.jpg)
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.
What benefits are employers required to provide by federal law?
The benefits listed below are the bare minimum that an organization is required by law to provide to its employees to avoid costly penalties.
1. Social Security and Medicare
Employers are required to contribute to Social Security and Medicare on behalf of their employees. These programs provide retirement income, disability benefits, and healthcare coverage for eligible individuals over the age of 65. Employers must match their employees’ contributions to these programs through payroll taxes.
2. Family and Medical Leave Act (FMLA)
The FMLA mandates that eligible employers provide up to 12 weeks of unpaid leave annually for certain family or medical reasons. This includes the birth or adoption of a child, caring for a family member with a serious health condition, or recovering from a personal illness. Employers must guarantee job protection during the leave period and ensure the employee’s position or an equivalent role is available upon their return.
3. Health insurance under the Affordable Care Act (ACA)
The ACA requires organizations with 50 or more full-time employees to offer healthcare coverage to at least 95% of their workforce. This is known as the Employer Mandate. To comply, some organizations opt for Minimum Essential Coverage (MEC) plans, which meet basic ACA requirements and help avoid penalties without exceeding budget constraints. However, most MEC plans typically lack the comprehensive coverage employees expect, which can affect employee retention.
Understanding MEC plans
MEC plans are designed to meet the ACA’s Part A requirements by covering preventive care services such as vaccinations, health screenings, and annual checkups. These plans allow employers to avoid the ACA’s “sledgehammer” penalty, which imposes fines of $2,900 per employee for non-compliance. While MEC plans are cost-effective, they often fail to provide the essential healthcare options that employees value and need.
Why ordinary MEC plans alone fall short—and how to enhance them
Traditional MEC plans meet the minimum ACA requirements but often fail to provide the comprehensive healthcare employees expect. Basic medical needs like doctor visits, chronic illness management, and emergency care are frequently excluded, leaving gaps that can undermine employee satisfaction and retention.
Additionally, ordinary MEC plans typically do not meet the ACA Minimum Value standard under Part B of the Employer Mandate, which requires:
- Cover at least 60% of anticipated expenses for an average enrollee.
- Include inpatient and outpatient care, emergency services, maternity care, and other essential health services.
Without enhancements, traditional MEC plans typically lack:
- Comprehensive primary care
- Mental health services
- Affordable access to prescriptions and labs
- Chronic illness care
- Surgical care and inpatient hospital stays
- Specialist consultations
- Vision and dental care
Small businesses often face the challenge of balancing employee expectations with tight budgets. The good news? Pairing a MEC plan with innovative solutions like Direct Primary Care (DPC) memberships is transforming employee benefits by filling critical gaps in coverage while keeping costs manageable.
A better approach to employee retention benefits: MEC + DPC
Providing robust healthcare benefits doesn’t have to break the bank, even for small businesses. There are affordable health insurance options to improve your employee retention benefits. Pairing a MEC plan with a DPC membership offers a cost-effective and employee-centric solution.
This approach offers:
- Preventive Care: MEC plans cover annual checkups, vaccinations, and screenings to meet ACA requirements.
- Primary Care Access: DPC memberships offer employees telehealth services, mental health support, prescription coverage, and chronic disease management.
- Cost Savings: This hybrid model reduces healthcare expenses for employers and employees.
While this solution may not cover major surgeries or hospitalizations, it provides a cost-effective option for small businesses to enhance their employee retention benefits package. Companies like Vitable Health specialize in designing tailored healthcare solutions to support employee retention and satisfaction while keeping costs low for the employer.
Keep your employees happy with Vitable Health
Retaining top talent starts with offering meaningful healthcare benefits. By combining a MEC plan with a Primary Care membership, you can provide affordable and valuable health benefits that meet employee needs. Vitable offers small to mid-sized organizations a transformative healthcare solution.
Employers benefit from:
- A low, fixed monthly cost under a predictable per-employee-per-month (PEPM) model
- Simplified benefit administration and user-friend employer dashboard
- Managed open enrollment periods
- Satisfied employees
Enhance your benefits package and keep your team happy by partnering with Vitable Health. Get a free quote today to explore how Vitable can help you attract and retain top talent with affordable, high-quality healthcare.
