Home Care Cost Analysis - Hire an Agency or Hire Privately?

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Home Care Cost Analysis

Hiring Privately versus an Agency

At the end of the day hiring privately, where you become the employer of a caregiver, could expose you to more liability, risk and frustration than simply working with a great agency from the beginning.

Some of the reasons to use an agency:

  As an employer, you At an Agency, we will
Benefits are responsible for a variety of benefits such as paid sick days that will increase your costs. manage these benefits as part of our operations
Hiring/Firing spend time and money to find an appropriate caregiver and have to terminate them if it doesn’t work out. You might have a lapse in coverage. provide adequate background checks and support you to ensure a great match for your client
Finding a replacement be responsible for hiring a new caregiver send an alternate and work to find the right match if the first caregiver was not the right fit
Unemployment Insurance claims have to fight the claim or have your EDD account cover the fees. Over time this will have an impact on your client’s costs. immediately offer that employee work with another family and find a replacement at no cost to your client

Below is a simple calculation to highlight the true cost difference between hiring privately and using an agency.

Pay rate to self-hire (Approximate)  $17.50
FICA 7.65%  $1.34
SUIER 3.50%  $0.61
FUTA 0.60%  $0.11
ETT 0.10%  $0.02
Insurance, payroll and other agency fees – Possible placement fees could be as high as 20% 15.00%  $2.63
Your true costs  $22.20
Agency Fee $23.00
Agency Costs Costs to hire private
Five-hour shift $115.00 $110.99
Eight-hour shift $184.00 $177.59

 

All this to save less than $10!!

 

Read more about the cost comparison between hiring privately and working with a home care agency here, courtesy of the HCAOA. (Home Care Association of America)