US Pandemic silver lining? Employers start to recognize importance of caregiving benefits
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When the coronavirus pandemic forced states to lock down last year, they suspended a long-standing requirement that the unemployed have to be looking for work in order to receive jobless benefits. © OLIVIER DOULIERY/AFP/Getty Images A restaurant displays a "Now Hiring" sign amid the coronavirus pandemic, on August 4, 2020 in Arlington, Virginia. Now, as the economy and hiring pick up, a growing number of states are resuming the mandate.
For millions of Americans, the pandemic triggered an acute caregiving crisis, with working parents leaving their jobs as weeks of remote schooling turned into an entire year. But it has also forced a reckoning in corporate America about the day-to-day demands on working caregivers in general — and working mothers in particular.
“Child care and balancing the demands of, say, dealing with a sick kid, have been perennial issues, even pre-Covid,” said Andrew Challenger, vice president at executive outplacement firm Challenger, Gray & Christmas.
The pandemic, Challenger said, essentially pulled back the curtain to expose a rickety, fragmented system that didn’t function very well even at the best of times.
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The pandemic has pulled back the curtain to expose a rickety, fragmented system.
When school resumed last fall, 865,000 women dropped out of the workforce between August and September alone, and women’s labor force participation has continued to plummet: As of last month, the labor force participation rate for men older than 19 was 69.5 percent. For the corresponding cohort of women, it was 57.4 percent.
What happens next — and how much of the lessons of the pandemic will be retained in the future — could turn out to be an unexpected silver lining during a year of unprecedented stress and challenges.
“Sometimes it takes a big crisis to set in motion shifts in compensation,” Challenger said.
“This has always been part of the conversation — how do you give flexibility for the worker but still have consistency for the employer? This is something that has been exacerbated during the pandemic,” said Aliya Robinson, senior vice president of retirement and compensation policy for the ERISA Industry Committee, an association focused on benefits at large companies. “With this whole shift to work-from-home, I think a lot of employers realized there's a lot more ability than they anticipated to have employees working from home,” she said.
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This, in turn, has paved the way for greater acceptance of remote work, scheduling flexibility and more willingness to expand benefits specifically for caregivers — particularly as employers face the prospect of losing valuable talent.
“I think it does indicate that this issue, particularly for women around caregiving and careers, has at least been recognized by a large number of organizations. In this crisis, we saw such an outflow of women from the workforce as the coronavirus hit,” Challenger said. “I think you’re starting to see smart companies recognize that if they want to be the best possible company they can be, which means having a diverse set of individuals leading their organization, that it's going to take an active effort to get women back into the pipeline and back into the office.”
Research by the Society for Human Resource Management found that women are worried — often rightly so — that dropping out of the workforce can hurt their career advancement: A recent survey found that 27 percent of working women who also act as caregivers said the pandemic had hurt their professional development, compared to just 10 percent of men who said the same.
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According to surveys of 500 HR managers conducted by Care.com, human resources departments are reevaluating the kinds of benefits they offer employees — and making adjustments to address the yawning gap between caregiving demands and employers’ accommodation of those obligations. More than three in five survey respondents said they plan to increase childcare benefits, while about two in five will expand offerings for elder care.
“Caregiving challenges are not new for families. They were just really highlighted during Covid, and that’s because we were literally 'Zooming' into people’s homes,” said Alyssa Johnson, senior director of account management at Care.com. “Employers have literally had a front-row seat into people's homes and lives, and they've seen the challenges families have faced,” she said.
Employers have literally had a front-row seat into people's homes and lives, and they've seen the challenges families face.
“It’s just an acknowledgement of this idea that emergencies happen, emergency child care situations arise. Companies that have now been forced to reckon with a mass child care emergency now have the tools and wherewithal to help employees,” Challenger said.
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Addressing this is less a matter of altruism than accounting.
“Half of HR leaders are seeing productivity decrease in working parents,” Johnson said. “It’s never been clearer — employers are realizing that care challenges have had a significant impact on their workforce, and there is just a real connection between child care and employee performance.”
In addition to diminished productivity, employee departures extract a tangible financial toll on employers. “They may actually lose a significant portion of their workforce. That can affect the bottom line,” said Amber Clayton, director of the Society for Human Resource Management Knowledge Center. The opportunity cost of having to devote resources to recruit, hire and train replacements when women leave the workforce can be steep: Pre-pandemic research from SHRM suggested that replacing a salaried employee can cost between six and nine months of that worker’s annual pay.
“Hiring and re-hiring is really expensive. Companies are always looking to decrease turnover. There's a real recognition that this is an issue that needs to be addressed,” Challenger said.
HR experts report that employers are experimenting with different tools and approaches to ease the burden of caregivers trying to juggle work and family obligations. In addition to greater acceptance of remote work and nontraditional work hours — including longer breaks so parents can supervise kids’ remote lessons — some have expanded paid or unpaid leave, provided subsidies for on-site or in-home child care, or offered on-site child care for employees who can’t work from home. “Employers have stepped up and are making those accommodations,” Clayton said.
In a recent survey of more than 200 HR executives, Challenger, Gray & Christmas found that 84 percent said they are offering workers more flexibility, with many making changes specifically in response to workers’ caregiving obligations. Two out of five reported that they specifically have extended greater flexibility to parents, with 23 percent expanding paid time off and 13 percent offering child care options.
Of those, the vast majority — 95 percent — said they plan to make some or all of these changes permanent. “I think it was very eye-opening for employers,” Clayton said. “It forced them to look at their policies and procedures overall.”
This is a paradigm shift, experts say, that is long overdue.
“It highlighted the need for employers to step in and play a role,” Johnson said. “When families are forced to choose between families and work, no one wins.”
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