Employee retention benefits: The key to retaining caregivers

Employee retention is a common challenge across all industries. However, in recent years, retention has become a growing challenge in the health and home care industry. According to the Activated Insights 2024 Benchmarking Report, the home-based care turnover rate has increased by 12%, totaling 79.2%, and is expected to continue rising. 

Home-based care provides essential assistance to individuals who need support with daily living activities, medical needs, or personal care in the comfort of their own homes. The caregivers play a critical role in maintaining the well-being, independence, and quality of life of clients, often building close, trusting relationships. 

The caregiver role can be physically demanding and emotionally taxing, as it often involves long hours, high-stress situations, and the responsibility of ensuring a client’s well-being and safety. For small to midsize home care agencies, balancing the demand of caregiving roles with meaningful employee benefits can be challenging, often resulting in high turnover. Staff loss disrupts client care, strains business resources, and can damage an agency's reputation, preventing growth.

Below, we'll explain the impact of employee turnover and offer effective employee retention strategies to help your business stay competitive while encouraging a satisfied, loyal workforce.

Why is employee retention important?

Employee retention refers to an organization’s ability to keep its employees over time. For home care agencies, retention is particularly vital because caregivers play a central role in aiding business growth by delivering consistent, high-quality client care. In 2023, 63.3% of agencies reported having to turn down new client cases due to staffing shortages. Without appropriate staff levels, organizations often struggle to expand their business or increase profits.

The benefits of employee retention

High employee retention offers several benefits to an organization:

• Cost reduction: Decreasing turnover minimizes the expenses associated with hiring, onboarding, and training new employees.
• Improved operations performance: Experienced employees enhance efficiency and productivity, helping the organization deliver better results.
• Increased employee morale: A stable workforce fosters a positive and supportive work environment, boosting employee satisfaction, and reducing burnout.
• Highly skilled staff: Long-term employees maintain organizational and process expertise, reducing disruptions and maintaining continuity.
• Growth enablement: Lower turnover removes roadblocks to business growth.
• Better customer service: Retained employees build stronger relationships with clients, leading to more personalized and reliable care, referrals, and growth.
• Increased revenue: A stable workforce reduces turnover costs and allows the organization to focus on growth initiatives, boosting profitability.

For home care agencies, retaining experienced caregivers directly impacts client care quality, agency reputation, and long-term business success. Addressing retention challenges ensures your organization remains competitive and thriving.

How much employee turnover costs your business

Caregiver turnover is one of the top threats to home care agencies. The turnover rate for the home care industry has reached 79.2%, meaning four out of five employees leave within the first 100 days of employment. These departures often cost your organization more than you may realize, with impacts reaching far beyond the surface.

The cost of employee turnover

How much does employee turnover cost your organization? Employee churn can cost companies upwards of U.S. $200,000 annually.

Expenses include:

• Recruitment & Hiring Costs: Advertising jobs, conducting interviews, and onboarding new employees are resource-intensive and costly.
• Operational Efficiency: High turnover disrupts workflows and can leave an organization understaffed, causing delays in service or having to turn down new clients.
• Client Satisfaction & Care: Clients often experience inconsistent care when caregivers and staff frequently change, leading to dissatisfaction and potential loss of business.
• Productivity: New employees take time to reach full productivity, impacting the team's overall performance.

ROI of retaining employees

Quantifying the return on investment (ROI) of employee retention can be challenging, but its impact is undeniable. Experienced employees bring long-term value by maintaining high-quality care standards and reducing the need for constant recruitment and training.

Another helpful metric to consider is the value on investment (VOI), which looks beyond hard costs to evaluate the broader benefits of employee retention strategies.

VOI factors include:

• Employee engagement and satisfaction
• Employee retention rates
• Improved productivity
• Reduced health claims
• Lower burnout rates

By offering employees retention benefits that provide value in multiple ways, your organization can see improvements across various areas that increase your bottom line. Below, we outline the employee retention benefits top home care companies offer to achieve these outcomes.

Employee retention benefits that top home care companies are offering

For small home care agencies competing with larger, more established organizations, understanding what benefits matter most to employees can feel overwhelming. Striking the right balance between affordability and value is critical to attracting and retaining top talent. While competitive pay remains essential, a comprehensive benefits package is equally important. These benefits show employees they are valued and serve as a powerful tool to build loyalty and reduce turnover.

According to Activated Insights 2024 Benchmarking Report, 91.8% of home health businesses, including home care and hospice agencies, provided staff benefits in 2023. These offerings reflect the industry’s growing recognition of the importance of employee retention strategies.

Key employee retention benefits offered by leading home care companies

• Competitive Pay and Incentives: A strong salary foundation is critical to attracting and retaining employees.
• Comprehensive Health Benefits: Inclusive packages often feature:some text
  • Access to primary care and mental health services
  • Flexible Spending Accounts (FSA) or Health Savings Accounts (HSA)
  • Vision and dental coverage
• Paid Time Off and Sick Leave: Encourages work-life balance and supports employee well-being.
• 401K Matching: Demonstrates a commitment to employees’ financial futures.
• Travel Reimbursement: Reduces the financial burden of work-related travel.
• Supplemental Insurance: Offers additional peace of mind through coverage for disability, accidents, or critical illnesses.
• Child and Dependent Care Assistance: Addresses caregiving challenges faced by employees with families.

These benefits align with proven employee retention strategies, fostering a culture of trust, appreciation, and commitment.

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