Human Resources: Executive Summary: Substance Abuse

Substance abuse costs U.S. business in a variety of direct and indirect ways. Untreated addiction in employees drives up medical costs, employee turnover, on-the-job accidents, and absenteeism, and it lowers productivity.

According to the Department of Labor (DOL), substance abusing workers are more likely to take time off of work, are less productive and complain about working conditions more frequently. They are also more likely to experience family problems that often carry over and impact job performance.

Addiction is not an uncommon problem. According to the National Institute on Alcohol Abuse and Alcoholism, nearly one in every 10 adults in the U.S. has some sort of addiction disorder, and most of them are working. The U.S. Department of Health and Human Services said that in 2003, most adults with substance abuse problems were employed.

Beyond the obvious safety issues related to worker substance abuse, the health-related costs associated with the use of legal substances, primarily alcohol and tobacco products, are coming into focus for employers. Alcohol-related costs add $23 billion per year in U.S. healthcare expenditures, according to estimates by the George Washington University Medical Center.

The DOL estimates that the financial toll traceable to employee drug abuse is significant - U.S. business loses $44 billion each year because of drug-related illness, and $37 billion in losses are attributed to premature drug-related deaths of workers.

The effect of employee substance abuse on the workplace creates a need for practical planning and action on the part of management and HR, beginning with examining workplace substance abuse policies. Perhaps the tough stance adopted by some employers regarding cigarette smoking foreshadows possible approaches to substance abuse down the road. What may have once seemed hard to imagine is now reality for many U.S. workplaces: smokers need not apply.

Managing increased heathcare costs related to cigarette smoking is the reason cited by some employers for banning cigarette smoking on company property. And some employers are taking it a step further by refusing to hire smokers altogether and requiring employees who do smoke to quit the habit or look for employment elsewhere.

One controversial move on the part of a Michigan employer in 2005 may portend similar approaches adopted by employers in states that, like Michigan, do not have "smokers' rights" laws on the books. The employer notified workers one year in advance of the impending change in company policy regarding smoking. Employees may not smoke, on or off the job, period, and workers were offered assistance with smoking cessation. When the policy went into effect, 20 employees quit smoking and four employees chose to quit their jobs rather than be forced to stop smoking. The president of the company said the policy is due in part to increases in smoking-related healthcare costs.

Another company with a no-smoking policy says it has lower healthcare cost increases than other like-size companies, and employees appreciate the no-smoking policy. The company noted that nonsmoking workers appreciated that their co-workers were not away from their workstations on repeated "cigarette breaks" throughout the workday. These policies are not possible nationwide because 29 U.S. states have laws that protect smokers from discriminatory employment practices and policies, but there is an undeniable shift in attitudes over the past 20 years.

The issue of drug testing and employee privacy is an ongoing debate that seems to be heating up along with technological advances in testing.

Even if substance abuse is not occurring in the workplace, what employees do off the job may affect how they perform on the job, a point that is a potential minefield for employers, rife with concerns about privacy rights as well as accountability and, ultimately, the bottom line for business.

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The Institute for Corporate Productivity (i4cp, inc.) improves corporate productivity through a combination of research, community, tools and technology focused on the management of human capital. With more than 100 leading organizations as members, including many of the best-known companies in the world, i4cp draws upon one of the industry’s largest and most-experienced research teams and Executives-in-Residence to produce more than 10,000 pages annually of rapid, reliable and respected research and analysis surrounding all facets of the management of people in organizations. Additionally, i4cp identifies and analyzes the upcoming major issues and future trends that are expected to influence workforce productivity and provides member clients with tools and technology to execute leading-edge strategies and "next" practices on these issues and trends. i4cp is a for-profit company with offices in St. Petersburg, Florida.