Firms pay the price when staff smoke
AN EMPLOYEE who smokes costs his employer nearly US$6,000 (S$7,500) more per year than a non-smoker would, according to a United States study published in the journal Tobacco Control on Monday.
Absence due to ill health, lower productivity because of smoking breaks and additional health-care costs make up the bulk of the additional amount incurred, it said.
"Our best estimate of the annual excess cost to employ a smoker is US$5,816," said researchers led by Mr Micah Berman, of the College of Public Health and Moritz College of Law at Ohio State University.
The figure takes into account that pension costs are nearly US$296 lower for an employee who smokes, because smokers tend to die at a younger age than non-smokers.
Numerous employers in the US have begun charging smokers higher premiums for health insurance, or declaring that they will hire only non-smokers, the paper said.
Some have even threatened to fire employees who do not quit smoking within a given time, it added.
"Without an accurate estimate of smoking-related costs, such policies may seem arbitrary or unreasonable," the paper said.
"A well-reasoned estimate allows companies to more fairly analyse the costs and benefits of such 'tobacco-free workforce' policies."
The investigation was based on previous research into various aspects of smoker versus non-smoker employment.
For instance, it calculated annual absenteeism among smokers to be 2.6 days more per person compared to non-smokers.
If an employee works 71/2 hours a day and the average hourly cost of wages and benefits is US$26.49, this works out to an additional charge per year to the employer of US$516.56.
Non-sanctioned smoking breaks are estimated to cost US$3,077 per year in lost productivity, on the basis of two 15-minute breaks per day and 232 working days per year.
As for medical costs, smoking-related problems account for around 8 per cent of all health-care expenses, the researchers said.
For employers who provide health insurance for their staff, this drives up the bill accordingly. Insuring a smoker costs US$2,055.77 more than that for a non-smoker.
Employers can help by implementing programmes to encourage smokers to quit the habit, the study said.
The cost of such programmes can be amortised in about four years, it added.