Business Cost of Smoker Employees vs Non Smoker Employees 

The U.S. Centers for Disease Control and Prevention (CDC) puts a $3,391 price tag on each employee who smokes: $1,760 in lost productivity and $1,623 in excess medical expenditures. In addition, estimated costs associated with secondhand smoke’s effects on nonsmokers can add up to $490 per smoker per year.1,2

Direct Costs of Tobacco Use

Direct costs are those dollars spent on health services. Direct costs include payments made out-of-pocket on healthcare benefits, disability, and workers' compensation.

  • In the United States, the direct medical costs associated with smoking totaled approximately $75.5 billion (average 1997-2001), according to the Centers for Disease Control and Prevention.
  • Businesses pay an average of $2,189 in workers' compensation costs for smokers, compared with $176 for nonsmokers.
  • Nonsmoking employees can receive workers' compensation, unemployment compensation, disability benefits, and other settlements based upon their exposure to secondhand smoke in the workplace.

Indirect Costs of Tobacco Use

Indirect costs are expenses not immediately related to treatment of disease. These non-medical expenditures include lost wages, lost workdays, costs related to using replacement workers, overtime premiums, productivity losses related to unscheduled absences, and productivity losses of workers on the job.

  • A national study based on American Productivity Audit data of the U.S. workforce found that tobacco use was one of the greatest causes of lost worker production time (LPT) — greater than alcohol consumption, family emergencies, age, or education. Additionally, LPT increased in relation to the amount smoked. LPT estimates for workers who reported smoking one pack of cigarettes per day or more was 75% higher than that observed for nonsmoking employees or employees who had previously quit smoking.
  • In 2005, the Centers for Disease Control and Prevention concluded that each employee who smokes costs employers $1,897 in lost productivity each year.
  • Approximately $92 billion (average 1997-2001) is linked with lost productivity resulting from smoking attributable diseases according to the Centers for Disease Control and Prevention.
  • On average, smokers miss 6.16 days of work per year due to sickness (including smoking related acute and chronic conditions), compared to nonsmokers, who miss 3.86 days of work per year.
  • Employees who take four 10-minute smoking breaks a day actually work one month less per year than workers who don't take smoking breaks.
  • The Organization for Economic Cooperation and Development calculates that construction and maintenance costs are 7% higher in buildings that allow smoking than in buildings that are smoke-free.
  • Employers in the United States could save $4 to $8 billion in building operations and maintenance costs if they implemented comprehensive smoke-free indoor air policies according to the U.S. Environmental Protection Agency (EPA).
  • The U.S. Environmental Protection Agency (EPA) estimates that smoke-free restaurants can expect to save about $190 per 1,000 square feet each year in lower cleaning and maintenance costs.
Workplace Costs of Tobacco Use
Employer Direct Costs Employer Indirect Costs
  • Greater health insurance costs and claims.
  • Greater life insurance premium costs and increased claims.
  • Greater disability costs.
  • Greater worker's compensation payments and occupational health awards.
  • Recruitment and retraining costs resulting from loss of employees to tobacco-related death and disability.
  • Lost productivity.
  • Greater amount of work time used on tobacco-use habits and routines.
  • Greater number of disciplinary actions.
  • Smoke pollution (increased cleaning and maintenance costs).
  • Air cooling, heating, and ventilation costs.
  • Accidents and fires (plus related insurance costs).
  • Property damage (plus related insurance costs).
  • Greater risk of industrial accidents and occupational injuries.
  • Liability and litigation costs associated with exposure to environmental tobacco smoke.
  • Illness and discomfort among nonsmokers exposed to secondhand smoke.

Smoker Employee Incentive Program

A 2009 study of employees of a multinational company indicated that financial incentives can increase tobacco cessation program enrollment rates, completion of programs and abstinence rates.

Examples of incentives:

  • Benefit enhancements.
  • Lower deductibles.
  • Reduced premiums.
  • Flexible benefit credits to attend smoking cessation classes
  • Cash incentives for smoking cessation treatments
  • Cash incentives for health education programs.
Advantages of Incentives Disadvantages of Incentives
  • Easy to set up and operate.
  • Very flexible and adaptable.
  • Can have significant behavioral impact.
  • Can be designed for different departments and different levels.
  • Can be linked to organizational goals and objectives.
  • Encourage cessation program participation.
  • Give employees a positive focus.
  • Reinforce motivation to quit.
  • Reinforce employees' not using tobacco.
  • Determining the best reward may be difficult.
  • Employees can falsify cessation attempts.
  • Non-tobacco users might feel slighted.

1 Kristein, “How Much Can Business Expect to Profit From Smoking Cessation?” Preventive Medicine, 1983; 12:358-381.2 Jackson & Holle, “Smoking: Perspectives 1985,” Primary Care, 1985; 12:197-216

Source: Smoke-free work sites top ten financial benefits to employers. Western CAPT/CASAT. University of Nevada, Reno.

Center for Health Promotion Publications. The Dollar (and sense) Benefits of Having a Smoke-Free Workplace. Lansing, Michigan Tobacco Control Program; 2000.

Centers for Disease Control and Prevention. Making your Workplace Smoke-Free: A Decision Makers Guide.

 Above Information obtained from:

 http://www.no-smoke.org/pdf/businesscosts.pdf  and http://www.businessgrouphealth.org/tobacco/benefits/index.cfm

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