The Cost of Caregiving Employees
Ladan Nikravan - 12/27/11
Nearly 62 million Americans already care for another adult at least part time, an expensive and time-consuming undertaking their companies aren’t sponsoring.
In 2007, the Equal Employment Opportunity Commission issued guidance explaining the circumstances under which discrimination against workers with caregiving responsibilities might constitute discrimination based on sex, disability or other characteristics protected by federal employment discrimination laws. Yet, even with this guidance, according to “The MetLife Study of Caregiving Costs to Working Caregivers,” published in June, Americans who provide care for their aging parents lose an estimated $3 trillion in wages, pension and Social Security benefits when they take time off to do so.
“The percentage of adults — men and women — providing personal care and/or financial assistance to a parent has more than tripled in the past 15 years,” said Kathy O’Brien, a senior gerontologist for MetLife Mature Market Institute. “Currently a quarter of adult children, mainly boomers, provide these types of care to a parent.”
The cost is even higher for employers. In February 2010, “The MetLife Study of Working Caregivers and Employer Health Costs” stated that, using the average annual cost for a series of major health conditions — such as depression, hypertension and diabetes — reported by employees with eldercare responsibilities, the estimated average additional health cost to employers is 8 percent more for those with eldercare responsibilities. Extrapolating to the business sector, this 8 percent differential in health care benefit costs for caregiving employees costs employers $13.4 billion a year.
While this is stark, the costs don’t end there. “The MetLife Caregiving Cost Study: Productivity Losses to U.S. Business,” published in 2006, stated the estimated cost to employers in productivity losses for all full-time employed caregivers is estimated to be $33.6 billion annually. These costs include costs associated with replacing employees, absenteeism, crisis in care, workday interruptions, supervisory time, unpaid leave and reducing hours from full to part time.
O’Brien said for women, the total individual lost wages due to reducing work hours because of caregiving responsibilities is estimated at $120,616. The total in lost Social Security benefits is estimated at $64,443. The total cost equals approximately $185,049, without factoring loss to pension.
While this problem persists elsewhere, it’s most prevalent in the United States. For example, while 74 percent of highly-qualified women in Japan voluntarily quit their jobs, according to the 2011 Center for Work-Life Policy study “Off-Ramps and On-Ramps Japan: Keeping Talented Women on the Road to Success,” few do so for care giving reasons.
“Neither childcare nor eldercare pull Japanese women off their career tracks with the same force as in the U.S. or Germany,” said Laura Sherbin, senior vice president for the Center for Work-Life Policy. “Only 32 percent of Japanese female college graduates cited childcare as an issue in their decision to quit their job, compared to 74 percent of U.S. women and a whopping 82 percent of German women.”
This may seem surprising, as the scale of female exodus is massive in Japan, especially when compared to the U.S., where just 31 percent of highly qualified women voluntarily quit their jobs, and Germany, where 35 percent of women do so.
“Japanese women are pushed out by rigid work schedules and unsupportive employers who are reluctant to create career development opportunities for women,” Sherbin said.
According to Sherbin, while childcare and eldercare are not the driving forces behind their leaving their jobs, Japanese women face many of the same challenges as their counterparts elsewhere when considering leaving their jobs: the perception that their skills are rusty; a stigma attached to a gap in their resumes; a bias against middle-aged women; and the assumption that returning mothers will devote their attention and energy to their children rather than their work.
“Forty-four percent find their salaries cut or, if not subjected to an outright reduction in pay, are reassigned to jobs with fewer opportunities for advancement and concomitant salary hikes,” Sherbin said. “Fully 40 percent are forced to accept decreases in management responsibilities, lower job titles or reductions in overall job responsibilities.”