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Nearly $6,000: The Cost Burden of An Employee Who Smokes

Posted by Alere Health & Wellbeing on Jun 25, 2013 11:03:00 AM

tobacco cessationJust how much are smokers costing your company?

A compelling new study can help you answer the question with accuracy — and help you decide whether it makes financial sense to implement tobacco-free programs.

The study, conducted by Ohio State University researchers and published in Tobacco Control, found that businesses incur, on average, $5,816 per year in additional costs for each smoker they employ. Clearly, the researchers concluded, “the employee brings his or her addiction to work even if the act of smoking occurs elsewhere.”

Their analysis, which sheds new light on certain costs such as “presenteeism”,  is the first to consider a wide range of costs generated by smokers. Here’'s how the yearly financial burden breaks down: Smoke breaks, $3,077. Extra health-care costs: $2,056. Excess absenteeism, $517. Presenteeism (reduced productivity on the job), $462.

The researchers added up these costs, then subtracted the so-called “death benefit” — the $296 saved annually, per employee, in pension benefits because smokers die earlier than nonsmokers.

The resulting estimate, nearly $6,000, is high, but is likely an underestimate. For one thing, only 21 percent of companies offer defined benefit plans, so most employers don’'t reap the “death benefit.” Also, the researchers note, the analysis does not factor in higher workers’ compensation costs and higher life and fire insurance premiums for companies that employ smokers, since these costs vary greatly by industry.

In addition, the study doesn'’t consider costs related to cleaning or ventilation systems, which employers can control by implementing smoke-free workplace policies. Instead, the researchers focused on smoking-related costs that businesses can'’t control even if smoking were banned on the premises. Some studies estimate that presenteeism, as this reduced focus is called, can squander 4 percent of an employee’'s productivity, costing his or her employer nearly $1,850 per year. “Now that the vast majority of workplaces are smoke-free,” the researchers write, “the repetitive, prolonged withdrawals that smoking employees suffer predictably diminishes their productivity at work.” But for this study, the researchers used what they called a “very conservative” estimate, 1 percent.

Also conservative: the researchers’ estimate of lost productivity due to smoking breaks. They assumed each smoker smokes only two cigarettes outside of sanctioned break times and that it takes 15 minutes to smoke each cigarette.

As for health-care costs, the study addresses only the extra costs of smoking employees for employers who self-insure; these businesses employ about 55 percent of private employees. The researchers assume 8 percent of healthcare costs are due to smoking-related diseases, though some studies estimate this number to be as high as 14 percent.

How well do the study'’s estimates reflect your company’'s actual costs of employing smokers? The study makes it easy to plug in your own expenses and modify their calculations.

Of course, as the researchers note, effective smoking-cessation programs are not free, so that’s a cost to consider. But the authors also point out that the benefits of worksite cessation programs typically pay off in about four years — and that the payoff is hardly just financial. “The desire to help employees lead healthier and longer lives should provide additional impetus for employers to work towards eliminating tobacco from the workplace.”

 

Most of today’s smokers started as teens, and studies show 70 percent want to quit. If your company opts to help tobacco-dependent employees overcome their addiction, Alere Wellbeing, with 25 years of experience and 200 highly trained coaches, is well equipped to help you save money and save lives.

 

Topics: Health News, Smoking, Tobacco News, Workplace Wellness, Tobacco Cessation

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