Drug and alcohol testing requires an investment in testing kits and screening services, so it is tempting for small businesses to postpone implementation. That decision can be a serious and expensive mistake. As is true for any financial decision, there must be a measurable Return on Investment (ROI). Implementing drug and alcohol testing programs can save any size business a significant amount of money in a number of ways.
Not-So-Hidden Costs of Substance Abuse
One of the factors in the calculation of the Return on Investment for drug and alcohol testing programs is worker’s compensation. All businesses must have workers’ compensation. The rates are based on industry claims and wages experience, and in some insurance schemes, the actual experience of employers at each place of business. The exception is that a few jurisdictions allow self-insurance, but most companies that can afford to be self-insured are large employers. In cases where the employer fails to keep a policy of insurance in force, WorkCover will cover the expenses of an employee’s work related injuries or death but will most likely sue the employer to recover those expenses plus penalties and past due insurance premiums.
Workers, and legislatively deemed workers like miners and horse jockeys, are covered by worker’s compensation when at work, journeying to and from work, travelling for the employer, and/or whilst on break at or away from the work premises. Workers’ compensation covers work related injuries or impairment, occupational diseases, and work related death. The number of serious claims with one (1) week or more of incapacity represents staggering financial and productivity losses. In 2008-2009, the statistics are as follows: NSW (42,640); Victoria (24,130); Queensland (31,060); WA (12,670); SA (9,010); Tasmania (3,500); NT (1,290), ACT (1,640); and the Commonwealth (2,660); for a total of Australia (128,600).1
Small Business Workers Can Just as Easily Get Injured
What does this have to do with drugs and alcohol? Employees using drugs and alcohol are more likely to be injured at work. The size of a business has no relationship to the likelihood of a worker, who is under the influence of substances, experiencing an accident. It is estimated that drug-related accidents cost Australian workers approximately half of $1.6 billion annually. It is also estimated that 2% of Australians show up for work under the influence of alcohol.2 Random drug and alcohol testing can reduce the number of worker accidents, which lowers the industry and employer premium rates and increases the ROI.
A business can have 5 employees or 1,000 employers, and each worker using drugs or alcohol is more likely to have an accident, costing the worker and the employer. The cost of workers’ compensation is just one factor used in the Return on Investment calculation for alcohol and drug testing programs. Small businesses can also lower absenteeism rates and increase worker productivity levels by ensuring the staff is substance free.
The size of the staff is not only irrelevant, it is even more financially critical for small businesses to manage expenses as tightly as possible. Implementing a policy for a drug free workplace supported by workplace substance testing makes financial sense. The ROI far exceeds the costs of testing kits and screening costs.
The bottom line is that small businesses cannot afford to not do drug and alcohol testing. That is precisely why CMM Technology at http://cmm.com.au/ offers a variety of affordable testing equipment and screening services to fit all business sizes.
1 Safe Work Australia. (2011, March). Comparison of Workers’ Compensation Arrangements in Australia and New Zealand. Retrieved from Australian Commonwealth:
2 Drug and Alcohol Services South Australia. (2011, February). Alcohol and Other Drugs in the Workplace. Retrieved from Drug and Alcohol Services South Australia: http://www.dassa.sa.gov.au/site/page.cfm?u=153