Employers turning their backs on drug testing

By Diane Cadrain April 17, 2006

In the drive to get working bodies into jobs, employers in some parts of the country and in some industries are turning their backs on drug testing. Is this a trend that will expand across the country and across industries, as the economy heats up and the competition for workers intensifies? And why is it happening?

Some HR professionals and testing experts claim that drug testing is dropping off in part because it shows no demonstrable return on investment, at least in some industries. But others say that because the tight job market forces employers to be pickier about new hires, companies that forego drug tests are asking for trouble.

Doing away with testing “does seem to be a trend,” said Mike Perkins, vice president and general counsel at Amstaff Human Resources in Pensacola, Fla.

“My company is a PEO [professional employer organization], and, when we’re trying to find clients, more and more companies are uninterested in drug testing. On the Gulf Coast of Florida, with the hurricane reconstruction, there’s a huge demand for workers. Also in the hospitality industry,” said Perkins. “We’ve perceived it for some time. As the demand increases, drug testing is viewed as an impediment to finding employees.

“We’re fighting those trends,” he continued. “We’re strong believers in drug-free workplaces. But we’re seeing more and more employers struggling to find workers and lowering their standards.”

The American Management Association (AMA) has verified Perkins’ observations. An AMA study found that drug testing in the workplace peaked in 1996, when 81 percent of employers screened workers and applicants, and then declined steadily to 62 percent in 2004.

‘Not an ideal situation’

Kevin Troutman, an attorney in the New Orleans office of Fisher and Phillips, agrees. “We have a good number of clients around the Gulf Coast area,” said Troutman. “Employers are foregoing drug testing and streamlining the hiring process. Background checks are abbreviated or done after the fact instead of before. It’s not an ideal situation.”

“Geographically, it’s not necessarily limited to the Gulf Coast, because there are labor shortages in a number of industries,” he noted. “It’s become much worse in unskilled areas—maintenance, laundry, housekeeping, food service—any kind of labor-intensive jobs. Most employers are almost desperate for workers.”

In the hospitality industry, for example, according to Troutman and Perkins, a relaxed attitude toward drug testing is now becoming even more lenient in the Gulf Coast region. “In some parts of the hospitality industry, drug testing wasn’t prevalent even before the storm,” Troutman said.

“In the restaurant industry, there’s always been a quiet acceptance that a lot of employees smoke marijuana,” said Perkins. “There’s been a lot of pressure to relax testing there.”

“Over time, if this situation doesn’t begin to moderate, there will be problems—poor performance, workplace violence, thefts,” Troutman concluded.

But the apparent leniency isn’t limited to the construction and hospitality industries, said Mark McNulty, president of Indianapolis consulting firm HR Dimensions. “In manufacturing, employers may need a less-skilled workforce and they’re more comfortable with turnover, so they feel they can pay lower wages. They don’t want to spend the money [on testing], and the job market is tight. They want to get the people in more quickly.”

It’s even happening in police work. According to a recent report in the Washington Post, some police departments across the country are facing a shortage of officers and have quietly dropped their zero-tolerance policy on drug use. “We no longer say: If you've smoked marijuana five times, you can't be in the LAPD,” Cmdr. Kenneth Garner, who runs the recruitment operation for the Los Angeles Police Department (LAPD), told the Post. “If we did that, I'd be sitting in this office by myself. But we really take a hard look at honesty.”

Will drug testing continue to occupy a back burner, across the country and across occupations, as long as the economy heats up and employers scramble for bodies? There’s no doubt that the economy is starting to surge. Recent survey statistics from the Society for Human Resource Management showed that overall U.S. employment growth continued to expand in March for the manufacturing and service sectors, that short-term hiring expectations remained strong, and that manufacturing growth was stronger than the same time in 2005.

Workplace futurist Joyce Gioia said that the industries in which the labor market is tightest include construction, health care, retail, hospitality, transportation, engineering and heating/air conditioning.

The immigration debate in Congress is underscoring the fact that employers can’t get enough people to fill job vacancies. To some, that situation forces employers to be less picky with new hires.

‘You can’t fool people forever’

“It’s a fact that employers are doing less drug testing,” said Lew Maltby of the National Workrights Institute, an organization dedicated to human rights in the workplace. “And some employers who used to test don’t do so as often. Why? You can’t fool people forever. Drug testing was always sold on the promise of increased safety and productivity—but it’s not demonstrable that it does that.”

Maltby cited a study he conducted in 1999 on behalf of the American Civil Liberties Union (ACLU), Drug Testing: A Bad Investment, which claims that few employers have evaluated the effectiveness of their drug testing programs. When employers were asked whether they had statistical evidence verifying that drug testing actually produced declines in absenteeism, disability claims, accident rates and incidents of theft and violence, the percentage answering “yes” remained in the single digits. In fact, only 8 percent of employers with drug testing programs had performed any cost-benefit analysis.

