The cost of elderly care in Asia and its contribution to gender inequality
Medical advances and improved living standards have led to longer lifespans, creating a disproportional population with relatively more elderly people. According to the World Health Organization (WHO), people aged 60 years and older will outnumber children younger than 5 years old by 2020. The increased number of elders will have financial implications on the working population as well as society in the form of medical care needs.
With longer life-expectancy, it is likely that more people will drop out of the workforce to be caregivers for elderly parents. This may be especially pronounced in Asia. In most cases, this would be the woman of the household given her traditional role as caregiver for both her own and her spouse’s elderly parents. As a result, women are more likely to drop out of the workforce compared to male counterparts. For example, in 2018, 58% of Hong Kong’s caregivers are female and this figure is expected to grow.
Exiting the workforce temporarily can have more financial impact than you think. The image below presents the average retirement savings of two types of women. The “career woman” does not take any time off throughout her career. The “good daughter” retired approximately seven years early to care for elderly parents. Findings reveal the average total retirement savings of a “good daughter” is, on average, 30% less than a “career woman”.
Figure source: Marsh & McLennan Insights, the International Longevity Centre Singapore, and the Tsao Foundation
The cost for individuals and companies
On an individual level, the true cost of exiting the workforce includes:
- Direct loss of salary during the time of unemployment
- Discontinued contribution to retirement plan
- Missing promotion opportunities and work experience
- Difficulty in finding work again when returning to the workforce
Costs expand beyond individuals to impact companies. Companies will incur costs as a result of:
- Replacing employees who leave their jobs or move from full-time to part-time work
- Loss of productivity due to employees taking on eldercare responsibilities
- Increased absenteeism among those who are caring for the elderly and children
What should companies do?
There are measures companies can take to reduce their financial costs which also help prevent catalysts for gender inequality.
Firstly, it is important to identify the business case / financial context which will require a clear understanding of the financial costs identified above. The issue and its solutions are complex. A combination of long-term, short-term, intangible and concrete actions are required. Company culture needs to support both men and women employees to contribute as caregivers in their households. This means, there is no negative stigma or career penalties associated with time off and special arrangements.
There are other low-cost measures that can be taken. Providing flexible work arrangements (i.e. working hours and working from home or remotely) allow caregivers to be present physically at home when needed, while working at the pace that fits their requirements. Offering unpaid leave for care giving responsibilities and re-employment arrangements can prevent employees from resigning and thus loss of talent. A human resources framework / policy should be created outlining the company’s stance and measures available to manage care giving needs. Lastly, people managers should be responsible to support the implementation of these arrangements with their own team members.
What did Tracking the Trends reveal about gender equality in the Asia-Pacific region?
As reported in the 12th annual edition of Tracking the Trends, significant challenges impact our ability to achieve gender equality in the Asia-Pacific region. In several parts of the region, discriminatory laws and social norms drive gender imbalances and continued discrimination. In the survey, 19% of interviewees identified gender equality as a key sustainability issue over the next 2-5 years. Read the complete report for comprehensive insight to sustainability trends in Asia.
Gender Equality at CSR Asia Summit 2019
Join us at the CSR Asia Summit on September 18-19 in Bangkok, Thailand for a more in-depth discussion on what’s next on the agenda for gender equality in the workplace. Click here for more details.
These blogs are written by ELEVATE staff members or associates and the views and opinions expressed are not necessarily those of ELEVATE.