In today’s Academic Minute, Dr. Micah Berman of Ohio State University calculates the cost an employer can expect to incur when hiring a smoker.
Micah Berman is an assistant professor in Ohio State University's College of Public Health and the Moritz College of Law. Prior to joining the Ohio State University faculty, Berman was an associate professor of law at New England Law School in Boston where he served as director of the Center for Public Health and Tobacco Policy. He earned his law degree at Stanford Law School.
Dr. Micah Berman – The Cost of Hiring a Smoker
By reviewing and synthesizing previous studies, my co-authors and Isought to estimate the excess annual costs that a private sector US employer could attribute to employing an individual who smokes tobacco, as compared to a non-smoking employee.
We constructed a cost-estimation approach that consolidated discrete costs associated with tobacco smoking. While all of these discrete costs had been studied extensively in the past, in most cases they had never been converted into a projected annual cost for employers.
We analyzed five factors: absenteeism, presenteeism, lost productivity due to smoking breaks, healthcare costs, and pension benefits. “Presenteeism” refers to lower on-the-job productivity due to a lack of attention – in this case, caused by short-term cycles of nicotine withdrawal. For each factor, we projected an annual cost using the best available data from previous studies.
Overall, we estimated that each year, an employee who smokes costs an employer an average of $5,816 more than an employee who has never smoked. We caution that this is a rough indicator of excess costs and that costs may vary significantly depending upon the industry, the specific employees, and numerous other factors.
In our estimate, lost productivity due to smoking breaks accounted for just over half the projected cost. Healthcare costs were the next largest component, totaling more than a third of the projected costs.
Our study did not include all possible smoking-related costs and may therefore be an underestimate. Nonetheless, our study highlights that the costs relating to smoking are substantial – not just for those who use tobacco, but for their employers as well.