'Hidden cost' of alcohol to New Zealand workplaces more than $1.65 billion, study finds

Source: 1News

Kiwis' bad drinking habits are having both an affect on productivity at work and costing the nation more than a billion dollars with employees turning up to work hungover, or not turning up at all.

A University of Otago study found the "hidden cost" of alcohol to New Zealand workplaces is more than $1.65 billion per year.

Lead author Dr Trudy Sullivan, of the Department of Preventive and Social Medicine, says the nation’s longstanding issues with alcohol have been well-documented but little attention has been paid to its impact on workplace productivity.

Researchers surveyed 800 employees and 227 employers from a range of industries, looking at the cost of lost productivity through days off work and lost hours of productive time while at work, as well as hours spent by employers dealing with alcohol-related issues.

The results, just published in Drug and Alcohol Review , revealed the estimated annual average cost of lost productivity per employee is $1100 - equal to about five full working days per year. Costs were based on an average hourly rate of $29.50 for the employees.

There is also an additional cost of $135 per employer for dealing with the consequences of an employee’s drinking behaviour, including time spent on health, disciplinary and legal matters.

The significant predictors of reduced workplace performance due to alcohol consumption were being younger than 25 years, male, having a stressful job, and drinking more than the recommended guidelines.

Dr Sullivan says the costs associated with lost hours of productive time while at work are more than four times greater than those associated with lost productivity through days off work as alcohol-affected employees turning up to work are much less effective at carrying out their duties.

"It is also a hidden cost to employers as the impact is harder to see," she says. "You notice if people don’t turn up to work, but it's much harder to spot when people aren’t working to their full ability because they are hungover."

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While more difficult to capture, it encompasses many factors including reduced output and quality of work, job errors, injury, the negative effect on co-workers, inefficient use of resources, and damaged property.

Alcohol Healthwatch's Nicki Jackson joined TVNZ1's Breakfast this morning to discuss its impact on workers, which she said includes not only lost earnings from failing to turn up to work but also "having to use all their sick leave and then having to come to work when they've got the flu or things like that".

She added that co-workers are also being impacted by "picking up that slack and having to work extra hours or extra stress because of our wider drinking culture".

Co-author Dr Fiona Edgar, of the Department of Management, believes a multifaceted approach needs to be taken to reduce the costs of lost productivity.

"It’s not about targeting individuals," she says. "Research in this area suggests change needs to occur both at the workplace and societal levels.

"People spend so much of their time at work that makes it a good place to introduce programmes aimed, for example, at promoting a healthy lifestyle.

"We see initiatives which are aimed at tackling some of the main drivers, such as stress as a good starting point."