Smoke-free workplace: cost-effective corporate smoking cessation solutions and programmes

The real costs of smokers in the workplace

In reviewing corporate response to smoking cessation a US study noted that companies routinely:

i) Fail to understand the strength of the business case for workplace smoking cessation

ii) Underestimate the number of smokers in their workforce and the level of demand for such programmes

We've designed a detailed Business Case Spreadsheet for Workplace Smoking Cessation. You can download it and drop the numbers in for your workforce to find out what the business cost is per smoker AND the estimated number of smokers in your workforce.

 

What are the costs of smokers in your workforce?

Smokers are estimated to cost UK businesses about £5 billion per year, however is this figure real and what are the costs for an individual business?

Estimates have ranged from £400 to £1800 per smoker per year and higher.

We've looked at these studies from the United States ($4600/yr per smoker), Scotland (£900/yr per smoker) and the recent figures from the National Institute on Clinical Excellence (NICE) - who published their own costing worksheet for employers (which we have analysed extensively).

However we think that all of these studies have missed a critical factor in estimating business costs. We estimate the direct salary costs of each smoker to be on average £1,800 per year and the real business cost to be over £7,000 per smoker per year.

Employer Costs

Employer costs fall across a few simple categories:

Direct Costs
Productivity costs due to extra sick leave due to smoking
Productivity costs due to time taken for smoking breaks
Increased health insurance premiums

Indirect Costs
Impact on customers with smokers representing your company
Impact on other workers with smokers in the workplace
Increased fire risk
Impact on general company image
Loss of key personnel through illness or death

Why estimates fail to capture the REAL costs?

All the estimates to date failed to include not only associated employee costs like office space, IT maintenance and HR support - they also failed to recognise that an employer is expecting an employee to make a contribution to the business much greater than the value of their salary.

The basic metric here is Average Revenue per Employee. This varies considerably from industry to industry and also by location. For 2006 Ernst & Young calculated the Average Revenue per Employee to be £106,800 per annum or roughly 4.7 times an average UK salary.

Calculating the business opportunity lost through wasted hours on smoking paints a far more serious picture, using the NICE spreadsheet the following figures emerge:

Productivity lost due to Hours of working time lost per year % working time lost Direct Salary Cost*** Business Opportunity Lost****
Sick leave

33 hrs*

1.8% £413 £1894
Smoking Breaks 100 hrs**
5.5% £1251 £5880
         
TOTAL   7.3% £1664 £7774

* National Institute of Clinical Excellence (NICE) estimate based on studies to date
** NICE estimate: estimating 5 breaks per day with 5 minutes per break. (Considered more controversial estimate and NICE did not include in simple spreadsheet calculations)
*** Direct Salary Cost calculated at £12.51/hour x 37.5 hours a week x 48 weeks/year
**** Productivity cost based on 38 hrs/wk and 48 wks/year - and a UK Average Revenue Per Employee of £106,800/year

On average a smoker on your workforce is costing over £7,000 in lost business opportunity

Why use Average Revenue Per Employee - some staff don't contribute that much?
That's true - but other staff do. If you are losing 7.3% productivity on your senior sales executives it will hit revenues hard. Many industries or companies in London will have much higher revenue rations per employee (e.g. Google has revenue of $1.5 million per employee)

Aren't these figures overestimating?
Not at all. Indeed these figures represent the more conservative estimates. A recent study in Sweden found that the additional days sick due to smoking was actually double the NICE estimate at 8 days per year lost - and another study showed that smokers take 30 minutes a day in breaks - while a further US study showed smokers taking 40 minutes a day in breaks.

 

Solutions for Employers

Using Stop Smoking Solutions corporate smoking cessation programmes we can minimise your outlay and, even using the most conservative numbers, can give you a "risk-free" return on investment of at least 600%.
We have individual solutions for your senior executives (where the impact on your business is greater), risk-free group programmes - and several other options to match your corporate policies and funding options.

 

References:

US Surgeon General's speech - giving cost estimates of $4600 per employee

Scottish study on costs of employees in workforce

Research paper by 2Europe on costs of smoking in the workplace and benefits to employers

NICE costing spreadsheet:
National Institute Of Clinical Excellence's detailed costing spreadsheet

NICE guidance for workplace smoke-free policies :

NICE press release coverage
Guardian: Firms urged to help smokers quit

British Chamber of Commerce Response to NICE recommendations
Guardian coverage of business leaders blasting the NICE recommendations

BBC news: smokers take over 30 minutes in smoking breaks per day: Benenden Healthcare Society estimates that smokers take 3.2 breaks per day for 9.5 minutes each break – just over 30 minutes a day.

Summary of management attitudes to smokers – 73% would hire non-smoker over a smoker - but only 44% thought they had a duty to help

Average revenue per employee as a productivity KPI

Call now on 0800 8600 698

Or email at info@stopsmokingsolutions.co.uk


 

mark davis hypnotherapist
"Simply using direct salary costs to estimate the business impact of smokers in your workforce flies in the face of good business practice."

 

Use our FREE Business Case
Analysis Spreadsheet and
get the real numbers behind what smokers are costing
your company!

Download now
Excel document
128 KB

 

"Whether you look at
direct salary costs,
legislative risks,
or the real business impact:
the business case for workplace smoking cessation is strong and represents a missed opportunity for most employers.
"

 

 

 

"Cigarette smoking is clearly identified as the chief, preventable cause of death in our society."
- C. Everett Koop, former US Surgeon General

 
 
     
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