Impact of alcohol on workplaces

Impact of alcohol and drug use on the workplace

The following is a table summarising the economic impact of workplace alcohol and other drug misuse.

Alcohol and other drug misuse causes:

Translate into employer costs in terms of:


  • Days off
  • Lateness in the morning or after lunch
  • Long lunch hours
  • Sleeping on the job
  • Unauthorised leave
  • Patterns of absence, e.g. after weekends

Lost time

Lost productivity

Lower profits

Impaired workplace performance

  • Deterioration in quantity and quality of work
  • Impaired judgment and decision-making
  • Reduced reaction times and efficiency
  • Poor image presented to customers and in business relationships
  • Missed appointments or deadlines
  • Increased error rates
  • Poor concentration
  • Unreliability
  • Inability to remember instructions

Lower productivity, reduced product and

service quality, lower profits

Potentially reduced company reputation

Potentially reduced competitive strength

Negative impact on customers’ image of

the organisation

Health issues

Employer’s share of medical insurance

Use of sickness/medical benefits

Workplace injuries and incidents

ACC costs

Legal costs

Increased insurance costs

Inappropriate behaviour

  • E.g. leading to disciplinary procedures         

Management time

Costs of disciplinary process

Negative impact on company morale

Job losses, turnover and recruitment costs

Management time

Recruitment and training of replacements

Loss of company knowledge

Difficulties with justification for dismissal

and risk of costs if the dismissal is


Increased risk of theft and other crime

  • E.g. , fraud to support a drug habit

Property destruction (eg, vandalism)

Organisation-paid security and crime


Lower profits and quality

Violence-related costs

Negative effects on co-worker relations

and company morale

  • Increased workload or stress levels for other workers
  • Increased possibility of trouble between co-workers or workers and supervisors

Impact on morale and subsequent

negative impact on performance,

productivity and quality

Deterioration in public perception of the


Excerpt from ALAC, NZ Drug Foundation, ACC, The Department of Labour. Alcohol and Other Drugs in the Workplace - Employer Guide; 2008