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The Benefits of Pre-Employment Drug Testing

The Benefits of Pre-Employment Drug Testing

According to recent studies, less than half of employers conduct pre-employment drug testing of all new hires.

That’s a substantial decrease compared to the mid 1990’s when nearly 80 percent of employers did so. Has substance abuse gone away? Are applicants today less prone to risks of drugs than they were 20 years ago? The simple answer is no!

In fact, substance abuse, especially marijuana and prescription drugs, is increasing to epidemic levels. So why are fewer and fewer employers conducting pre-employment drug testing? Quite simply, they fail to properly recognize the benefits. However, the benefits of pre-employment drug testing are just as applicable today as they were 20 years ago. In fact, with the increase in drug abuse, healthcare costs and employer liability claims, they are even greater than ever before. They range from direct, short-term cost savings to indirect, long-term increase in quality work.

Deterrence – Drug Users Don’t Want to Be Drug Tested

A few years ago, JCB, a heavy-equipment manufacturer, held a job fair near Savannah, Georgia.  When the throng of potential employees learned that the next step of the application process would be a drug test, about half of them left.1 Had that group of potential employees initially numbered 30, then that would mean about 15 of them refused to continue because of drug testing.  We cannot assume that all of them were drug users; however, we can safely assume that at least some of them aborted the application process because they were current drug users.

Drug testing is not only smart for public safety and workplace safety; it is also fiscally responsible for employers.

The value of drug testing can be measured in many ways, but perhaps the most significant way is knowing that drug abusers hate drug testing. Often when drug abusers learn that a company conducts drug testing they turn around and walk out the door without even completing the job application. Before they can get hired, use company resources for onboarding and training, cause an accident, file a workers’ compensation claim, or steal from a co-worker, they apply for work somewhere else where drug testing is not conducted. By not conducting pre-employment drug testing employers unwittingly become “that other company.”

Direct Cost Savings – Return on Investment Calculations

Let’s crunch some numbers. The average cost of a pre-employment drug test is $45. The average turnover cost for an entry level employee is $6,600. Studies have found that substance abusers are twice as likely than non-substance abusers to work for three or more different employers in a one-year period. That’s a lot of turnover at a high cost to employers.

Consider a company that conducts 100,000 pre-employment screens. According to drug testing results from nation-wide labs, approximately 3.5 percent of all pre-employment screens are positive. Using 100,000 as our base, 3.5 percent equals 3,500 positive results. That is 3,500 job applicants who could cost the company $6,600 each if they decide to quit and find a different job within the year, which they are more likely to do than employees who are not regular drug users.  If all of them are hired and subsequently decide to leave the company, that would lead to $23,100,000 in turnover costs alone. To conduct 100,000 pre-employment screens at $45 per test will cost $4,500,000. If these candidates are screened out before they can become employees, that testing saves $18,600,000. Divide that number by the cost of testing and that creates a savings ratio of just over 4-to-1.

No matter what the actual number of pre-employment drugs tests you perform, the ratio stays the same. So even at a smaller scale, pre-employment drug testing offers a 4-to-1 return on investment. And this is only considering turnover costs. Once workers’ compensation, health care, lost productivity, and extra sick leave costs are calculated, the ratio increases in an employer’s favor even more.

Conclusion

Substance abuse is not going away. In fact, it is safe to assume that it will continue to spread in the United States and globally. More people are using drugs than in the past 15 years. The full cost of this shift towards wider spread substance abuse is yet to be discovered, but based on what we know now, the cost to employers will be significant. Employers have the right to test for drugs and maintain a safe work environment.  Drug testing is not only smart for public safety and workplace safety; it is also fiscally responsible for employers. An updated drug testing policy, continued education based on science and statistical evidence, and continued pre-employment drug testing programs work!

  1. Calmes, J. (May 17, 2016).  The New York Times.  Hiring Hurdle: Finding Workers Who Can Pass a Drug Test.  Retrieved from http://www.nytimes.com/2016/05/18/business/hiring-hurdle-finding-workers-who-can-pass-a-drug-test.html?_r=0

   

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