The brief era of pandemic perks is over.
In what is now being called the “post-pandemic economy,” fears of recession and a heightened emphasis on productivity have led employers to revoke many of the benefits they used to attract and retain employees during “The Great Resignation.” This reversion to the old status quo range from major shifts (like rolling back pandemic pay raises) to cutting smaller perks (like paid laundry services and a monthly day off) that helped workers feel appreciated .
Thus, it comes as no surprise that Care.com’s 2023 Future of Benefits Report summarizing research with 500 US-based Human Resources leaders and professionals reveals that 95% are recalibrating their companies’ benefit strategies and 47% are trimming overall employee benefits in 2023.
But the real story lies in the choices they are making about where to cut versus where to invest. An almost identical percentage of companies in our study – 46% – are prioritizing childcare benefits more in 2023 (trailing only retirement plans as the most popular benefit to prioritize this year), and 43% are prioritizing senior care benefits. Rather than cutting back on all offerings, employers are recalibrating, continuing to invest in caregiver benefits.
Caregiver Benefits are Smart, not just Right
This continued focus on caregiver benefits is driven as much by the need to mitigate risk as it is to maximize rewards. After all:
- More than one in four families with children under the age of five are still struggling to find consistent childcare, and in the past few years, nearly 20% of working parents had to leave work or reduce their work hours solely due to a lack of childcare.
- $3 billion in revenue is lost annually due to employee absenteeism as the result of childcare breakdowns.
- Turnover as a result of lack of childcare costs businesses 20% of an hourly employee’s salary and up to 150% of a manager’s salary.
If employers are recognizing the need to retain and expand childcare benefits, they are even more enthused about the value of senior care support.
More than one in six working Americans is already caregiver to the elderly, and 70% of these caregivers suffer work-related difficulties. And given that the 2030s will mark the first time in U.S. history that the population of people 65 and older will exceed that of people under 18, the costs of inadequate senior care resources are becoming increasingly apparent in the forms of:
- Heightened attrition. Nearly one-third of senior caregiver employees have voluntarily left a job to meet their senior caregiving responsibilities.
- Reduced productivity. Employees lose up to $3 trillion in wages and benefits annually while employers lose $17-33 billion due to absenteeism and turnover.”
- Legal liability. There’s been a steep rise in the number of Family Responsibility Discrimination claims in the past ten years, with discrimination against working caregivers to the elderly being the second most common category of claim.
This helps to explain why, when asked which family care benefit they would offer to their employees if they could provide only one, respondents chose senior care benefits over others by a considerable margin.
Employers Need a Broader View of Who the Caregivers Are
While employers are leaning into senior care benefits this year, they’ve yet to fully appreciate multi-generational demand for these supports among their employees. Only a minority in our study see them as relevant to parents with kids from school through college age, despite the fact that 60% of first-time caregivers are Gen Z or millennials.
Our respondents’ focus is also overly narrow in who they target their benefit programs to. Most employers are prioritizing their full-time, generally salaried corporate employees over their front-line, generally hourly employees, despite the fact that 58% of US workers are non-exempt. Indeed, it’s the hourly and front-line workers who most need childcare and senior care benefits (particularly when last-minute replacement caregivers are needed).
Nonetheless, employers generally recognize that by prioritizing caregiver benefits, they are supporting their overarching strategic objectives. Similar to our 2022 study:
And it’s well-established that caregiver benefits will help them do both. In fact:
Business-Government Partnership is Needed Now More Than Ever
Employers alone cannot adequately address the needs of working caregivers, which is why many are now lobbying state and federal government to be their partners. In our study, 42% said that government should have the primary responsibility for funding care-related employee benefits. Meanwhile, 75% use the Employer-Provided Child Care tax credit, and of those who know about but don’t use it, 89% say they would if the credit was broadened to include more types of childcare (e.g. babysitters, small home care providers). The fact that 68% of our respondents favor flexible childcare benefits(while just 16% favor on-site childcare) adds data-fueled support to the notion that employers would welcome an expansion of the current tax credit.
Two Steps Forward, One Step Back
This is not the first time in American history that a national crisis has had profound social and labor impact. Just ask the women who flooded the workforce during World War II, then were pushed back into the kitchen when the war ended. Progress is uneven, marked by advances and retreats. But reverting to a society in which working caregivers are left entirely on their own to find and fund support is simply not a viable option – not for them, nor for the companies that employ them.
The participants in our 2023 Future of Benefits Report are coming to terms with this reality. Recognizing that caregiver benefits are now table stakes and not mere perks, they are forging ahead in the face of economic uncertainty. Download the full report, not just to be able to compare your enterprise to theirs, but to find an always-welcome shot of inspiration from your peers.