Employers Paying the Price of Substance Abuse

by Steve Beller on May 9, 2017

Substance abuse in the workplace is increasing. For the past several years, data from the Quest Diagnostics Drug Testing Index™ has shown an increase in drug test positivity in the American workforce. We knew that employee drug use was costly to businesses in turnover, absenteeism, accidents, and insurance. However, the actual cost employers bear for employee substance abuse has been somewhat elusive – until now. The National Safety Council (NSC), Shatterproof (a national nonprofit organization), and the National Opinion Research Center (NORC) collaborated to create the Substance Use Cost Calculator for Employers to help estimate the costs of employee drug use on businesses. According to the NSC, the calculator is, “an authoritative, easy-to-use tool providing business leaders with specific information about the cost of substance use (including prescription drug abuse and misuse, alcohol abuse and misuse, opioid and heroin addiction, as well as abuse of other illicit drugs and marijuana) in their workplace.” The calculator combines the latest research on employment costs with data from National Survey on Drug Use and Health (NSDUH).

Using the calculator is simple. Employers enter their industry, company size, and state to estimate the price they might be paying on account of employee substance abuse. For example, the calculator estimates the annual cost of substance abuse for a retail chain in California with 1,000 employees is $370,299. This translates into $132,007 in lost time, $140,693 in job turnover and re-training, and $97,498 in added healthcare spend. In addition to pointing out the costs of substance abuse, the calculator also provides an estimate of potential cost avoidance employers can achieve through employee engagement and treatment assistance.

According to the NSC, “Substance use disorders affect 20.8 million Americans, almost 8 percent of the adult and adolescent population. While 75 percent of these people are part of the workforce, most employers are unaware of the hidden costs associated with these problems. It is estimated that the yearly economic impact is over $442 billion dollars.” Employers absorb a significant portion of those costs in the form of absenteeism, increased healthcare expenses, and lost productivity.

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