How Much Does Addiction Cost Employers – And How Can Employers Help Address and Prevent Substance Abuse

By Deni Carise, PhD, Chief Science Officer, Recovery Centers of America

Substance use disorders (SUDs, the preferred term for addiction) are among the most common and costly health conditions affecting Americans, particularly during our nation’s current opioid crisis. Yet despite estimates that the economic cost of SUD in the United States is approximately $3.73 trillion annually, employers may not see how substance use in general and diagnosable substance use disorders, impact their workplace or bottom lines.

SUD comes with numerous personal costs of course: poor health, broken relationships, financial hardships, and more. But one’s actions extend to those who employ them, companies large and small.

Seventy percent of people who use illegal drugs are employed either full or part time, and 1 in 10 adults have had or will have a diagnosable SUD in their lifetime. A full 75 percent do not receive any form of treatment. It is critical to examine these implications in the workforce

The National Council on Alcoholism and Drug Dependence (NCADD) estimates that SUD costs employers $81 billion annually through lost productivity and absenteeism, turnover and recruitment costs, workplace accidents, health care expenses, and disability and workers’ compensation. In addition, according to NCADD, SUD can affect the workplace through:

• Hangovers and withdrawal that affects job performance and, in some industries, puts lives at risk.
• Employee preoccupation with obtaining and using substances while at work, interfering with attention and concentration.
• Illegal activities at work including providing/selling drugs to other employees.
• Psychological or stress-related effects of drug use.

Overall company morale, interpersonal work relations, and teamwork likely also pays a price.

So how can an employer assess the severity of this issue in their own business? Based on data from the long-standing National Survey on Drug Use and Health (NSDUH), the National Safety Council has collaborated with an independent research institution, NORC at the University of Chicago, to update “The Real Cost of Substance Use to Employers” tool, originally developed in 2017. This cost calculator is an authoritative, easy-to-use tool providing business leaders with specific information about the cost of substance use (including use and misuse of prescription drugs, alcohol, opioid, and heroin, as well as use of other illicit drugs and cannabis) in their workplace based on the size of their employee base, industry, and geographic location.

The purpose of the tool is not to instill fear or inflame SUD stigma with employers. Rather, the tool illustrates the cost/benefit of employers identifying individuals struggling with substance use, then offering treatment and prevention options for their employees. Substance use disorder is preventable and treatable. An employer can play an important role by promoting employee assistance programs (EAPs) or helping with referrals to resources and services should someone be struggling. Employers can also implement workplace health and wellness initiatives which have been shown to improve the health of employees and their family members leading to a decrease in use of costly medical benefits. After all, a mentally and physically healthy employee is less likely to take up substance use.

Ultimately, understanding this information can help create better working relationships between employers and their employees, while demonstrating the cost savings of addressing drug and alcohol use in the workplace as opposed to ignoring it. There are numerous benefits to addressing these issues head-on. One study found that employees in recovery (compared to those with untreated SUD) saved their employers:

• An average of $536 per year in health care utilization and costs.
• Up to $4,000 in turnover and recruitment costs.
• Up to $8,400 in lost productivity.
• Costs related to unscheduled leave time.

Another analysis indicated that the total benefit to society of treatment for substance use disorder versus no treatment is over $534 billion.

Experts say the job market is hot right now as the nation returns to “normalcy” following pandemic-related shutdowns. Perhaps companies can set themselves apart by playing a role in addressing employee drug or alcohol use and misuse by linking to various prevention and treatment efforts. If not just because it is the right thing to do, or because it can impact the rest of the workplace, then because it can demonstrably affect their bottom line.

For Human Resource and Employee Assistance Professionals in need of resources for SUD in the workplace, please click here.