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The High Cost of Doing Nothing
By Fred D. Hafer

Substance abuse and addiction are problems that are not only close to home but close to the workplace. The abuse of alcohol and other drugs has a huge negative impact on our nation's businesses, large and small.

Just over a decade ago, I assumed the presidency of Metropolitan Edison, a Pennsylvania regional electric utility and one of GPU's subsidiaries. Shortly thereafter, I became a trustee for an addiction rehabilitation facility, the Caron Foundation. These experiences, coupled with much reading on the subject of substance abuse and addiction, gave me a new awareness of the problem and its effects in the workplace.

Fred Hafer

Fred Hafer

 Among the things I learned was that the sheer financial cost to American businesses is staggering. There are many good humanitarian reasons for addressing the problem. There are also compelling business reasons. The National Institute on Drug Abuse and the National Institute on Alcohol Abuse and Alcoholism estimate that a full 10 percent of the American work force has a chemical dependency problem. A study by the U.S. Chamber of Commerce concluded that these workers function at about two-thirds of what is considered normal productivity. Stated another way, in those cases, one third of the productivity that companies are paying for and are entitled to is lost!

If you're still not convinced that substance abuse and dependence are costing you and your company money, consider that studies have shown that substance-abusing workers, compared to their nonabusing colleagues:

are five times more likely to file a workers' compensation claim;
have unexcused absences from work twice as often;
are late for work three times as often;
request early dismissal twice as often; and
are more likely to steal company property and be involved in workplace accidents.

When I applied the statistics to Metropolitan Edison and later to GPU, even conservatively, I was stunned. They told me that the direct results of substance abuse and dependence could be costing GPU and its subsidiaries more than $10 million a year. Do the math for your own company.

Employment Status of Illicit Drug Users

When you consider that the people close to employees with substance abuse problems, whether family members or co-workers or friends, are frequently adversely affected as well, you can begin to understand, as I did, what a huge impact this phenomenon has on our economy and our society. The cost to human lives and personal dignity as well as business is enormous.

But the news is not all bad. Once we have acknowledged the problem, we can fight it. Businesses can implement policies to both help prevent substance abuse by employees in the first instance and to help those who already have a problem.

Throughout GPU, we have a strong drug and alcohol policy that includes an absolute ban on the use or possession of drugs or alcohol on company property or on any company business. We also provide an Employee Assistance Program (EAP) to give those in need of help a confidential, free avenue to receive it.

Even an employee with an active addiction to a substance, who has lost some or all control over his or her use, can be treated and can recover, returning to full productivity and a good life. Addiction is a disease--it has been recognized as one by the American Medical Association for the past 40 years--and it is treatable.

More good news: Treatment of substance abuse is very cost-effective for businesses, especially as an alternative to discharging the employee. Estimates of the money saved range from $2.00 to $10.00 for every $1.00 spent on treatment. It is obvious to me that it is far more expensive to ignore the problem of substance abuse and addiction than it is to address it.

What's more, the improved quality of life enjoyed by the recovering chemically dependent person produces not only a more productive employee, but a more loyal one as well.

It's tempting for a business manager to conclude that dealing with substance abuse or the problems of an addicted employee is too complex and time-consuming to take on. But substance abuse manifests itself in the workplace as performance problems, and can and should be approached as such. After all, we're hired to manage performance; dealing with the issue is therefore part of our responsibility. Supervisors don't need to -- indeed, cannot be expected to -- "diagnose" substance abuse problems. If they address the workplace performance problems that substance abuse causes, and if companies provide employees with prevention and education programs, clear policies, EAPs, and health benefits that pay for substance abuse treatment, the negative effects can be eliminated.

As concerned citizens, we all have an obligation to contribute to the betterment of society. As business people, we must face the stark reality that the cost of ignoring the problems of substance abuse and addiction is intolerable. It is a very poor business decision and a dereliction of corporate duties.

Doing something about substance abuse and addiction in the workplace will admittedly require effort, understanding, and probably some initial investment of money--although the latter will almost certainly be recouped severalfold. But the victory is well worth both the effort and the initial costs we may have to pay, because what none of us can afford is the cost of doing nothing.


Fred D. Hafer is the Chairman, President, and CEO of General Public Utilities Corporation.

This article is an excerpt from "Substance Abuse Prevention in the Workplace: An Employer's Guide," produced by Thirteen/WNET's Educational Publishing Department to accompany MOYERS ON ADDICTION: CLOSE TO HOME. The entire guide is available, free of charge, by downloading it to your computer or requesting a copy by mail.

Photo: Courtesy of GPU, Inc.
Chart Source: NIDA, National Household Survey on Drug Abuse, 1991.

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