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How Alcohol Misuse is Draining Your Business Financially

March 25, 2024
By Pivot
Why It’s Time to Address Alcohol Misuse Among Employees

Alcohol misuse has become a major issue affecting today’s workforce. With more than 6 in 10 Americans reporting that they drink alcohol and 19% admitting that they overindulge at times, it’s clear that alcohol remains a prevalent issue.

Moreso, when looking at the workforce specifically, an estimated 15% of employees spanning industries engage in heavy drinking (defined as five or more drinks on the same occasion on five or more days in the past 30 days). With millions of employees directly impacted by alcohol misuse, alcohol has far-reaching implications for both individual health and workplace productivity and safety.

Companies can no longer afford to ignore the prevalence of alcohol use that directly and indirectly impacts their workforce. Proactive efforts, starting with education on the problem, are needed to combat the trend. Learn more below.

Hidden Costs of Alcohol Misuse

While alcohol misuse impacts employee health and well-being, it also has an exponential hidden cost for businesses when it comes to increased expenses and lost productivity. Drinking doesn’t just affect those who are raising their glass or partaking in excessive drinking - it also takes a significant toll on a business’s bottom line.

Essential hidden costs of alcohol misuse that businesses experience include:

  • Increased healthcare expenses. Alcohol misuse leads to more doctor visits, hospitalizations, prescription drugs, and emergency room trips. All of these directly translate to increased health insurance premiums. Alcohol misuse can also lead to illnesses that are disabling, creating more disability claims.
  • Lower productivity. There is a direct correlation between alcohol and its impact to reduce sleep quality and the immune system. Employees who suffer from hangovers, alcohol-related illnesses, or personal issues are more likely to be absent or distracted at work. This can lead to a significant decline in productivity.
  • Higher turnover rates. Those who abuse alcohol are more likely to quit or be fired from their jobs. Replacing employees is expensive, running into the tens of thousands of dollars, from lost expertise to recruitment and training.
  • Increased workplace accidents and injuries. Employees who are intoxicated make more mistakes and are more prone to injury while on the job. This can create an immense financial impact, including worker’s compensation claims, lawsuits, and the cost of damage or repairs.
  • Poor morale and increased absenteeism. Alcohol-related health issues and personal problems agitate morale and disengagement and increase the number of sick days used. As a result, the work environment and general employee attitude are negatively impacted.

Alcohol Affects Employers in Multiple Ways

Alcohol Misuse and Chronic Health

Alcohol contributes to more deaths, injuries, and illnesses than any other drug. Alcohol misuse has been shown to increase both the risk and severity of various chronic conditions. Even at low to moderate levels, alcohol misuse is impacting your business.

  • Immune System: Alcohol misuse weakens the immune system by lowering the body’s ability to fight off infections, slows down recoveries from injury, causes inflammation and causes alcohol related damage to organs.
  • Mental Health: Individuals regularly use alcohol as a means to cope with life issues and stress. Research shows that when people drink to cope it can lead to a habit and in some instances dependency, or AUD.
  • Diabetes Management: Alcohol use makes it harder for an individual with diabetes to manage their blood sugar levels, even at moderate levels. This also contributes to cardiovascular disease progression within this population.
  • Chronic Pain: 20% of the US population is impacted by chronic pain, including musculoskeletal issues. Alcohol is commonly seen as a means to self-medicate, which unfortunately slows down recovery and in some situations worsen the outcome.
  • Cancer: Alcohol consumption has been linked to various cancers. At less than 1 drink a day, research is showing that breast cancer risk increases by 10%. Some other common types of cancer linked to alcohol consumption include mouth, throat, liver, and colon cancers. When alcohol is metabolized in the body, it produces carcinogens. Additionally, alcohol can interfere with cell growth and hormone levels, potentially contributing to the growth of cancer cells.

As alcohol consumption increases, so do the risks and complications associated with chronic conditions:

The more heavily someone drinks, the higher their risk of developing these and other alcohol-related health issues. Reducing alcohol intake can prevent and ultimately slow the progression of chronic conditions.

