A few years ago, employee caregiving was mostly discussed as part of work-life balance or employee wellness. Today, it’s a workforce strategy issue, showing up in metrics every HR leader and CFO tracks: turnover, absenteeism, productivity, healthcare spending, and retention.
The caregiving crisis driving this shift is widespread. Childcare challenges now cost the U.S. $172 billion annually, and unpaid family caregivers provide more than $1.01 trillion worth of care every year. Employees are balancing caregiving responsibilities for longer periods while navigating a care ecosystem that’s become increasingly difficult to access and afford.
These caregiving pressures directly affect work performance.
This guide helps you identify the hidden costs of caregiving for employers, estimate your organization’s exposure, and move from reactive benefits to a more strategic approach to caregiver support.
Why employee caregiving is a hidden business cost
Caregiving costs hide across the business in missed deadlines, unexpected resignations, increased leave requests, and employees stepping back from career opportunities. That’s what makes the cost of caregiving for employers so easy to overlook.
More than half of employers don’t measure the impact of employee caregiving. And while over 80% of employees say caregiving affects their performance, only 24% of employers recognize the impact.
One reason caregiving costs are hard to identify and measure is that employees don’t always disclose what they’re managing outside of work. According to the Society for Human Resource Management’s (SHRM) Better Workplaces, Better World report:
- 46% believe using caregiving benefits could hurt future promotion opportunities
- 42% worry they’ll be trusted with fewer responsibilities
- 41% fear damaging professional relationships
- 35% feel uncomfortable seeking caregiving support at work
Another reason is that care is often ongoing. Unlike parental leave or recovery from surgery, caregiving stretches across months or years. In fact, one-third of family caregivers have been providing care for five years or more. While the Family and Medical Leave Act (FMLA) provides up to 12 weeks of unpaid, job-protected leave, many employees continue to balance caregiving long after leave ends.
The result is a challenge that’s hidden in plain sight: caregiving influences business performance every day, even when it’s not measured or discussed.
Where unsupported caregiving affects your bottom line
Rather than a single large expense, the cost of not supporting employee caregivers appears as a series of costs that both interlink and accumulate across operations, finance, HR, and healthcare.
Employee caregiver turnover and replacement costs
For some employees, balancing work and caregiving becomes unsustainable, and when forced to choose between the two, work usually loses. Recent research found that 34% of caregivers planning to leave their employer claim caregiving is the primary reason, and 75% say it’s at least a factor in their decision.
Replacing an employee typically costs 50% to 200% of their annual salary, depending on the role. Beyond recruiting costs, organizations lose institutional knowledge, customer relationships, team continuity, and valuable experience that can take years to rebuild.
Caregiver productivity, presenteeism, and performance
Turnover is only part of the picture. Employees balancing childcare or elder care responsibilities often spend their workdays coordinating around school closures, medical appointments, transportation, and family logistics alongside their job responsibilities. Harvard Business School found that more than 80% of working caregivers feel caregiving affects their ability to perform at their best.
Caregiver absenteeism at work
Working caregivers miss an average of 6.6 workdays each year due to caregiving, representing roughly 126 million missed workdays annually. The impact extends well beyond the missed day itself. Managers adjust schedules, teams absorb additional work, projects are delayed, and overtime costs often increase.
Healthcare spending
Caregiving affects employees’ health as well. Caregivers frequently postpone preventive care, delay treatment, or neglect their own physical and mental wellbeing. Employers spend an estimated additional $13.4 billion annually on healthcare costs associated with employed caregivers.
Signs that unsupported employee caregiving is already affecting your workforce
Most employees don’t raise their hand and say, “I’m struggling to balance work and caregiving.” In many cases, managers don’t realize someone is a caregiver until a crisis occurs or an employee resigns.
The signs, however, often appear much earlier. Each one individually may not seem significant, but together they can point to an employee who’s struggling to balance work with increasing caregiving responsibilities.
Shifts in reliability
A consistently dependable employee starts arriving late more often, misses deadlines, or declines projects they would have accepted in the past. These changes are easy to attribute to disengagement or performance issues. Still, they might reflect someone coordinating childcare, transporting a parent to medical appointments, or managing another caregiving responsibility before or after work.
