Calculating Costs of Substance Abuse for Employers by State and Industry

Written by Lucas Kibby, CleanFleet

There are lots of statistics out there on the effects of alcohol and substance abuse on workplaces in the U.S. but it has been hard to calculate the costs for individual businesses in individual states.

Now, the National Safety Council (NSC), Shatterproof, and the National Opinion Research Center (NORC) collaborated to build the Substance Use Cost Calculator for Employers to help estimate the costs of employee drug use on businesses based on their industry, state, and number of employees in the company.

The statistics of alcohol and drug abuse in the United States

Alcoholism is estimated to cost 500 million lost workdays annually and substance abusers are 3.5 times more likely to be involved in workplace accidents. It is also estimated that up to 40% of industrial fatalities and 47% of workplace injuries can be linked to alcohol consumption.

Illicit drug use and alcohol abuse affect all employees, not just the users. A survey sponsored by NIDA found that drug-using employees are 2.5 times more likely to have absences of eight days or more, 2.2 times more likely to request early dismissal or time off, 3 times more likely to be late for work, and 5 times more likely to file a workers’ compensation claim.

Moreover, according to the American Council for Drug Education, substance abusers don’t have to use drugs or drink while at work to negatively impact their workplace. Compared to coworkers, substance abusers are 33% less productive and 10 times more likely to miss work.

Calculating the costs of substance abuse in the workplace

The calculator combines the latest research on employment costs with data from National Survey on Drug Use and Health (NSDUH). It provides businesses with “specific information about the cost of substance use in their workplace,” according to the NSC, including:

• prescription drug abuse and misuse
• alcohol abuse and misuse
• opioid and heroin addiction
• abuse of other illicit drugs and marijuana

One analysis for a construction company with 150 employees in Oregon, which is ranked as one of the highest for prevalence of substance use disorder by industry, the estimated annual cost of substance abuse is $68,183 and is affecting 25 employees and 27 dependents & family.

• Cost of lost time = $27,200 (based on an avg. 108 days off work and 2 employee errors involving incident or safety risk annually)
• Cost of job turnover and re-training = $21,925 (based on 3 employees annually)
• Cost of healthcare = $19,058 (based on 5 days in hospital, 8 emergency room visits, and 10 outpatient visits annually)

In Vermont, where the state has one of the strictest drug testing laws and is about to pass a bill to legalize marijuana in the state, is also ranked one of the highest for prevalence of substance use disorder by industry. The calculator estimates the annual cost of substance abuse for a construction company with 250 employees is $114,420 and is affecting 42 employees and 45 dependents & family.

• Cost of lost time = $45,696 (based on an avg. 181 days off work and 3 employee errors involving incident or safety risk annually)
• Cost of job turnover and re-training = $36,834 (based on 5 employees annually)
• Cost of healthcare = $31,890 (based on 9 days in hospital, 13 emergency room visits, and 17 outpatient visits annually)

Think About It

The cost of replacing an employee can range from 25% to 200% of their annual compensation. Add to this cost the additional legal and financial liabilities attached to a dismissal that is associated with drug use or a workplace injury. If you could significantly reduce your turn-over and risk liabilities, would it be worth it investigate whether a random drug and alcohol testing program could be beneficial to your business?

Workforce drug and alcohol screening has become an important tool for companies to help reduce these common effects of misuse in the workplace.  Using customized CleanForce programs, we can help your organization establish and manage a full-service drug and alcohol screening program designed to each individual employer and budget.  We manage the entire program.

A variety of screening methods can be used including hair, oral fluid, and urine. The breadth of the test is determined by you.  SAMHSA Certified Labs are used to ensure the highest accuracy in every test. You may even choose to have a Medical Review Officer review test results.

Let CleanFleet take the work and worry out of managing your Workforce Drug & Alcohol Screening program. Call us today to arrange a consultation with our expert staff at 503-479-6082.