Is Drug Testing Expensive?

A national survey for drug use and health showed that 66 percent of the individuals that were 18 or older and abused drugs were employed (2010). This type of information would make one question how many employers are actually using drug screenings for their employees. It was shocking to discover that no pre-employment drug screening is used for more than 40 percent of companies. A drug testing efficacy poll by the Society for Human Resource Management (SHRM) reported that 64 percent of the companies do not require drug testing for their current employees (2011). Over 1,000 HR professionals from public, private, and non-profit organizations that represented a number of different industries were polled by SHRM, about the drug screening policies that they had in place.

Lack of Importance for Drug Testing

The SHRM poll showed that organizations gave a number of reasons why they don’t conduct an employee drug screening. Twenty-four percent of the organizations did not believe in performing drug tests. 18 percent opted out, because their state did not require drug testing. Sixteen percent of the organizations did not see any viable return on their investment in drug testing. Another sixteen percent believed that the cost of drug testing was too expensive. Some respondents stated that drug testing wasn’t applicable to their company or it was difficult to administratively implement the screening. 2 percent of the respondents did not perform drug screenings, but had plans to eventually incorporate the process.

Majority of the reasons for not having a drug testing program was tied to cost. Some organizations view drug screening as a voluntary measure, which could negatively affect their bottom line. So, they are hesitant when it comes to implementing a drug screening. This type of view has to be questioned. There is an up-front investment for drug screenings, but the comparison of costs or risks for not doing a drug screening could be substantial.

Benefits and Costs of Drug Testing

A SHRM poll shows that the cost of drug testing was less than $30 per person, for nearly 40 percent of the respondents. An additional 24 percent of the companies had a cost between $31 and $40. 19 percent of the companies had an expense of $41 to $50 for each test. For respondents that paid more than $50, the margin was slim. Some of the risks that come with a company not leveraging drug testing is a decrease in productivity, higher turnover rate, an increase in workers’ compensation claims, and increased absenteeism. It is necessary to focus on the cost of these risks and the benefits of applying drug testing.

Productivity

The common side effects of illicit drug use is well-known. One of those side effects is a decrease in productivity. An organization could easily waste thousands of dollars for compensating workers on payroll, who are not working at an expected capacity. A Working Partners, National Conference Proceedings Report (sponsored by the U.S. Department of Labor, Office of National Drug Control Policy, and Small Business Association) showed that individuals who abused drugs were 33 percent less productive, when compared to their peers. A SHRM poll showed that 19 percent of the companies that implemented drug testing had an uptick in their workers’ productivity.

Turnover Rate

An employee turnover rate can be increased by workers with substance abuse. The Substance Abuse and Mental Health Services Administration showed that a substance abuser changes jobs nearly three times, annually (2007). When an organization has a high turnover rate, they eventually spend more money on recruiting, hiring, and training new employees. This comes from continuously replacing workers. One SHRM poll showed that the employee turnover rate had a 16 percent decrease, after drug testing was implemented.

Workers’ Compensation Claims

Substance abuse can offset a person’s coordination, which could lead to injuries and accidents. This results in a company having a higher rate of workers’ compensation claims. The U.S. Department of Health and Human Services, National Institute on Drug Abuse reported that substance abusers nearly doubled the workers’ compensation claims costs for their employers.

Additional SHRM poll respondents that had a higher rate of workers’ compensation claims had a 50 percent decrease on average, after drug testing was implemented.

Absenteeism

Another common problem for substance abusers is being absent from work. When there is an increase in absenteeism, an employer is forced to pay more money for employee sick days. This results in an employer’s overall output being a lot less. The Working Partners, National Conference Proceedings Report stated that a substance abuser is 2.5 times more likely than their peers to be over eight days absent from work, every year.

A poll from SHRM displayed that absenteeism can be lowered with a drug testing program in place. Organizations that had an absenteeism rate that was higher than 15% saw an overall 50% reduction, after implementing drug screening.

The statistics of this benefit and cost analysis displayed how not performing a drug test can be a lot more expensive than the costs of an organization implementing drug testing. A return on investment is traceable, when it comes to drug testing. This is in the form of a turnover decrease, lower workers’ compensation claims, increased productivity, and less absenteeism.

StarterPad Staff

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