BiGS Actionable Intelligence:
As a corporate consultant for more than 30 years and a professor at Harvard Business School, Joseph Fuller has seen the impact of “caregiving” on the workforce from many angles. That includes direct experience.
For several years, Fuller’s aging parents lived with him, his wife and their three young children. During that time, his father suffered a stroke, lost his ability to speak fluidly and later partially lost his sight. The family had the resources to handle the situation, but it did require his wife to step back from her career for a time to manage it all.
The experience underlined what Fuller’s research has also proven: caring for young children and elderly family members places a heavy burden on many families—and that has a direct impact on the workforce. At a time when many companies are having trouble filling jobs, addressing employee caregiving needs can make a measurable impact.
A report in January by Fuller and his colleagues at Harvard Business School called Healthy Outcomes shows that caregiving demands decrease employee productivity at work, impact turnover and “impose significant financial costs on employers.” By contrast, employers that invest in caregiving support benefits enjoy measurably favorable economic returns.
The question that preoccupies Fuller today is not how employees handle work-life balance, but whether companies will come to understand that failing to help workers manage caregiving responsibilities can have a direct financial impact.
“In a tight labor market, particularly for people with post-secondary credentials and high social skills, it's going to become increasingly important to get this right,” he told The BiGS Fix.
A major disconnect between employees and employers
Fuller’s research shows that there is a large disconnect between how employees and companies view caregiving. About 80 percent of the workers surveyed for the report said that caring for another person impacts their productivity. Ask employers the same question, however, and only 25 percent say it has an impact.
While the traditional solution for employers has been either to ignore the issue or to offer limited benefits, companies that offer innovative care benefits can make better hires, mitigate turnover and increase productivity and morale, the report shows.
“Investing in new benefits models that address the needs of caregivers is no longer a nice-to-have fringe activity,” the report said. “It is an essential investment in building a more stable and competitive workforce for the 21st century—one that guarantees a high return.”
The study analyzed data from 97 clients of Wellthy, an employee benefits provider that works with companies in the United States, Britain, Canada, and Ireland to provide benefit services targeted to help employees with caregiving responsibilities at home. Unlike a typical benefits provider, Wellthy acts as a sort of care concierge, helping match employees with providers and advisers.
The 21-month period studied showed a clear impact: Employer-provided caregiving benefits reduced employee turnover by one to seven percent and absenteeism by 10 to 50 percent. For employers, that added up to a return on investment of as much as 72 percent.
The COVID-19 pandemic: ‘pivot point’
While Fuller has studied the impact of caregiving responsibilities for years—he published his first report on the subject, The Caring Company, in 2017—he said the COVID-19 pandemic was a “pivot point” that made it clear companies had to make adjustments.
Historically, employees juggled caregiving responsibilities in silence. But when employees began working from home during the pandemic, more started to speak up and the demands of family life literally became visible to employers. As video business meetings became the norm, employers could see the rooms where their employees lived. Behind them, children played, aging parents convalesced, and the employees managed the chaos.
Faced with evidence of employee need, employers during the pandemic moved—often were forced—to allow people to work from home, grant more flexible and predictable work hours, schedule fewer in-person meetings, and reduce business travel.
“Generally, corporate America performed amazingly during that period,” Fuller said. “Companies introduced into the discussion a new deal, that work should be viewed through a lens of the employee's well-being.”
What was not discussed, Fuller said, is whether that deal would last as the pandemic receded. It is still too early to say how many companies have backtracked on the accommodations they made during the pandemic, Fuller said, but the data is not encouraging.
Of 53 major companies surveyed by S&P Global/AARP, 62 percent increased benefits and resources to their employees during the pandemic. But only 50 percent planned to continue offering backup childcare or elder care, and just 44 percent planned to continue to offer paid sick days.
HR: viewed through outmoded prism?
Fuller says that too many companies continue to view hiring, job roles, career paths and benefits through a decades-old prism that is no longer effective. The focus is often on costs while metrics like productivity and turnover are given far less weight. Companies that fail to embrace these metrics, he said, are not seeing the full picture.
“Companies don’t really understand their own economics, but they are convinced that they do,” Fuller told The BiGS Fix.
“You as a company ought to think about what the implications are for you,” he added. “If you're not taking into account systems effects like reduced turnover and improved productivity in your analysis of benefits, you're doing the math wrong.”