divorce and it’s economic impact on corporations
TRANSCRIPT
Divorce and it’s Economic Impact on Corporations
Married-couple families were the predominant family
structure in 2011, at 67%.This continues to decrease over
time.
2011 Census
Between 2006 and 2011, the number of common-law couples
rose 13.9%, more than four times the 3.1% increase for
married couples. Single parent families increased 8% over the
same period.
2011 Census
Although married couples are still the norm – about two thirds of families – their numbers are
lagging.
2011 Census
The portrait of the Canadian family is changing dramatically
on multiple fronts, with stepfamilies and so-called skip-
generation families (children living with only grandparents)
increasingly common across the country.
2011 Census
Stats Canada reports that 1 in every 3 marriages in Canada will result in
divorce or separation and over half of these will involve dependent children.
More than one-third of marriages in Canada will end in divorce before their thirteenth anniversary.
In the United States, it’s their eighth anniversary.
Only 63% of American children will grow up in a two parent, heterosexual home. The lowest figure in the Western World
The State of Our Unions 2005, a report issued by the National Marriage Project at Rutgers University.
In North America, 1,000,000 new children will live in a single
parent home this year.
Only about 10% of child custody orders are joint physical custody, in which the child spends at least 40% of his or her time with each parent. (www.justice.gc.ca)
The amount of unpaid child support and spousal support in Canada
now totals more than 2.5 billion. (Stats Can: Child and Spousal Support)
40% of children growing up in America today are being raised without their fathers.(Bilotta, Larry. 18 Shocking Statistics About Children and Divorce)
March 26th, 2011 the Globe and Mail stated:
“The family law system in this country is a wreck. A study by the Law Society of upper Canada found that, on average, it takes 3 years for a litigated divorce involving children to stumble through family court, and by then in addition to the heart ache and turmoil, a good chunk of retirement funds and college funds has disappeared”
• We know that families need certain things in divorce:
– Legal Advice– Division of Assets/Money– Parenting Plan
– But at the same time they need a way to reduce the emotional and financial cost to families and their employers
The cost of divorce to a company
Current research and thinking from the world of economics and social sciences highlight a number of conclusions. The most important being:
1. Happily married employees increase profitability
2. Unhappily married employees decrease profitability(Schramm, 2006)
• Marriage and divorce change dynamically over time– Employees are either succeeding in happy relationships or moving towards failing in
unhappy relationships
• Failing Relationships cost companies money– Estimates of 6 billion is lost by American businesses due to decreased productivity
stemming from marriage and relationship difficulties (Forthofer, Markham, Cox, Stanley & Kessler, 1996)
– For an average employee making $20/hour, the projected cost of that employee divorcing is over $8,000
• Marital problems often cause decreased productivity– Divorce can disrupt the productivity of the individual worker for as long as three years
(Lavy, 2002)
– In the year following divorce, employees can lose an average of over 168 hours of work time, equivalent to being absent four weeks
The cost of divorce to a company
• Divorcing employees often have serious health concerns– Stress related issues cost corporate American 300 Billion
annually(Velasquez-Manoff, 2005)
• Stress is a two way street between work and home– Depressed employees cost companies 44 billion annually
(Stewart, Ricci, Chee, Hahn & Morganstein, 2003)
• Higher Health care costs (increase insurance premiums)
• Higher Tax liability
The cost of divorce to a company
A divorce can result in loss of productivity due to:• Employee
– Loss of hours worked– Employee’s performance at 50% - 75% due to frame of mind when
experiencing the stress of divorce
• Peers / Other Office Employees– Overall negative impact on morale of co-workers– The need for cross training due to redistributed workload
• Supervisor– Time spent dealing directly/indirectly with employee’s
performance/productivity
The cost of divorce to a company
PRE-Divorce Costs (Average 13 week period)
# of Hours
Hourly Rate
Total Cost
Lost productivity of divorcing employee 130 $19.50 $2,535
Lost productivity of (3) peer/office staff 39 $22.10 $862
Lost productivity of supervisor 13 $25.50 $332
Productivity Loss for an Employee in Divorce
POST-Divorce Costs (Average 13 week period)
# of Hours
Hourly Rate
Total Cost
Lost productivity of divorcing employee 32.5 $19.50 $634
Lost productivity of (3) peer/office staff 6.5 $22.10 $144
Lost productivity of supervisor 3.25 $25.50 $83
DURING Divorce Costs (Average 26 Week Period)
# of Hours
Hourly Rate
Total Cost
Lost productivity of divorcing employee 260 $19.50 $5070
Lost productivity of (3) peer/office staff 78 $22.10 $1,723.80
Lost productivity of supervisor 26 $25.50 $663
Total Cost of Divorce per Employee: $12,046.80
(Example from © 2006 IOD, Inc. www.IODINC.com & thinkmarriage.org)
No problem can be solved from the same level of consciousness that created it.
