Bottom Line Analysis


An estimated bottom line analysis can help to determine the costs associated with substance abuse in the workplace.

This equation is based upon national statistics and a study done by the National Institute on Drug Abuse (NIDA) and the Arizona State University. Your company's situation may vary, but this guide will help you estimate the cost of substance abuse to your company.

The estimate is only the minimum and does not take into account the theft of company property to pay for drug habits or the costs relating to damage of company property due to the carelessness of impaired employees. It does not consider loss of customer good will or the lowered employee morale that can occur because of substance abuse in the workplace.

  1. Number of full-time employees _____________________
  2. Total annual wages and benefit costs _____________________
  3. Average wage and benefit cost per employee (#2 divided by #1) _____________________
  4. Number of employees impaired by substance abuse (10% of #1) _____________________
  5. At best, an employee operates at only 75% of the expected norm; calculate the lost productivity (#4 x #3 x 25%) _____________________
  6. In addition, 20% of health insurance benefits are paid to cover substance abuse related claims, so calculate the cost of increased health insurance (20% of total annual claims) _____________________
  7. With a drug free workplace program your company can obtain a 5% premium discount on workers' compensation (calculate 5% of your premium) _____________________

Bottom Line
By not adopting a drug free workplace program, it can cost your company an annual minimum of (#5 + #6 + #7) _____________________