A hand pouring out prescription pills.

The Human and Financial Costs of Substance Misuse in Your Workplace

Cal Beyer
Cal Beyer
Holmes Murphy

As a risk management and safety professional in the insurance industry and previously for a construction contractor, I have been responsible for identifying and helping to implement proactive, practical, and cost-effective risk mitigation and cost-containment strategies.

Dating back to the mid-1990s, there was growing evidence that workplace drug testing programs could achieve these goals of risk and cost reduction. Increasingly, large employers instituted substance use testing to screen employees. Likewise, owners of construction projects required comprehensive substance use testing as a prequalification requirement for contractors bidding their projects. Governmental regulations for a drug-free workplace became a standard.

Unfortunately, despite these efforts to counter the effects of substance misuse, the problem has worsened. Drug testing policies and drug-free workplace programs are not sufficient to address workplace substance misuse. Stigma towards substance misuse runs high and creates a barrier that keeps people from seeking help. In fact, well less than 10 percent of persons with substance use disorder receive help.

Today, more than ever, employers must learn the causes, consequences, costs, and counter-controls for substance misuse.

The Rising Risk of Substance Misuse

Recent reports continue to highlight America’s growing problems with substance misuse. Data from the 2021 National Survey on Drug Use and Health (NSDUH) reveals 16.5 percent of the U.S. population aged 12 and older meet criteria for having a substance use disorder, including alcohol and/or drug use disorders. This amounts to over 46 million individuals intertwined with our communities, workplaces, and families.

An article from the “Journal of Occupational and Environmental Medicine” reported, “seventy-five percent of adults experiencing an untreated substance use disorder are in the workforce.”

Similarly, a poll undertaken by the National Safety Council in 2019 reported that 75 percent of employers indicated their workplaces have been impacted by opioid use.

More recently, the U.S. has experienced tragic consequences of substance misuse. One measure is the 25 percent spike in alcohol-related deaths during the pandemic. In addition, there were over 107,000 overdose deaths reported in 2021, with 70 percent of these involving opioids and 75 percent of the opioid-related overdoses involving the synthetic fentanyl.

The Bureau of Labor Statistics’ Census of Fatal Occupational Injuries has reported a rising number of workplace or jobsite fatalities from unintentional overdose from nonmedical use of drugs or alcohol for eight consecutive years. This is one reason many employers have been considering stocking naloxone (or Narcan) at workplaces or jobsites. This will be getting easier in the near future with the approval by the Food and Drug Administration (FDA) for over-the-counter naloxone.

Substance Misuse and Human Capital Risk Management

Substance misuse is a human capital risk management challenge for businesses.

To better understand the potential return on investment for addressing substance misuse, consider the potential human and organizational consequences of substance misuse:

Human Consequences of Substance Misuse

Shame and low self-esteem Deteriorating life quality
Damaged family and relationships Legal problems
Risk of job loss and employee health insurance Comorbid chronic health conditions
Financial instability Risk of relapse with a potential for overdose

Organizational Consequences of Substance Misuse

Absenteeism and tardiness Quality issues and upset customers
Lost productivity “Near hits” and safety incidents
“Presenteeism” Potential workers’ compensation claims
Turnover and retraining costs Increased healthcare claim costs

Impact of Untreated vs. Treated Substance Use Disorder on Your Workplace

The prevalence of substance use disorders is rising. The National Safety Council reports on average 1 in 12 workers (8.5 percent) has a substance use disorder. The rate is higher for some industries, such as construction with a rate of 19 percent.

On a macro level, the “Journal of Occupational and Environmental Medicine” asserts that the annual cumulative cost of substance misuse in the U.S. economy exceeds $400 million. On a microeconomic level, the National Safety Council reports employers spend an average of $8,817 annually on each employee with an untreated substance use disorder SUD. Moreover, the National Safety Council further reports that hiring employees in long-term recovery positively impacts your workplace. Every employee who recovers from a substance use disorder saves a company over $8,500 on average.

Workers in recovery are strong employees who experience lower turnover rates, higher productivity, lower healthcare utilization and costs, and decreased absenteeism. Specifically, workers in recovery miss 13.7 fewer days each year than workers with an untreated substance use disorder and 3.6 less days than an average employee.

Substance Use Cost Calculator

I’ve observed when governmental and academic sources report macroeconomic data, the numbers frequently seem incomprehensible to leaders of small and medium businesses. I, therefore, seek to find data to help translate the macro-data to the firm level.

The best tool I’ve discovered is the Substance Use Cost Calculator from the National Safety Council. Using this tool, leaders can prepare a downloadable “customized report” for your business by filling data into a few blanks, including industry group, state (or states) of operations, and the number of employees you have in your organization.

I’m using the Substance Use Cost Calculator to help to explain to companies the risks of untreated substance use disorders. This tool is reinforcing the value of educating managers and supervisors on the warning signs and consequences of substance misuse. More employers are sharing resources with all employees of addiction treatment and recovery groups within local communities.

If you’re seeking additional resources, the U.S. Substance Abuse Mental Health Services Administration (SAMHSA) maintains a searchable database of publications and digital resources for both mental health and substance abuse. Resources are available in both English and Spanish.

Our experts at Holmes Murphy are also available to help and can ensure you’re pointed in the right direction should you need it. All you have to do is reach out to us.

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