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The Caring Company Revisited

In January 2019 the Harvard Business School produced a study, “The Caring Company”. That study delved into how employers can help employees manage their caregiving responsibilities — while reducing costs and increasing productivity. Obviously, with Covid things needed to accelerate, and they did!

The study covers a plethora of caregiver costs due to turnover and decreased organizational productivity. Turnover entails costs for recruiting, retraining, and replacement. It causes a loss of institutional knowledge and dilutes the labor force. The cost of temps to fill in is high and the performance sub-optimal. Team productivity is always degraded by disruption. Caregiving duties cause absenteeism, presenteeism, unexpected events, and shifting workloads.

Rarely are care-driven events adequately tracked, let alone the effects measured. (The limited exception has been for maternity and adoption, primarily due to the FMLA (Family and Medical Leave Act). Not surprisingly there are disconnects between the employer and the employee. One of the most striking is the emphasis employers put on leave policies. Even when paid (not the rule in the US, unlike other OECD countries), employees are afraid to use it. The paradox is that this disconnect exacerbates problems for both. Generally, employers underestimate the impacts, don’t manage (organizations or benefits) appropriately, and suffer higher costs as a result.

“Just over a third of all employers surveyed (38%) believed caregiving responsibilities had no impact on employee performance at their organization. Another 38% were on the fence are professed not to know. Only 24% recognized the caregiving had a direct impact on their workers performance.”

Because employers don’t conduct a “Care Census” they essentially ‘fly in the dark’ and don’t understand the extent of all the costs that they incur. Examples include:

  1. Employers think care is limited to birth and adoption – it is not.
  2. 73% of employees report having current caregiving responsibilities.
  3. The self-professed caregivers say caregiving harmed their careers. (They cited; fewer challenging assignments (54%), lower compensation (50%), and poor career paths (46%).)
  4. 32% of all employees voluntarily left a job due to caregiving responsibilities.

 

There are second order consequences because it disproportionately impacts employees with more current skills and deeper experience.

  1. Caregiver Churn is concentrated in younger workers, 50% of 26–35-year-old employees had already left a job to give care.
  2. Caregiving disproportionately effects women at all ages.
  3. Caregiver Churn correlates with responsibility – both at the job and in the home. The higher the title, the greater the churn.

 

All of these were important for demographic reasons pre-covid and had already cemented predictable future problems.

  1. The labor force was already shrinking due to an ‘aging boom’.
  2. Morbidity was rising along with the costs of controlling chronic illnesses (diabetes, opioids, etc.)
  3. Productive Life spans had decreased, and caregiving burdens increased as a result.
  4. A falling population replacement rate meant no demographic relief for the foreseeable future.
  5. An ever-increasing, technology driven, skill mismatch was outpacing the educational system.

 

Then there was Covid – and a fiscal ‘bridge’ from the Federal Government to mitigate widespread financial stress mid-2020 to mid-2021.  Unfortunately, the pandemic was longer than the ‘bridge’. Fortunately, it did provide time for people and employers to adjust, and both found ways to do that.

Employers sought to keep their people safe and were compelled to address the broad range of caregiving situations their employees face. Childcare was no longer limited to birth events. Daycare and classrooms moved back into homes. Senior living situations for employees’ parents were rendered unsafe. Employees’ homes converted into hospital wards if family members got sick. All these ratchetted caregiving burdens up several notches rapidly.

Employers sorted, and continue to sort, themselves into those who could and did demonstrate a “Caring Culture” vs. those who could not or did not demonstrate it effectively. Innovative CEOs adjusted and enabled employees to strike work-life balance regardless of where they work. They protected their career paths. The protected physical spaces. They ramped up telehealth and mental health support. They understood the stresses of zoom fatigue, skeleton staffing at the office and/or front-line, and problems of working from home when everyone must be at home.

Some employers looked, listened, and found paths to support employees. Others looked but could or did not find effective paths. The “Great Resignation” clearly underscores the drawback of not finding effective paths. With a labor force that is 2.5MM less than pre-pandemic levels and 3.6MM more job openings than unemployed workers, there is a substantial short and long-term labor shortage and mismatch.    

That shortage is further exacerbated by the disproportionate caregiver impacts on women and people with higher titles. Pew research reveals that by 2021, 46% of women had bachelor’s degrees vs. 36% of men. Historically the education gap widens for advanced degrees. By ignoring caregiving issues, companies are disadvantaged when recruiting in an increasingly tight talent market.  People with higher titles are core to the corporate pool of experience. Losing these people damages productivity and dilutes institutional knowledge.

The bottom line: If the costs were unrecognized and high pre-pandemic, now they are recognized – and higher. Supporting employee caregivers doesn’t need to cost more, but it can be difficult to scale. That takes leadership and a “Culture of Care”.

J Heywood E Sloane
Principal, DSG
 

 

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