Alcohol Misuse on Healthcare Costs

Alcohol misuse drives up healthcare costs for employers and employees in several ways:

  • Increased insurance premiums. Excessive drinking can lead to chronic health issues, like liver disease, heart disease, and a variety of cancers. Treating alcohol-related conditions raises costs for health insurance companies. These costs are then passed on to employers in the form of higher premiums.
  • Greater utilization of medical services. Those struggling with managing their alcohol consumption may be more prone to expensive emergency room visits, hospitalizations, doctor appointments, lab tests, and prescription medications - 5x increase. The frequent utilization of the healthcare system has a tendency to get expensive, and fast.
  • Higher disability claims. Alcohol can prevent employees from being able to work as a result of chronic conditions brought on by alcohol use. The cost of disability claims and lost productivity significantly affects workplace profitability and productivity.

Alcohol’s Impact on the Workplace

Absenteeism and Presenteeism

Alcohol misuse can lead to increased absenteeism and presenteeism. Employees who struggle with alcohol are more likely to call in sick or show up late and leave early. And presenteeism can be even more costly than absenteeism. Employees who show up to work hungover or distracted are not able to be as productive. Their attention, concentration, and motor skills suffer, leading to more mistakes and safety issues.

Workplace Accidents and Safety Concerns

Alcohol misuse can lead to catastrophic consequences in the workplace by compromising employee judgment and reaction times. Employees who drink are more likely to make poor decisions, take unnecessary risks, and react slower to hazards and warnings.

Potential dangers include:

  • Operating heavy machinery or vehicles while impaired
  • Failing to follow safety protocols
  • Impaired awareness and judgment
  • Slower response to emergencies
  • Increased violence and aggression

Any workplace accidents influenced by alcohol misuse often lead to lost productivity, disruption in business, increased insurance costs, fines for safety violations, and legal liability. A proactive alcohol misuse solution can help employees while minimizing organization-specific risk exposure.

The Domino Effect Beyond Healthcare Costs

Employee Turnover and Replacement Costs

Alcohol misuse leads to significant employee turnover costs for businesses. Employees who struggle with alcohol issues often experience lower job satisfaction and engagement. They may miss work frequently due to illnesses or hangovers, strain their relationships with coworkers and managers, and feel unable to perform their best on the job.

The cumulative impact of these issues over time can cause employees to disengage and dislike their jobs. Employees struggling to manage their relationship with alcohol oftentimes have a higher resignation rate. When an employee leaves, it creates a void and a substantial cost. Some estimates show that replacing an employee can cost 50–60% of their annual salary.

A revolving door of employees who are either let go or quit creates a cyclical environment full of constant rehiring and retraining. Simply put, a healthy and engaged workforce has much higher retention rates, which saves employers significantly annually.

Minimize the Negative Impacts of Alcohol

Creating a healthier workforce is a win-win scenario for employees and employers alike. When employees are mentally and physically well, it creates higher morale and engagement in the workplace. Employees who feel good about their work are more invested in their jobs and are likely to go above and beyond.

But it requires some level of early intervention. Addressing alcohol misuse issues earlier than not minimizes the negative impact on employees and employers. The longer that unhealthy drinking behaviors continue unchecked, the more likely they are to escalate and lead to health issues, accidents, absenteeism, and turnover.

When given the correct resources no matter where an employee is on the alcohol misuse spectrum, they gain the tools needed to change their drinking behaviors successfully. A little proactivity goes a long way when working to cultivate and maintain a healthy, happy, and cost-efficient workforce.


What are the hidden costs of employee alcohol misuse in the workplace?
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Beyond absenteeism and presenteeism, alcohol misuse can lead to accidents, decreased levels of productivity, and increased healthcare expenses.

How can alcohol misuse affect employee safety and the safety of others?
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Impaired judgment and reaction times can increase the likelihood of workplace accidents and injuries. These, in turn, can impact an employer's safety record, public profile, and financial standing.

Are there resources available to help with employee alcohol misuse?
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Absolutely! Solutions like Pivot Clear are here to help, focused on ensuring that everyone who would like to can develop a better and sustainable relationship with alcohol.

Can an Employee Assistance Program (EAP) help with employee alcohol misuse?
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Traditional EAP solutions usually target one end of the alcohol consumption spectrum, often aimed at those needing clinical assistance, but they may not cater to those seeking to improve their relationship with alcohol. This calls for a more comprehensive solution.

How can I create a workplace culture that discourages alcohol misuse?
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Establish clear alcohol use policies, offer employees effective behavioral change solutions for lasting results, and encourage healthier stress relief options for employees.

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