Smoker hiring costs US firms $ 6000 per head

Jun 04 2013, 17:25 IST
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Smoker hiring costs US firms $ 6000 per head Smoker hiring costs US firms $ 6000 per head
SummaryThe study takes a look at the financial burden for companies that employ smokers.

Hiring employees who smoke is proving costly for US firms as they have to shell out $ 6000 more per year on a smoker than a non-smoker, according to a new study.

Researchers say the study is the first to take a comprehensive look at the financial burden for companies that employ smokers.

By drawing on previous research on the costs of absenteeism, lost productivity, smoke breaks and health care costs, the researchers developed an estimate that each employee who smokes costs an employer an average of $5,816 annually above the cost of a person who never smoked.

These annual costs can range from $ 2,885 to $ 10,125, according to the research.

Smoke breaks accounted for the highest cost in lost productivity, followed by health-care expenses that exceed

insurance costs for nonsmokers.

The analysis used studies that measured costs for private-sector employers, but the findings would likely apply in the public sector as well, said lead author Micah Berman.

"This research should help businesses make better informed decisions about their tobacco policies," said Berman.

The study focuses solely on economics and does not address ethical and privacy issues related to the adoption of workplace policies covering employee smoking.

Researchers acknowledge that providing smoking-cessation programs would be an added cost for employers.

The researchers used multiple studies that calculated a variety of specific costs to develop an estimate of the overall annual extra cost of each employee who smokes.

According to their annual estimates per smoker, excess absenteeism costs an average of $ 517 per year, "presenteeism," or reduced productivity related to the effects of nicotine addiction, $ 462, smoke breaks, $ 3,077 and extra health care costs (for self-insured employers), $2,056.

The analysis also took into consideration a so-called death "benefit" in terms of economics. For employers who provide defined benefit plans, meaning they pay retirees a set amount in pension each year, a smoker's early death could result in an annual cost reduction of an estimated $ 296.

This occurs when smokers pay more into the pension system than they receive in retirement - in effect, subsidising nonsmokers' pensions because they live longer.

The research is published in the journal Tobacco Control.

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