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Did You Know?

About 19.2 million U.S. workers (15%) reported using or being impaired by alcohol at work at least once in the past year (Frone, 2006).

Fast Facts

  • Replacing an employee costs from 25 percent to almost 200 percent of annual compensation—not including the loss of institutional knowledge, service continuity, and coworker productivity and morale that can accompany employee turnover (Branham, 2000).
  • Employee turnover costs American industry an estimated $11 billion a year (Ivancevich, 1998).
  • Savings from investing in substance abuse treatment can exceed costs by a ratio of 12 to 1 (National Institute on Drug Abuse, 1999).

How Much Do Substance Use Disorders Cost?

Employers may recognize that excess alcohol and drug use can harm their business. But until now they've had difficulty quantifying its cost.

Substance use disorders cost the nation an estimated $276 billion a year, with much of the cost resulting from lost work productivity and increased healthcare spending. Given that 77 percent of people with drug or alcohol problems are employed, employers have a major stake in ensuring that employees have access to substance abuse treatment.

How Substance Use Disorders Impact Employers

  • Increased healthcare and insurance costs
    • Individuals with untreated substance use disorders have significantly higher heath care costs and utilization than individuals without a substance use disorder.
    • Family members of employees with substance use disorders have more health problems, and higher health care costs, than family members of employees without substance use disorders.
    • People who abuse drugs or alcohol are three and one-half times more likely to be involved in a workplace accident than other workers. 
  • Reduced productivity
    • Employees who use drugs, consume alcohol at work, or drink heavily away from work are more likely than other employees to exhibit job with­drawal behaviors, such as spending work time on non-work-related activities, taking long lunch breaks, leaving early, or sleeping on the job.
      • Did You Know?
      • Investing in substance use treatment can yield savings that exceed costs by a ratio of 12 to 1 (National Institute on Drug Abuse, 1999). Savings are greatest when treatment is tailored to the individual’s needs.
      • Providing employees with comprehensive health plan benefits that support a broad range of services, including screening, brief intervention, counseling and medical services, promotes customized treatment for alcohol problems.
      • Light and moderate alcohol users, higher in number than alcoholics, cause 60 percent of alcohol-related absenteeism, tardiness, and poor work quality (Mangione, Howland, & Lee, 1998).
      • Employees who drink heavily off the job are more likely to experience hangovers that cause them to be absent from work; show up late or leave early; feel sick at work; perform poorly; or argue with their coworkers.
    • Increased worker turnover
      • People with drug or alcohol problems were more likely than others to report having worked for three or more employers in the previous year.

    Increased safety risks

    Up to 40 percent of industrial fatalities and 47 percent of industrial injuries can be linked to alcohol consumption and alcoholism. Alcohol-related accidents contribute to more workers’ compensation claims, and more claims mean higher insurance premiums.

    Additional costs include:

    • increased use of worker's compensation and disability benefits
    • diverted supervisory, managerial and coworker time
    • friction among workers
    • damage to a company's reputation
    • increased liability theft and fraud

    The profound effect of problem drinking and drug use on family life also shows up in the workplace. If an employee lives with someone who has a substance use disorder, his or her job performance and attendance may suffer. Problem drinking and drug use can lead to higher employer health care costs for covering the entire family, not just the person with the substance use disorder.

    The Substance Use Disorders Cost Calculator for Business uses prevalence rates of problem drinking and drug use for various industry sectors to broadly measure its impact on specific workplaces.

    Learn what you can do to reduce the business costs of substance use disorders