Do you have a problem?  Or do you even know?

Whilst you may have heard improved productivity is a benefit of drug & alcohol testing your workforce, you may not have realised it is a tangible and measurable benefit. Once measured it can be managed.

CASE STUDY

What is the likely cost of lost productivity in a distribution centre with 200 employees?

CMMproductivity blog 1

Research & statistics demonstrate up to 20% of this employee demographic are illegal drug users, so 40 for this example.

With an average daily wage including “on-costs” say each worker costs $40.00 per hour, so $320.00 for an eight hour shift.

Research suggests loss of productivity for persons affected by illegal drugs to be 25%, let’s say 20% for this example.

Let’s keep this exercise very conservative. We’ll assume of the 40 illegal drug users they each only attend work affected by drugs twice per month.  On those occasions let us also assume they are only affected for half their shift, so 4 hours.

For these 4 hours they perform at 20% less productivity.

If your head is spinning at the prospect of mathematics – don’t worry we’ve calculated it below:

The calculation is now for 40 persons affected by drugs twice per month, with lost productivity of only 20% for half of their 8 hour shift.  The theme here is “conservative”.

On the above assumptions we calculate $30,720.00 in lost wage productivity per annum.

If you are surprised by the above, there is more. These calculations were for illegal drugs only.

Add alcohol to the calculations and you can at least double the result, so $61,440.00 in lost productivity as wages. (The alcohol cost can more likely be tripled or quadrupled compared to drugs because alcohol use is more prevalent than illegal drugs. However we will continue the conservative theme.)

Finally add another $10,240.00 for the 4% increase in absenteeism arising from drug & alcohol consumption combined per annum.

Lost productivity – drug use $30,720.00
Lost productivity – alcohol use $30,720.00
Lost time – increased absenteeism $10,240.00
Conservative Total $71,680.00

Consider your own workplace.

How would you approach the above calculations?  A slight increase in any of the conservative figures will result in significantly more lost productivity measured as wages.

If desired, adjust all the above results further upwards for – the relative “charge out” revenue generated by each employee rather than only measuring the wasted wage costs.

Every way you approach it drug & alcohol lost productivity costs can go up and up.

Modest spends on increased risk management for drug & alcohol use are the key step in recovering losses in productivity. We have not even discussed reduced risk of injury and accidents.

Add all that to the bottom line result for your business!

This blog post was provided courtesy of CMM Technology.

 
Rob O'ByrneRob O’Byrne
Group Managing Director
Email: [email protected]
Phone: +61 417 417 307