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Cut Costs and Increase Safety with Pre-employment Drug Testing

A national expert on drug-free workplaces makes the business case for investing in drug screening.

Maintaining a drug-free workplace is an important component of a safe working environment. In this year of major cost-cutting and shrinking budgets for occupational health and safety programs, however, how do you justify drug-screening initiatives? Most significantly, can you show a positive return-on-investment for establishing or continuing a comprehensive drug-testing program?

The good news is yes, you can. The following should help make the case for drug screening.

Pre-employment Drug Screening: Is It Effective?

Pre-employment testing continues to be, by far, the most common type of drug testing. Pre-employment testing is required as part of several federal government drug-testing programs and regulations, including the Department of Transportation (DOT). It is also required by almost every state that offers workers' compensation premium discounts to employers who conduct drug testing in accordance with specific state guidelines.

Pre-employment testing is virtually hassle-free. Employers are free to conduct pre-employment drug testing just about whenever and of whomever they choose. It's outside the dictates of collective-bargaining agreements per the National Labor Relations Board. Individual state laws that regulate employment drug testing typically allow employers wide latitude when it comes to screening applicants.

A good deal of research supplies evidence for the value of pre-employment drug testing from a pure business standpoint. Drug users are far more costly to employ than nonsubstance-abusing workers. As employers avoid hiring drug users, they save thousands of dollars each year through reduced accidents, absenteeism, theft, violence and health care costs.

American Management Report

According to the American Management Association (AMA), the percentage of the nation's largest companies that conduct drug testing increased from 21.5 percent in 1987 to nearly 88 percent in 1997, the final year the association conducted its annual survey on corporate drug testing practices.

AMA found that nearly 68 percent of firms that drug test screen all applicants, while others only screen applicants for certain positions. The AMA survey also found that between 4 percent and 5 percent of applicants test positive for illicit drugs, which is in line with other national reports, including DOT drug-testing figures. Further, AMA reports that the vast majority of employers do not hire an applicant who tests positive (95 percent), thus avoiding the associated costs of employing a substance abuser.

The Cost of Hiring Drug Users

There are numerous studies on the effectiveness of drug testing and pre-employment testing in particular. One of the most compelling of these surveys was conducted by the U.S. Postal Service (USPS).

In September 1987, the Postal Service initiated a major pre-employment drug testing study sponsored by the federal government. The purpose of the study was to determine the relationship, if any, between drug use and job performance. USPS tested 5,465 applicants between September 1987 and May 1988. Of the 4,375 applicants who were hired, 395 tested positive (63 percent for marijuana, 24 percent for cocaine and 11 percent for all other drugs combined). No one in the Postal Service was aware of the test results except those conducting the study.

After 1.3, 2.4 and 3.3 years, the Postal Service noted remarkable differences between the "test-positive" group and those who tested negative:

  • Involuntary turnover. At the 1.3-year mark, 15 percent of the test-positive group had been terminated. That represented a 47 percent higher rate than the test-negative group. At 2.4 years, the rate was 69.4 percent higher. At 3.3 years, the rate was 77.4 percent higher.
  • Absenteeism. After 1.3 years, the test-positive group was 59.4 percent more likely to be heavy users of leave. Those who tested positive for cocaine were four times more likely to be heavy leave users. Those who tested positive for marijuana were 1.5 times more likely to be heavy leave users. After 2.4 years, the positive testers were absent almost 10 percent of the total work hours scheduled. At 3.3 years, they were absent 11 percent of the scheduled work hours.
  • EAP. After three years of employment, 14 percent of the test-positive group had been referred to the company's employee assistance program (EAP), compared to 7 percent of the test-negative group. If the EAP identified an alcohol problem, the referral rate was 3.5 times higher. If a problem with illicit drugs was identified, the referral rate jumped to 5.7 times higher. Interestingly, the referrals rate between the two groups for emotional, marital or stress-related problems was virtually the same.
  • Disciplinary actions. The test-positive group had a tendency to face disciplinary action more often than the test-negative group. At the 3.3-year mark, 37 percent of the test-positive group had been disciplined, compared to 19 percent of the test-negative group.

The findings of the Postal Service study show a direct tie to the cost of doing business. USPS projected it would have saved approximately $52 million by 1989 if it had not hired the known drug users in 1987. By 1991, the estimated savings increased to $105 million.

The Liquid I.Q. Test

A strong vote in favor of pre-employment drug testing is found in a study conducted by the federal government of its annual U.S. Household Survey on Drug Abuse. The survey identified regular drug users as employed or unemployed. The employed drug users were asked a series of questions specific to their employment (e.g., Does your employer drug test? How many employers have you had in the past year?).

When the regular drug users employed full-time were asked if they were more likely or less likely to work for a company that conducted drug testing, the answer was beyond what most experts would have predicted. Thirty percent admitted that they were less likely to work for a company that conducted pre-employment screening.

For years, some employers have joked that a pre-employment drug screen is nothing more than a "liquid I.Q." test - a "whiz quiz" for stupid people. The truth is not that simple. Many people who use drugs have a very serious problem with addiction. Although drug users may know that an employer will conduct a pre-employment drug screen, they can't even abstain from drug use for two or three days to increase their chances of obtaining employment.

Undoubtedly, companies that do not conduct pre-employment testing hire more drug users than those that do. That is among the reasons why there has been such an increase in all types of drug testing among smaller companies. For many years, because these smaller firms did not drug test and the larger companies did, the small employers discovered that they had a disproportionate percentage of drug users among their employees. Consequently, these smaller firms were experiencing more of the problems commonly associated with drug abuse in the workplace.

A 220-employee company, Warner Plumbing of Washington, D.C., came to this conclusion and initiated a drug-testing program that included pre-employment, pre-transfer and post-accident screening. The company estimates that it saved approximately $385,000 in one year just from lowering workers' compensation and insurance premiums. Workers' compensation claims fell from an annual average of 111 to 35.

It may be that pre-employment drug testing is some kind of an intelligence test, but it's not the drug-abusing applicant whose intelligence is being tested, it's the employer's. With the most recent reports indicating noteworthy increases in substance abuse in America since Sept. 11, the need for drug testing, and pre-employment screening in particular, may be at one of its highest levels in more than a decade.

While it is a smart business practice to cut costs, it is also a smart business practice to make your organization's workplace as safe as possible. Drug testing can assist you with both.

About the author: William F. Current is president of WFC & Associates, a national consulting firm specializing in drug-free workplace policy and training issues. He is the author and co-author of seven books on the drug-free workplace, including 17 Reasons to Consider Rapid Result Testing and In Favor of a Drug-Free Workplace: Why Drug Testing? He can be reached at (954) 255-8650.

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