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What is the True Cost of Substance Abuse in the Workplace?

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Substance abuse is more prevalent in the workplace than many of us like to admit. In fact, the problem is growing and will continue until more support is accessible and preventative measures are provided. 

According to the National Drug-Free Workplace Alliance (NDWA), six industry sectors have seen double-digit increases in drug testing positivity rates that were twice the national positivity rate increase of 6.2, in a matter of only three years — Transportation & Warehousing (34.5%), Other Services (33.3%), Wholesale Trade (20.0%), Retail Trade (14.9%), Construction (13.2%), and Administrative Support, Waste Management, & Remediation Services (12.2%).

Many employers may be tempted to chalk substance abuse up to an employee's personal problem that only affects their home life to save time and money on extra insights and resources for support. However, the problem can impact the workplace to a much higher financial degree than you may think. 

 

DO YOU KNOW THE COST OF SUBSTANCE ABUSE IN THE WORKPLACE?

Believe it or not, the cost of substance abuse in the workplace is much deeper than direct costs and includes secondary costs that ultimately impact a business' bottom line.

In fact, the National Safety Council reports that there is more than $364 billion in total cost to US employers per year due to drug and alcohol addictions, with the average cost of each untreated employee averaging around $8,817 per year. Extrapolate that throughout your employees, and costs rise significantly.

To get a better understanding of your true cost, plug some information into our Substance Use Cost Calculator.

 

IS YOUR INDUSTRY EXEMPT FROM THESE COSTS?

By now, you may be thinking your industry isn't vulnerable to these costs because it's in a category with lower rates, but think again. NSC reports that 1 in 12 workers have an untreated substance use disorder — even industries with lower rates, such as public administration and protective services, have an average rate of 6% of employees with SUDs in their workforce.  

Likewise, SAMHSA reports that the annual average of 8.7% of full-time workers aged 18 to 64 used alcohol heavily in the past month, 8.6% used illicit drugs in the past month, and 9.5% were dependent on or abused alcohol or illicit drugs in the past year — with the highest rates in mining (17.5%) and construction (16.5%).

Meaning no age range or industry is immune to addiction and its workplace costs. 

Employee Recovery substance abuse signs

 

HIDDEN COSTS OF SUBSTANCE ABUSE IN THE WORKPLACE

You may be confused about how that cost comes to be, and that's understandable. It seems unbelievable to think that one substance abuse addiction (much less more) can significantly impact a workplace's finances.

Here are seven secondary costs that cause that number to add up:

 

1. REDUCED PRODUCTIVITY

Employees struggling with mental health and/or substance abuse are a lot less inclined to be productive in a workday. Not only are they more distracted and unengaged, but they're more likely to work longer hours and distress themselves even further (more hourly pay and a further decline in employee health).

To give you a better idea, Business News Daily reports that productivity loss costs American businesses upward of $650 billion per year.

 

2. EXTENDED SICK LEAVES 

Along the lines of productivity, an employee struggling with addiction is also more likely to take more sick days to recover from their substance abuse, withdrawal, etc. 

In fact, the CDC Foundation reports that "productivity losses linked to absenteeism (regularly staying away from work without good reason) cost employers $225.8 billion annually in the United States, or $1,685 per employee."

 

3. LATE ARRIVALS & EARLY DEPARTURES 

Also strongly connected to productivity, an employee who is abusing substances (or dealing with recovery without help) is much more likely to arrive late and leave earlier. 

This, combined with less productivity, will inevitably cost your business money since projects are likely to take longer and individual goals won't be met in time to reach profit goals.

 

4. WORKPLACE ACCIDENTS 

An employee struggling with addiction is far more likely to get into a workplace accident that will cost your business.

Not only does Rapid Detect report that substance abusers are almost four times more likely to be involved in workplace accidents, but they say it will raise the cost of workers compensation costs — not to mention that abusers' medical costs can run 300% more than those of other employees, raising health care premiums as well.

 

5. PROPERTY & EQUIPMENT THEFT OR DAMAGE

Another problem to consider is the money that has to go into replacing property and equipment theft or damage after an employee with addiction either makes a big mistake on the job or decides to steal to support their addiction.

 

6. INCREASED EMPLOYEE TURNOVER 

The last thing employers want to deal with is an increase in employee turnover. However, it is inevitable if an employee's addiction gets too bad and support isn't available. Chances are they will be fired for not performing well or making too many costly mistakes — if they don't decide to quit without notice. 

This causes your team to spend time vetting different talent, interviewing, and training new hires, ultimately cutting into productivity as new talent ramps up to speed.

 

7. LEGAL LIABILITY 

While you likely have some sort of safety plan and insurance in place to prevent any legal liabilities associated with substance abuse, Rapid Detect reports that this isn't always enough to cover the costs.

"The issue of employee drug use is a legal liability," they explain. "The truth is that General Business Liability Insurance, most companies carry, is not enough to protect against legal costs that can drain cash flow and bankrupt your business."

 

DOING NOTHING COSTS MORE THAN ADDRESSING ADDICTION HEAD-ON

When it comes down to it, the costs of preventing and supporting employees who already have an addiction (or are vulnerable to having one) costs significantly less than ignoring the problem at hand. Addressing addiction head-on is the best measure employers can put into action to ensure the health of their employees and their business.

To learn more about how you can help employees fight addiction, contact our team at Employee Recovery for more information on EAP substance abuse and the cost of substance abuse in the workplace.

 

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