A Drug and Alcohol Policy Can Save You Time and Money

Written by Zohaib Khan at Drager Safety Diagnostics, Inc.

Ever since the federal Cannabis Act came into effect in the fall of 2018, drug and alcohol misuse has increasingly become a popular topic of conversation for employers across Canada. 

But not only is it a hot topic, it’s a costly one too! 

Proven to drastically reduce productivity in the workplace, substance abuse costs more than $38.4 billion every year. That’s the equivalent of $1,100 for every Canadian, according to a report by the Canadian Centre on Substance Use and Addiction and its partner the Canadian Institute for Substance Use Research.

Increasing our understanding of the implications of drug and alcohol misuse in the workforce is an important part of developing a robust and cost-effective strategy for addressing these issues. Early detection of a problem also prevents more serious circumstances from developing, saving costs in the long term.

Having an effective drug and alcohol policy in place for your company’s operation will not only keep your workers safe, it will also protect your bottom line.  To learn how to put a practical drug and alcohol policy in place, you may download the whitepaper by clicking here.

Seven reasons why

The following are seven ways that investing in a drug and alcohol policy can save time and money:

Days Off – Employers that implement an effective policy save significantly in terms of lost time and days off.  Individuals not affected by drugs and alcohol are far less likely to take as many sick days. Substance use results in absenteeism in the short-term as a result of impairment, illness or something as simple as a hangover. In the long term it may result in more serious physical and mental illness. Drugs and alcohol have been linked with a wide assortment of side effects, such as damaged internal organs, respiratory problems, muscle and bone breakdown, long-term memory loss, etc.

Productivity – Lost productivity attributed to substance use five years ago cost $15.7B, according to the Canadian Substance Use Costs and Harms report.  That is an average individual cost of $441 per person. In the Northwest Territories and Nunavut that number skyrockets to more than $1,200 per person.  An effective drug and alcohol policy identifies problems before they get out of hand and prevents behaviour that leads to poor job performance and lost productivity.

Staff Turnover – A strong policy means saving on the costs of recruiting and training new employees to replace those who have left, as well as a reduction on the high cost of temporary staff cover in the event of sick leave. Direct costs associated with staff turnover include separation costs (exit interviews, severance pay) and replacement costs (advertising the position, conducting interviews, employment testing, training, orientation, certifications, etc.). The indirect costs of employee turnover include factors such as low productivity, reduced engagement, lost institutional knowledge and drooping morale.
If you’re curious how much it costs to replace an employee, check out this Turnover Calculator Tool from Canada Human Resources Centre.

Staff Management Costs – A better policy and a happier, healthier workforce over the long term means reductions in staff management costs and hidden costs such as theft from the company, health related costs and higher insurance.  Many benefits packages include medical and psychological support services, but all of these programs—as important as they are—impact the bottom line.  To learn more about the types of drugs that may impact your employees read the ABCs of Drug Use.

Improved Team Morale – The knock-on effects of drug and alcohol misuse may impact the well-being and productivity of the whole team, and a successful drug and alcohol program may lead to increased morale.  In an industry such as construction, workers typically spend long hours in close proximity and rely on each other to stay safe. There is zero tolerance for a team member that isn’t pulling their weight or demonstrates any signs of being unreliable. If a company appears to be accepting of sub-par performance, this can de-motivate hardworking employees that feel their efforts are not being rewarded. 

Potential Lawsuits – With the high cost of lawyer’s fees, no one wants to deal with a lawsuit if they can avoid it. A reduction in substance use-related accidents also means a reduction in costly compensation claims.  Businesses can save significant sums by having a policy in place to deal with claims at the outset. According to the Canadian Centre on Substance Use and Addiction report, almost $9 billion was spent on substance use-attributable criminal justice costs in 2014.

Reputation Management – And when lawsuits arise, so does the need for reputation management. Hiring specialized public relations consultants, holding press conferences, writing press releases and the impact on company stock prices is incredibly costly. Many industries are already under intense public scrutiny and cannot afford the bad press that comes along with safety violations as a result of substance abuse.

You can’t put a price on a company’s reputation. Enhancing the public perception of a business as a responsible and caring employer is one of the benefits of having a carefully thought-through policy in place.

Safety is priority one

While every project and situation is different, risks including safety, absenteeism and productivity have the potential to impact the individual, other employees, the business, and the public.

Having a detailed drug and alcohol policy in place helps to ensure all employees are aware of the risks, consequences and legal costs of their actions. Ultimately, ensuring people are fit and safe to work should be a top priority for all Canadian industries and businesses.

Investing in a robust drug and alcohol testing policy in the workplace has many advantages. To learn more about putting a practical guide in place, follow the link to download the guide Drug and alcohol testing policies—can you afford not to have one?.