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Smokers Cost Businesses Thousands Each Year

smoking, marketing, cigarettes Credit: Stock Xchng

Employees that smoke cigarettes are costing their companies thousands of dollars each year, new research shows.

U.S. businesses pay an average of almost $6,000 a year extra for each employee who smokes versus those who have never smoked cigarettes, an Ohio State University study discovered.

Researchers reached their conclusions after studying past research on the costs of absenteeism, lost productivity, smoke breaks and health care costs.

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Smoke breaks accounted for the highest cost in lost productivity, followed by health care expenses that exceed insurance costs for nonsmokers. Specifically, excess absenteeism costs an average of $517 per year; reduced productivity related to the effects of nicotine addiction costs $462; smoke breaks, $3,077; and extra health care costs (for self-insured employers), $2,056.

The research also took into account a so-called economic death "benefit." For employers who pay retirees a set amount in pension each year, a smoker’s early death could result in an annual cost reduction of close to $300.

"We tried to be conservative in our estimates, and certainly the costs will vary by industry and by the type of employee," said the study's lead author Micah Berman. "Several of these estimates are based on hourly employees whose productivity can be tracked more easily."

Overall, the study found that annual costs for each smoker can range from $2,885 to $10,125 annually.

"This research should help businesses make better informed decisions about their tobacco policies," Berman said. "We constructed our calculations such that individual employers can plug in their own expenses to get more accurate estimates of their own costs."

The study found that increasingly, businesses are adopting tobacco-related policies that include requiring smokers to pay premium surcharges for their health care benefits or simply refusing to hire employees who smoke.

“Most of the places that have policies against hiring smokers are coming at it not just from a cost perspective but from a wellness perspective,” Berman said. “Many of these businesses make cessation programs available to their employees."

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

"Employers should be understanding about how difficult it is to quit smoking and how much support is needed," Berman said. "It’s definitely not just a cost issue, but employers should be informed about what the costs are when they are considering these policies."

Berman believes many smokers started when they were kids and a vast majority of them want to quit and are struggling to do so.

"This is a place where business interests and public health align," he said. "In addition to cutting costs, employers can help their employees lead healthier and longer lives by eliminating tobacco from the workplace."

The study, co-authored by Ohio State's Rob Crane and Eric Seiber and Mehmet Munur of the law firm Tsibouris & Associates, is published online in the journal Tobacco Control.

Follow Chad Brooks on Twitter @cbrooks76 or BusinessNewsDaily @BNDarticles. We're also on Facebook & Google+.

Chad Brooks

Chad Brooks is a Chicago-based freelance writer who has nearly 15 years experience in the media business. A graduate of Indiana University, he spent nearly a decade as a staff reporter for the Daily Herald in suburban Chicago, covering a wide array of topics including, local and state government, crime, the legal system and education. Following his years at the newspaper Chad worked in public relations, helping promote small businesses throughout the U.S. Follow him on Twitter.

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