Workers Care for Parents,” please click here.
Documents referenced in this TrendWatcher include the following:
Connolly, Jim. “DRA Could Bite Boomers on Parents’ LTC Needs.” National Underwriter, June 26, 2006, p. 32.
Dobkin, Leah. “How to Confront the Eldercare Challenge.” Workforce Management. Obtained June 20, 2007.
Hudson, Jennifer. “Caregiver Absences Jump 22 Percent in 2007, According to Personal Time Index by ComPsych.” ComPsych, April 17, 2007.
Joint Economic Committee. “Economic Fact Sheet.” May 16, 2007.
“Long-Term Care Expenses Impact Savings of Future Retirees.” Pension Benefits, January 2007, p. 9.
McQueen, M.P. “Employers Expand Eldercare Benefits; to Reduce Absenteeism, More Companies Offer Time Off, Insurance, Home Aids to Caregivers.” Wall Street Journal, July 27, 2006, p. 1D.
MetLife Mature Market Institute. The MetLife Caregiving Cost Study: Productivity Losses to U.S. Business. Westport, CT: MetLife, 2006.
Pinto, Consuela. “Family Responsibility Discrimination: New Claims Battleground.” IOMA’s Report on Managing Benefits Plans, February 2007, p. 1.
Richards, Justin. “Robotics Could Ease Care Burden of Ageing UK Population, Says Expert.” Computer Weekly, May 8, 2007.
Roberts, Sally. “Employers Expand Assistance Offerings to Include Eldercare.” Business Insurance, June 19, 2006.
Thomas, Trevor. “Handling Details for Seniors Could Be Coming Opportunity.” National Underwriter, March 19, 2007.
“Workplace Flexibility Pivotal to Easing Employees’ Eldercare Concerns.” IOMA’s Report on Managing Benefits Plans, July 2006, p. 9.
“The ‘We Generation’” Supporting Elderly Parents and Retired Children Brings Retirement Surprises for Many.” Business Wire, November 16, 2006.