Academic journal article Journal of Small Business Management

Substance Abuse in Small Business: Business Owner Perceptions and Reactions

Academic journal article Journal of Small Business Management

Substance Abuse in Small Business: Business Owner Perceptions and Reactions

Article excerpt

Substance abuse, whether drugs or alcohol, continues to plague our society and businesses, and adversely impact economic development. While drug abuse has been receiving more attention in our media and by government, a Bureau of National Affairs study on substance abuse indicates losses attributable to alcohol abuse to be twice that of illegal drug use (Bureau of National Affairs 1988). Recent studies estimate the cost of drug abuse to the business community ranges from $60 billion to $150 billion per year (deBernardo 1988, Wrich 1988). As many as 23 percent of all U.S. workers use dangerous drugs on the job and 70 percent of all drug users are gainfully employed. Costs of substance abuse can be grouped into four categories: (1) manifest direct, (2) latent direct, (3) manifest indirect, and (4) latent indirect (Walsh and Yohay 1987).

Most small businesspersons are aware of manifest direct costs but are unaware of or deny other cost categories. Drug abusing employees incur 300 percent higher medical costs and benefits and are significantly less productive (one-third) when compared to other employees (Walsh and Yohay 1987). Losses in productivity and increased costs to employers stem from increased absences, tardiness, accidents, theft, and compensation claims.

Small business awareness of the dangers of substance abuse to continued organizational success has been slow in coming. Often it is a single incident that helps the employer to see how vulnerable the business is to the plague of substance abuse. Since the mid-1960s, such awakenings have led thousands of companies to develop policies and programs for a drug-free workplace (Bacon 1989). In a recent survey, only 1 percent of the executives responding think the drug problem in their companies is worse than other companies in the same industry. One in twelve (8 percent) think the drug problem in their industry is worse than it is in the business community as a whole. One-third (32 percent) believe it is the same while 44 percent think it is less serious (The Gallup Organization 1988). In a related study, almost 40 percent of responding executives rated drug abuse as a very serious problem in the workplace. Yet almost three-fourths of the firms did not have a specific policy for dealing with an employee with a drug abuse problem (Huneycutt and Wibker 1989).

Based upon firm size, there are differences related to having formal drug policies, drug testing programs, and employee assistance programs. Larger businesses tend to use drug testing and employee assistance programs to a greater extent than smaller firms (LaBar 1989). However, with increased awareness and recent government legislation (1988 Federal Drug Free Workplace Act) requiring a drug-free workplace, a greater number of smaller businesses are developing policies to address the drug threat in the work environment (McKee 1990).

When employees are found to be involved in substance abuse on the job, especially drugs, employer reactions range from termination to support for employee rehabilitation (Stone and Kotch 1989). There is evidence that the approach of immediately dismissing proven drug users is economically beneficial to the firm (Office of Workplace Initiatives 1989). This approach appears consistent with a recent national survey indicating American workers are becoming increasingly intolerant of drug users (Dart 1990). It appears that small business owners continue to use a variety of approaches in addressing substance abuse in their businesses, including avoidance or denial, enforcement, treatment, prevention, education, and termination; and the choice often is influenced by costs (Harte 1990). One factor leading to increased concern over substance abuse is that medical costs for all U.S. employers rose 21.6 percent per employee during 1990, i.e., $2,600 in 1989 to $3,161 in 1990 (Survey Results 1991).

The purpose of this study is to explore the perceptions and prevailing attitudes of small business owners towards substance abuse in the workplace. …

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