Friday, July 14, 2017

What's the Cost of Alcoholism in the Typical Workplace? Formula for Determining Cost of Alcoholism on Business and Industry

A workforce with 300 employees will be comprised of about 18 alcoholic employees.  These employees average approximately 75% their efficiency level. These could be anywhere on the continuum from zero impact on productivity to maximum impact on productivity.

This means there is a 25% loss of productivity for alcoholic drinkers.  This includes higher costs associated with accidents, insurance,
property damage, theft, sick leave, fringe benefits use and abuse, and a bunch of other difficult to measure impacts.

Peer pressure or experimentation are virtually the only reasons for anyone’s first drink.

The following formula was popularized in the early 1970’s by NIAAA (Average Salary of Workforce X 25%) X  (Number of Employees X 6%) = Economic Loss

Example: 1. $33,000 X 25% = $8250 

2. 300 X 7% of workforce = 21

3. 21 X $8250 = $173,250

Total Cost of Addiction to Company = $173,250 per year.

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