Changes in work patterns
Employee caregivers may need to change the way they work. One study shows 28% reduce their work hours, and 21% reduce their workload.
Look for increases in:
- Unplanned Paid Time Off (PTO)
- Frequent schedule changes
- Requests for flexible work hours
- Personal phone calls during the workday
- Last-minute calendar adjustments
Career decisions that seem out of character
Research shows 67% of working caregivers struggle to balance their jobs with caregiving responsibilities. As demands increase, employees may decline promotions, travel opportunities, or leadership roles because they lack the capacity to take on more. Research shows 16% of employee caregivers turn down promotions or advancement opportunities.
Increased manager workload
Managers are often the first to experience the operational impact of unsupported caregiving. They spend more time rearranging schedules, redistributing work, approving last-minute flexibility requests, and helping employees navigate unexpected disruptions.
If these situations become more common across teams, caregiving may be affecting organizational performance more than current reporting suggests.
How to estimate the cost of employee caregiving in your organization
You don’t need a complex financial model to begin understanding caregiving’s impact. In many cases, the data already exists.
Start with metrics your organization already tracks and ask:
- Are turnover rates higher among employees who are likely balancing caregiving responsibilities?
- Have requests for intermittent leave, flexible schedules, or unplanned PTO increased?
- Are certain departments experiencing higher absenteeism or productivity challenges?
- What themes emerge in employee engagement surveys or exit interviews?
- Which caregiving benefits are being used, and what outcomes are associated with those employees?
The goal is to establish a baseline and identify meaningful patterns over time.
Compare employees who use caregiving support with those who don’t. Track trends in retention, absenteeism, leave duration, healthcare utilization, and employee engagement to get a clearer picture of how caregiving is impacting business outcomes.
What CFOs should evaluate when budgeting for caregiver support
Supporting caregivers has traditionally been viewed as an HR initiative, but it’s now becoming a finance conversation, too. Many of the costs associated with unsupported caregiving—turnover, overtime, recruiting, absenteeism, healthcare claims, and lost productivity—already appear throughout organizational budgets.
When budgeting for caregiver support solutions, consider:
Total cost of ownership
Many organizations have built caregiving support by layering point solutions over time. One vendor provides Backup Care while another offers care navigation or coaching. An Employee Assistance Program supports emotional wellbeing, and HR teams fill the remaining gaps.
While each solution addresses a different need, together they can create a fragmented employee experience, increase administrative complexity, and drive up costs. A more integrated approach can simplify administration, improve the employee experience, and reduce the total cost of ownership, freeing resources to offset rising healthcare premiums or invest in other priorities.
Pricing models, not just price
Today’s caregiving challenges are unpredictable. Employees may need support because a caregiver cancels unexpectedly, a school closes, an aging parent is discharged from the hospital, or a loved one receives a new diagnosis.
Usage-based pricing models that reflect how employees actually experience caregiving, rather than traditional prepaid models, can create predictability and measurable ROI. Instead of trying to maximize care days, consider flexible support solutions that meet employees’ needs while driving savings and stability.
Administrative costs
Also consider how much administrative effort a solution requires. A lower-priced benefit that creates additional work for HR or managers may ultimately cost more than a consolidated solution that’s easier to implement and manage.
Why measuring caregiver costs now matters for long-term planning
Demographic shifts, rising care costs, and ongoing care shortages across the care ecosystem mean more employees will need to balance work with caregiving challenges in the years ahead.
Organizations that understand how caregiving influences productivity, absenteeism, retention, healthcare spending, and employee engagement are better positioned to make informed decisions about benefits, allocate resources effectively, and prepare for a workforce whose needs will continue to evolve.
Employers can’t solve every challenge facing today’s care ecosystem. But you can better understand its impact and focus investments where they’ll deliver the most value for your employees and the organization.
Understanding the cost of not supporting employee caregivers is the first step toward building a stronger workforce strategy. Learn how Cariloop helps employers measure impact, support caregivers, and improve business outcomes.