Backup care: It’s not just for kids anymore

July 2008 - HR Specialist: Compensation & Benefits

If the economy is forcing your organization to operate with fewer employees than usual, an unscheduled absence can throw production—and the employees who show up that day —into a tailspin. Often, those absences occur when an employee’s child care arrangements fall through. But increasingly, workers also must stay home to care for spouses or parents who need help after surgery or because a regular caregiver is unavailable.

Cindy Carrillo, CEO of Work Options Group, says 10% of the 300,000 hours of emergency backup care her firm supplied to businesses last year was for adult and elder care. “The concept of backup care has grown beyond an age group,” she says.

Examples: Carrillo tells of the time her ex-husband had shoulder surgery and couldn’t use his arms—and she had to go on a business trip. She recalls a client whose mother had a stroke and couldn’t be left alone—she had to live with the employee’s family until a room in a nearby assisted-living facility opened up.

A backup care service sends a caregiver into the home to take over while the employee is at work. Most organizations subscribe to the service for all employees. The benefit costs between $30 and $100 a year per employee. That usually includes a subsidy that covers the cost of 80 to 100 hours of backup care per employee, although some firms ask the employee to contribute a few dollars an hour to the caregiver’s fee.

In return, employers can expect to see a 25% return on their investment (ROI), Carrillo estimates. The Society for Human Resource Management estimates that employers can expect a return of $3 to $4 in increased productivity and reduced turnover for every dollar they invest in backup care. “It’s different from most benefits because you can figure out the ROI,” Carrillo says. “Backup care is hour for hour. Somebody is getting back to work if they use backup care. You can do the math.”

Example: Microsoft offers backup care to 48,000 employees for both child care and adult care. Employees used 58,000 hours of care last year and the company saved $5 million in reduced absenteeism.

Here are seven things to consider when starting a backup care benefit:

1. Offer the perk to employees in all life stages so they can use it to fill caregiving gaps for everyone in the family—from babies to aging parents.
2. Choose a vendor with a national network of caregivers. Employees whose elderly parents live out of state can tap the network when they can’t get there right away.
3. Pair with a vendor whose caregivers are trained to do more than babysit. Adults who need care often take medicine on the caregiver’s watch and need help getting around.
4. Subsidize the service to make it affordable to employees. Don’t expect them to use it if they have to pay $25 an hour.
5. Discourage employees from using the service as a permanent caregiving solution. Backup care is intended for emergencies and to fill unexpected needs.
6. Track the return on your investment by asking the vendor to report how many employees use the service and for how many hours. To calculate ROI, figure the average hourly salary of your employees— including benefits. Then compare the cost of the service to how much you saved by having those employees at work instead of out on sick leave during those hours.
7. Communicate constantly with employees about the program. It’s a benefit that people only pay attention to when they need it. Make sure they know about it when the need arises.

Back it up

• 85% of employees have adult care or elder care responsibilities.
• 4% of employers offer backup care for adults.
• Employer-sponsored access to backup child care has declined, while access to backup elder care has remained fairly steady.
• Companies typically subsidize 95% of the cost of backup care to encourage employees to use it.