Albert Einstein
Changing the way divorce is handled
in companies can effect positive changes for their
bottomline and their Employees’ health
So, what can employers do to promote and encourage less destructive divorce and therefore less cost to employees and the companies?
Take simple steps that can make a big difference by implementing:
TAKING CARE in Divorce™
Solution?
Teaching and engaging employees in courses and programs about how to strengthen the core relationships in their lives.
T – Teaching
Point them in the right direction to educate themselves by recommending reading.
Divorce• Surviving your DIVORCE – A Guide to Canadian Family Law • Author: Michael G. Cochrane
Healing• Rebuilding: When Your Relationship Ends (3rd Ed)• Authors: Dr. Bruce Fisher and Dr. Robert E. Alberti
Family• The Good Divorce; We’re Still a Family• Author: Constance Ahrons
• Helping Your Kids Cope with Divorce: The Sandcastles Way• Author: Gary Newman
Asking employees about their lives and empowering them to take proactive steps to moving through any transition in a positive way.
A - Asking
Keeping their issues private so to avoid the drama triangle that can happen at work.
K - Keeping
Innovation in a company around these areas will position a company as an industry leader and provide a value add in a very competitive workforce market place.
I - Innovation
Net Higher Profits due to decrease negative impact on productivity of divorce and/or separation in employees.
N – Net Higher Profits
The weak link is negative energy and dream destroyers. Those in a “bad” divorce can poison the environment very quickly. Teaching and living in gratitude can protect companies and employees.
G - Gratitude
Health & wellness starts at home. What happens at home is brought into our work place, our governments and international negotiations. So in order to effect change in the work place – we need to empower at home.
C – Caring For the Family
There are many options for divorce resolution besides litigation. Help employees find the right path for their situation.
– Arbitration– Collaborative Law– Do It Yourself (DIY)– Mediation: Traditional, Facilitative, Evaluative,
Transformative, Narrative, Interest Based, Independently Negotiated Resolution™
A – Alternatives to Litigation
• Know your Mediator is Qualified
– Certified Divorce Financial Analyst (CDFA)
AND– Certified Family Relations Mediator or Certified Comprehensive
Family Mediator through Family Mediation Canada (FMC)
OR– Qualified Mediator or Certified Mediator through Alberta Arbitration
and Mediation Society (AAMS)
OR– Registered Family Mediator through Alberta Family Mediation Society
(AFMS)
Divorce has a high price tag both in time and costs. Employers can help reduce both for themselves and their employees.
R – Reduce Time and Cost
Love is Grand! Divorce is a Hundred
Grand!
Most progressive employee benefit programs now cover the cost of a wide variety of wellness programs such as massage therapy, smoking cessation, fitness and wellness enhancement.
Why Not Divorce Mediation?
E – Employee Assistance Program Coverage
TAKING CARE in Divorce™
T – TeachingA – AskingK – Keeping ConfidentialI – InnovationN – Net Higher ProfitsG – Gratitude
C – Caring for the FamilyA – Alternatives to LitigationR – Reduce Time and CostE – Employee Assistance Program Coverage
Thank You
Karen StewartCEO and Founder of Fairway Divorce Solutions®[email protected]
Karen Stewart Divorce Guru Profile PageFairway Divorce Solutions® Business Page
@FairwayDivorce
Clean Break: How to Divorce With Dignity and Move on with your Life
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