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The Hidden Costs of Caregiving

U.S. Business Loses from $17.1 Billion to $33.6 Billion Per Year in Productivity for Caregivers Who Take Time from Their Work Responsibilities

Online Calculator Available for Employers to Determine Costs

A new study from the MetLife Mature Market Institute® (MMI) reports that the cost to U.S. business due to lost productivity of working caregivers is $17.1 billion to $33.6 billion per year.

According to The MetLife Caregiving Costs Study: Productivity Losses to U.S. Business, produced in conjunction with the National Alliance for Caregiving (NAC), the average caregiver costs an employer $2,110 per year. For those caregivers providing the most intense levels of care, the cost per employee is $2,441, totaling $17.1 billion. The total annual cost for all caregivers is $33.6 billion.

The findings represent an increase of approximately $4 billion in both categories from 1997 when the study was first conducted. At that time, the productivity totals for both levels of care ranged from $11.4 billion (intense caregivers) to $29 billion (total caregivers). Based on data calculated from the NAC/AARP study, “Caregiving in the U.S.,” it is estimated that there are 15.9 million caregivers working full-time, 52% men and 48% women.

Employers large and small who would like to calculate how much caregiving costs their business in lost productivity each year, can log onto a workplace productivity calculator prepared in conjunction with the study at: www.eldercarecalculator.org. By entering the size of their business, an average hourly wage for employees and the number of employees who are working caregivers, employers will receive an instant productivity cost estimate.

“Working caregivers who juggle work and caregiving responsibilities make many workplace adjustments, such as coming in late or leaving early, reducing their work schedules or dropping out of the workforce entirely,” said Sandra Timmermann, Ed.D., director of the MetLife Mature Market Institute. “Employer costs related to caregiving are often hidden ones and can be significant. To stem the losses, employers should consider implementing eldercare programs for employees with a focus on individualized care planning and flexible work arrangements. It also helps when managers and supervisors are sensitive to caregivers’ needs; that sensitivity often leads to increased worker productivity.”

“With the legions of caregivers in the U.S., it’s not surprising that the burden is being felt in the workplace,” said Gail Hunt, President and CEO of the National Alliance for Caregiving. “Employers would help their organizations, their caregiving employees and their non-caregiving employees by putting assistance programs and accommodating work arrangements in place.”

In addition to the study’s main findings, the MMI also reports that for all levels of caregivers:

  • Of the 2.4% of employees who leave the workforce entirely to be caregivers (200,000 men and 184,000 women), the cost to replace them is $6.6 billion.

  • Absenteeism, reported by the majority of caregiving employees, costs $5 billion, while partial absenteeism, affecting virtually all working caregivers, accounts for nearly $2 billion in losses.

  • Workday interruptions, at least one hour per week per caregiver, cost $6.3 billion.

  • Having a crisis that requires attention during the workday is experienced by 60% of employed caregivers and costs $3.8 billion.

  • Other lost productivity costs include: costs for supervision ($1.8 billion), costs associated with unpaid leave ($3.4 billion) and those resulting from a reduction from full to part-time status ($4.8 billion).

Data from a number of national studies and surveys were used to research the MetLife study, including “Caregiving in the U.S.,” the Society for Human Resource Management’s 2002 “Staffing Metrics Study” and the MMI’s “Sons at Work” study (2003). The research team for the study was led by Donna Wagner, Ph.D., Director of Gerontology, Towson University. The NAC defined a “Burden Index” by assigning care levels from 1 to 5 with 1 being the lowest and 5 the highest. Based on the NAC’s 2004 study with AARP of U.S. caregivers, intense caregivers (Levels 3-5) are those who perform personal care tasks for an average of 12 to 87 hours per week; levels 1 and 2 are caregivers providing, on average, fewer than 10 hours of care per week.

The MetLife Mature Market Institute is the company’s information and policy resource center on issues related to aging, retirement, long-term care and the mature market. The Institute, staffed by gerontologists, provides research, training and education, consultation and information to support Metropolitan Life Insurance Company, its corporate customers and business partners. MetLife, a subsidiary of MetLife, Inc. (NYSE: MET), is a leading provider of insurance and other financial services to individuals and institutional customers.

Established in 1996, the National Alliance for Caregiving is a nonprofit coalition of national organizations that focuses on issues of family caregiving across the life span. The Alliance was created to conduct research, do policy analysis, develop national programs and increase public awareness of family caregiving issues. Recognizing that family caregivers make important societal and financial contributions toward maintaining the well being of those for whom they care, the Alliance’s mission is to be the objective national resource on family caregiving with the goal of improving the quality of life for families and care recipients.


The entire version of The MetLife Caregiving Costs Study: Productivity Losses to U.S. Business can be found at: www.maturemarketinstitute.com under “What’s New.” 

  Right at Home is a national organization dedicated to improving the quality of life for those we serve. We fulfill that mission through a dedicated network of locally owned providers of in-home care and assistance services.

 


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