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A Breakdown Of Drug Testing Costs For Employers

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Employment background checks help reduce the risk of a poor hire, but is pre-employment drug screening worth the cost? To help you make an informed decision about whether to implement drug screening, we explain the costs of drug testing, the costs of not testing, and the consequences of non-compliant drug testing.

Drug testing for job candidates and current employees is crucial for several reasons. Drug screenings help: 

  • Maintain safe work environments
  • Minimize the risk of workplace accidents and injuries
  • Prevent drug use on the job
  • Lower workers’ compensation rates

Currently, it’s estimated that more than 70% of people who use or abuse illicit drugs in the US are employed, according to the National Council on Alcoholism and Drug Dependence (NCADD). The most commonly abused drugs on the job? Marijuana and cocaine. 

When deciding whether to conduct drug testing for candidates and employees, it often comes down to a cost-benefit analysis—is it more costly to drug test employees or to not test them? 

Our take: It’s always best for employers to mitigate risk through employment screening, including criminal background checks and drug screenings through an accredited background check provider like GoodHire. 

Currently, 94% of employers say their organization conducts one or more employment background screening, and that number continues to increase. 

For those who need more data and context to make the decision about whether to implement a drug screening program, GoodHire is breaking down the cost of drug testing for employers.

The Cost Of Drug Testing

Simply put, several factors can affect the average cost of a drug test for candidates and employees, making it difficult to pinpoint exact numbers per test, per month, or per year. These numbers are also dependent on factors like:

  • The types of drug tests ordered
  • The frequency of tests
  • The number of candidates and employees tested, and more

More often than not, though, the cost of drug testing for employers is relatively low, with prices for GoodHire’s 4- and 5-panel drug screens starting at $59.99 per candidate (with discounts for high-volume orders).

Additionally, helpful tools like this Drug Testing Savings Calculator can help you determine savings through a drug-testing program and an estimated ROI. All you have to do is enter brief information about your company and testing program, and the calculator will estimate a return on investment based on the latest industry data.

The Cost Of Not Drug Testing

Drug abuse has been proven to be costly for US companies, which spend upwards of $81 billion on workplace drug abuse due to lost productivity, absenteeism, and healthcare costs. It’s estimated that employees with substance use disorders miss nearly five weeks of work per year (24.6 days), compared to the average employee who misses just three weeks of work (15 days).

Job turnover is also higher among those with substance use disorders; workers are 40% more likely to report having more than one employer in the previous year, causing employers to take on extra costs related to job turnover, hiring, and training. 

Employers spend up to 50% of a worker’s salary to recruit, hire, and train replacement workers, according to the National Safety Council. When it comes to higher-paying jobs like management and executive work, it’s estimated employees with substance abuse can cost an employer more than $14,000. That’s because there’s a higher risk they’ll leave their job within a year.

Employers that offer health insurance also may incur higher costs related to treatment for substance abuse. In 2020, companies covered 83% of premiums for individuals and 73% of family premiums. Finally, employees who abuse substances on the job are more likely to be involved in workplace accidents, resulting in injury

One study by the US Postal Service discovered substance abusers are 55% more likely to be involved in an accident and 85% more likely to sustain an injury on the job. The National Safety Council also reports that 80% of employees injured in drug-related accidents at work are not employees abusing substances, but are injured due to another employee who is under the influence or abusing substances.

More injuries in the workplace can also mean more costly workers’ compensation claims. In 2014, the US Department of Labor revealed that 38% to 50% of all workers’ compensation claims were related to alcohol or drug abuse in the workplace

The Cost Of Non-Compliance & Violations

Under the Fair Credit Reporting Act (FCRA), which is designed to protect candidates and employees, the following steps have to be taken to ensure your company is compliant with employment drug test laws:

  • Candidates and employees have the right to be informed and give signed consent when a background check or drug screening is performed
  • They have the right to review information gathered about them and correct any errors
  • They have the right to know when information about them is used in hiring decisions that impact them

If any of the above steps aren’t taken or followed correctly, job candidates and employees may end up wrongly denied or let go from a job based on inaccurate information.

FCRA violations put companies at-risk of lawsuits that could end up costing a lot of money. While each individual violation of the FCRA is anywhere from $100 to $1,000, that can quickly and easily add up to millions of dollars if fair drug-screening (and criminal background check) practices aren’t followed for large groups of candidates or employees.

Save Money (& Time) With GoodHire Drug Screening

Deciding whether to drug test job candidates and employees comes down to individual companies and their policies, the industry they’re in, and the positions they’re hiring for. The decision may also come down to the cost for drug testing, and implementing and maintaining a company-wide drug-screening process.

Ultimately, drug testing job candidates and employees is worth the cost because of the benefit of helping promote a safer work environment. 

GoodHire offers customizable background check packages that include drug testing, helping you maintain compliance with your company policy as well as applicable state and federal regulations. A compliant pre-employment screening program helps save time and money in the long run while protecting candidates, employees, and your customers—a win-win for everyone. 

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The resources provided here are for educational purposes only and do not constitute legal advice. We advise you to consult your own counsel if you have legal questions related to your specific practices and compliance with applicable laws.

About the Author

Ashley Blonquist is a former news journalist. She writes about GoodHire’s employment screening services and how employers use them to make informed hiring decisions.