Think the Cost of Drug Testing is Too High? Think Again

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Pre-employment drug testing

According to the 2010 National Survey on Drug Use and Health, 66 percent of substance abusers aged 18 and over are employed. With this knowledge at hand, one would assume that a vast majority of employers use employee drug screening.

Surprisingly, more than 40 percent of employers do not conduct pre-employment drug testing, and 64 percent of employers do not drug test current employees, according to the 2011 Society for Human Resource Management (SHRM) Drug Testing Efficacy Poll. The SHRM poll surveyed more than 1,000 HR professionals in public, private and non-profit organizations representing a variety of industries about their drug screening practices.

Reasons employers do not drug test

Source: 2011 SHRM Drug Testing Efficacy Poll

Why Do Organizations Overlook Drug Testing?
The organizations that do not conduct employee drug screening cited various reasons in the SHRM poll. Twenty-four percent said that their organization does not believe in drug testing and 18 percent said that drug testing was not required by the state they operated in.

Sixteen percent said there was no viable return on investment for drug testing and another 16 percent said that drug testing was too costly.

A smaller margin of respondents claimed that drug testing was not applicable to their business or that it was administratively too difficult to implement. Finally, only 2 percent of respondents who do not currently perform drug screening said they had plans to incorporate it in the future.

Many of the reasons cited above for not conducting drug testing relate to cost. Organizations may be hesitant to implement drug screening because they view it as a voluntary measure that negatively affects the bottom line. However, this kind of thinking is flawed. Although drug screening does entail an up-front investment, the costs or risks of not doing drug screening can be substantial by comparison.

Comparing the Costs and Benefits of Drug Testing
According to the SHRM poll results, for 39 percent of respondents, drug testing costs less than $30 per test per person. Another 24 percent of employers reported a cost of $31 to $40, while 19 percent of employers said they pay between $41 and $50 per test. Only a slim margin of respondents pays more than $50 for each drug test.

The common risks for employers who do not leverage drug testing include higher turnover, decreased productivity, increased absenteeism and a greater number of workers’ compensation claims. Below we’ll highlight each of these main risks and discuss the related costs to the employer and how drug testing can help mitigate each risk.

Risk # 1: Worker Turnover
Substance abuse among workers can increase employee turnover. According to a 2007 study by Substance Abuse and Mental Health Services Administration, substance abusers change jobs as often as three times annually.

Organizations with a high worker turnover will end up spending more on recruiting, hiring and training, as they continually replace workers. Data from the SHRM poll shows that organizations that implemented drug testing saw about a 16 percent decrease in employee turnover rates.

Risk # 2: Productivity
It is no surprise that substance abuse decreases worker productivity. It could cost an organization thousands of wasted dollars each payroll to fully compensate workers who are not operating at expected capacity.

In fact, according to Working Partners, National Conference Proceedings Report sponsored by the U.S. Department of Labor (DOL), Small Business Association (SBA) and Office of National Drug Control Policy (ONDCP), has shown that substance abusers are 33 percent less productive than their peers. According to the SHRM poll, of the organizations that began drug testing, 19 percent experienced an uptick in worker productivity.

Risk # 3: Absenteeism
Substance abusers are also more likely to be absent from work. A high rate of absenteeism costs employers more money paid for sick days and leaves employers with less overall output. According to the Working Partners, National Conference Proceedings Report, substance abusers are 2.5 times more likely to be absent for more than eight days a year than regular workers.

The SHRM poll shows that a drug testing program can lower absenteeism. For those organizations with absenteeism rates greater than 15%, implementing drug testing reduced absenteeism by about 50% overall.

Risk # 4: Worker’s Compensation Claims
Substance abuse in the workplace may also lead to accidents and injuries, which results in costly workers’ compensation claims. Statistics from the U.S. Department of Health and Human Services, National Institute on Drug Abuse show that substance abusers as much as double the cost of worker’s compensation claims for their employers.

Again, the SHRM poll respondents who had a high rate of workers’ compensation incidences saw an average decrease in workers’ compensation claims of 50 percent, after implementing drug testing.

As you can see from this cost and benefit analysis, the costs associated with not performing drug testing are far greater than the costs of implementing drug testing. There is a traceable ROI for drug testing in the form of decreased turnover, absenteeism and worker’s compensation claims and increased productivity.

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