Why Does In-Home Care With an Agency Cost More Than a Private Caregiver?

If your family has decided that your parent or loved one needs some assistance from an in-home caregiver, you’ve likely realized that you can either use an agency to provide a caregiver or hire one yourself. There are a few key factors that determine which option might be better for your family (check out this recent blog post to learn more), one of which is budget. 

On the surface, hiring a private caregiver yourself can seem like the more affordable option when you strictly consider the hourly wage you’d be paying. But there are many other costs that an agency covers that you might not realize – costs that you as the family caregiver would need to pay should you choose to go the private route. 

What’s more, there are many indirect and intangible benefits to using an agency that are hard to assign a dollar value to. Benefits that are considered priceless to many. In this article we’ll discuss what you’re actually paying for when you use an agency for in-home care, so you can make an educated decision on what’s best for your family. 

Direct costs

There are several direct costs that an agency takes on to hire, train, manage, and retain caregivers as an employer that factor into the rates they charge. Should you choose to hire privately, you as the family caregiver would then become the employer and would need to take on these costs. 

  • Hiring and training – Job ads, background checks, and paid training are just a few direct costs involved before care even begins. While this can take several weeks to do if you hire privately (potentially resulting in lost wages from your job), an agency already has caregivers ready to go when a client hires them. That quick turnaround is a huge advantage and the costs incurred to provide that service play into the rates they charge.
  • Legal and financial compliance – Agencies take care of insuring the caregivers with worker’s comp and are often bonded and insured as a company. They stay compliant with all tax matters and legal matters for employment, which can be pretty complex!
  • Benefits – A good in-home agency offers their caregivers paid vacation and sick time, which means they’d provide you with a replacement caregiver without any interruption to your service. Some provide medical benefits and even 401K to help attract and retain the best caregivers. These are costs that are built into the rate they charge and can add up to a significant amount. 
  • Management & administration – One thing family caregivers tend to underestimate when they hire privately is the time and effort it takes to manage a caregiver directly. Agencies have an entire staff of caring people who are there to help make sure you and your family get the best care possible. At Sequoia Senior Solutions, we have someone available 24/7 in case of emergencies, a care manager that supervises our caregivers, and a dedicated scheduler to handle last-minute changes. This staff and overhead to run a business 24/7 is a great benefit and something that factors into the rates that are charged. 

Some of these costs may seem like they’re optional (like paying employment taxes and worker’s comp insurance), but if you choose to forgo those payments, you’re exposing yourself to a potential financial and legal disaster. 

Indirect/intangible benefits of using an agency 

There are many indirect (non-monetary) and intangible benefits that using an agency can provide. While you can’t really assign a dollar value to many of these, they can be priceless – especially when it comes to the safety and health of your parent or loved one. 

  • Expertise – Years of experience in elder care and managing caregivers is of tremendous value. Sequoia Senior Solutions has been caring for seniors for more than 18 years and has built systems and processes that ensure your loved one will get the best care possible. From caregiver training and matching to creating personalized care plans, having years of knowledge and experience can help avoid costly mistakes that are often made by those new to caregiver management. This experience also means we’re able to pivot quickly as the needs of your loved one change. And should your parent need specialized help, we provide caregiver training that addresses the most common medical conditions that seniors suffer from.
  • Peace of mind – Knowing that the caregiver in your home has been thoroughly vetted and trained, and that all the insurance, legal, and tax matters are taken care of can be a huge relief. When you use an agency, you can also rest easy that should something happen, they’ll be there to help. 
  • Time – Time is a precious resource that you never get back once it’s spent. An agency saves a ton of time for family caregivers by taking care of all the hiring and management of the caregiver. You get the freedom to use your time on what matters most – spending it with your loved ones! 
  • Stress Reduction – Hiring and managing a caregiver and being responsible if something happens can cause a lot of stress, which can be damaging to your health. Using an agency means you may pay more per hour, but it can be more than worth it to keep the extra stress out of your life. 


The term “cost” can incorporate many things – not just the hourly wage that’s paid. When you’re considering whether to use an agency or hire a caregiver yourself, be sure to factor in both the direct costs and the intangible benefits that an agency provides like expertise, peace of mind, stress reduction, and time. 

At the end of the day, there are pros and cons to hiring a private caregiver, and the right choice depends on your specific situation. But educating yourself as to what you are getting with each goes a long way to making this transition a smooth one.

If you’d like to learn more about potential costs involved with an in-home care agency, check out this helpful article on our blog: How Much Does In-Home Care Cost with an Agency? Eight Factors That Determine the Price. And to learn more specifics about how it works when you use an agency for in-home care, check out our “How it Works” page, When you’re ready, book a complimentary discovery call to talk with a client service specialist about your situation.  

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