The Hidden Costs of Workplace Substance Abuse

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Injuries on the job, and resulting workers compensation claims, along with high absenteeism and tardiness, are among the known costs associated with workplace substance abuse that drain corporate profits. Less well understood, however, are the many other hidden and indirect costs associated with substance abuse that can exact a far higher cost.

As an employer, you’re very likely to encounter employees with a substance abuse problem. The Substance Abuse and Mental Health Services Administration reports that 77 percent of illicit drug users in the United States are employed — that’s 9.4 million people.

Substance abuse impairs workers both physically and mentally. Its impact on the workplace includes reduced output; increased errors; lower quality of work and reduced customer satisfaction. The after effects of substance use, such as hangovers or withdrawal, decrease alertness, accuracy and reflexes, resulting in a decrease in the quality of work produced. A preoccupation with obtaining and using substances also interferes with attention and concentration, exacting a tremendous productivity hit – one that costs US businesses $78 billion in aggregate each year, according to the Partnership for a Drug-free America.

Aside from impairing their decision-making ability and skills to perform on the job, employees who abuse alcohol and other drugs bring a whole host of other problems with them to work. Dealing with problems such as increased turnover, high absenteeism, potential workplace accidents and more falls in the laps of supervisors and Human Resources personnel who must divert their focus to address these issues.

Substance abusers have high job turnover rates, creating a “revolving door” that drains profits. According to a study recently released by the Substance Abuse and Mental Health Services Administration (SAMHSA), a division of the United States Department of Health and Human Services, among full-time workers who reported current illicit drug use, 12.3% said they had worked for three or more employers in the last year, compared with 5.1% of non-substance abusing workers. High personnel turnover results in higher costs incurred to hire and train new employees.

It has also been substantiated that substance abusers have a higher incidence of damage, loss, or theft to company property and equipment, and are more likely to injure themselves or others on the job. Employers also are subject to increased liability with substance abusers in transit or working at offsite locations.

Moreover, employees who abuse drugs or alcohol cost their employers about twice as much in medical claims as do non-drug-using employees. Since substance abuse depresses the immune system, substance abusers have a greater incidence of illness and increased medical costs.

Drug-free workplace programs help protect employers and employees alike from the devastating consequences and high costs of substance abuse. Establishing effective policies, deterring and detecting substance use, and urging employees to seek help for substance abuse problems are smart business strategies. Several states even offer Worker's Compensation discounts to companies that maintain certified drug-free workplace programs. If you do not have an employee drug testing policy, consider working with a background screening provider such as HireRight to help design a program to meet your needs.

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HireRight is a leading provider of on-demand employment background checks, drug and health screening, and electronic Form I-9 and E-Verify solutions that help employers automate, manage and control background screening and related programs.

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The HireRight Blog is provided for informational purposes only. It is not intended to be comprehensive, and is not a substitute for and should not be construed as legal advice. HireRight does not warrant any statements in the HireRight Blog. Any statutes or laws cited herein should be read in their entirety. You should direct to your own experienced legal counsel questions involving your organization’s compliance with or interpretation or application of laws or regulations and any additional legal requirements that may apply.