In addition, according to the study, in 1990 the federal government spent $11.7 million to test nearly 29,000 workers but only 153 employees flunked, putting the cost at $77,000 per drug user found.

“Testing is incredibly costly,” agreed Paula Brantner, program director with Workplace Fairness, a nonprofit organization with a mission to educate and mobilize workers. “Testing thousands to weed out one or two may not be the best use of employers’ money. A few years ago, employers thought it was the thing to do, and companies jumped on the bandwagon, especially if their competitors were doing it. But trends are trends. Now, I think security is a bigger concern, and companies are spending more money on background checks.”

The effect of the tight job market on workplace substance abuse is that employers are more likely to spend money on rehabilitation, Brantner said. “If you have someone you want to keep around, it may be more cost-effective to invest in an employee assistance program. And it may be a more compassionate use of your funds.”

Perkins agrees that even companies that have drug testing programs are more likely to invest in employee assistance to keep employees at work once they test positive. “The toughness of the job market is the reason,” Perkins observed.

And employers who are establishing testing programs aren’t doing it proactively, according to McNulty. “Now it’s only undertaken in response to a problem,” McNulty observed. “For example, there was a big distribution/warehouse facility in the Indianapolis area that never did drug screening, and one or two problem folks got in. Then their friends got in, and there developed a circle of folks with the same habits. Once it was uncovered, it turned out that there were dozens of them. Friends tell friends. People learn who does and who doesn’t screen. That company started a drug testing program.”

Some exercise greater caution

In the face of claims that drug testing is declining and doesn’t yield a good return on investment, some employers say that the current shortage of workers should drive companies to be more careful about whom they hire. For example, the trucking industry, in which testing is mandated for many drivers, faces a shortage of 111,000 drivers by 2014, according to the American Trucking Association. But to Chuck Gillespie, who is the director of human resources for Wheaton Van Lines in Indianapolis, that shortage compels a proactive approach to hiring.

“It’s true that truck drivers are in short supply,” said Gillespie. “But the shortage means we have to be very diligent and proactive and make our pay competitive. In fact, in the moving industry, we’re seeing more drug testing, because of the liability associated with being in customers’ homes. The last thing we want is someone on illegal drugs moving a piano.”

“My numbers don’t show a decline [in drug screening], said Joe Reilly, chairman of the board of the Drug and Alcohol Testing Industry Association (DATIA) and president of Florida Drug Screening, a testing firm. “My company is booming, and that’s what my peers in DATIA are saying, too. Business is up 38 percent. Since 2002, the emerging market is small and medium companies, whereas years ago it was only the big companies.”

Meanwhile, there’s no question that there are a lot of substance abusers in the workplace. The 2004 National Survey on Drug Use and Health, conducted by the Substance Abuse and Mental Health Services Administration (SAMHSA), part of the U.S. Department of Health and Human Services, found that in 2004 10.5 percent of full-time employed adults and 11.9 percent of part-time employed adults were classified with dependence or abuse. Most adults with substance dependence or abuse were employed either full or part time. Of the 20.3 million adults classified with dependence or abuse, 15.7 million (77.6 percent) were employed.

There’s also no question that workplace substance abuse costs employers money. The American Council on Drug Education (ACDE) says that, compared to their coworkers, substance abusers are:

    • Ten times more likely to miss work.

    • 3.6 times more likely to be involved in on-the-job accidents (and five times more likely to injure themselves or another in the process).

    • Five times more likely to file a workers’ compensation claim.

    • 33 percent less productive.

    • Responsible for health care costs that are three times as high.

Working at minimal capacity, the ACDE says, these workers reduce productivity, increase the workloads of others, compromise product quality and can tarnish a company’s image. Their absences and health care demands raise costs. They reduce competitiveness and profitability, weakening the companies that employ them and threatening everyone’s job security.

The price tag of drug use in the workplace, according to the U.S. Department of Labor: $75 billion to $100 billion annually in lost time, accidents, health care and workers compensation costs. Sixty-five percent of all accidents on the job are related to drugs or alcohol, and substance abusers use 16 times as many health care benefits and are six times more likely to file workers’ compensation claims then non-abusers.

“Employers who are halting their drug testing programs are shooting themselves in the foot,” Gioia concluded.

Diane Cadrain is an attorney who has been covering workplace-related legal issues for a variety of publications for over 20 years. She is a member of the Human Resource Association of Central Connecticut.

Related articles:

Debating Drug Test ROI, Staffing Management, Fall 2005.

Helping workers cheat on drug tests is a big business, HR News, June 22, 2005.

Dozens failing drug tests fired, but RV plant keeps rolling, HR News, April 28, 2005.

DOL issues guidance on sick leave, drug testing under FMLA, HR News, Feb. 24, 2005.

For the latest HR-related business and government news, go daily to www.shrm.org/hrnews


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