'Staggering' cost of alcohol on workplaces put at $1.65b: Otago University study

Employers are losing some $1.65bn a year due to employees' drinking habits impacting on their productivity, a new study has found. Photo / Pixabay

From pulling a sickie because of a raging hangover, to staring bleary-eyed at the computer for hours on a Monday morning - employees' drinking habits are costing New Zealand $1.65 billion a year in lost productivity.

That's the finding from a new University of Otago study - published today in the Drug and Alcohol Review - which put the cost of our drinking at $1098 for every Kiwi employee over a year.

That's almost five days per worker.

Men under 25 and those with stressful jobs were the worst offenders.

The researchers called the cost "staggering" and a health advocate has called for more alcohol regulation in response.

But Business NZ has downplayed the figures, saying most employers would accept an "occasional lapse" from otherwise valued workers.

Some 800 New Zealand employees and 227 employers were asked online about the effects of their drinking for the anonymised survey, which aimed for representation across industry, age, ethnicity and gender.

The final figure includes the costs of days off work, lost productive time at work and time employers wasted dealing with alcohol-related issues such as legal issues and cleaning up damage.

Just 20 per cent of the cost was from those who stay home sick, or absenteeism - "presenteeism" from employees who come to work hung-over or impaired was far more costly. That was a surprise, lead study author Dr Trudy Sullivan said.

"It's those people who turn up under the weather, they're not concentrating - usually it's a hangover - and that costs four times more than those people who aren't getting up at all.

"From an employer's point of view, you can spot someone who regularly doesn't turn up on Monday but they may not be able to identify those who are [hung-over]."

Sullivan, a health economist, said many people would recognise themselves in the survey. Workplaces would send workers home if they turned up obviously drunk, but "these are the ones who are not identifiable - it's a couple hours here and there, where you don't come right until you've had your four coffees".

Lead author Dr Trudy Sullivan says it's much harder for employers to pick up when employees are not on top of their game because they're hung-over. Photo /Supplied

Only 6 per cent of workers admitted taking time off due to their drinking, while 10 per cent admitted to losing productive time at work - usually because they were hung-over.

"But accumulated at a population level, the sheer number of hours and days added up," Sullivan said.

The total included $135 per employer spent dealing with the consequences of employees' drinking behaviour, including time spent on health, disciplinary and legal matters.

Compared with older studies, the cost of lost productivity appeared to be climbing but different methodologies meant it was hard to draw conclusions, Sullivan said. However alcohol was clearly far more available than 20 years ago.

Sullivan's co author Dr Fiona Edgar suggested employers develop workplace policies that promote healthy lifestyle and wellbeing.

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

Dr Nicki Jackson, executive director of lobby group Alcohol Healthwatch, agreed workplaces could help by reducing employees' stress levels, but cautioned there was not strong evidence that education-based approaches worked - and they were costly.

Alcohol Healthwatch lobbies for stronger regulation on alcohol, including cutting alcohol advertising, raising prices and reducing availability. Those moves would be far more effective, she said.

"These hidden costs have come into the open, they've been exposed and they're enormous," she said. "This is about mental health and wellbeing for the drinker and for others. This is exactly what alcohol harm looks like in society."

But Business NZ director Catherine Beard said businesses were probably not too worried about the occasional lapse from a valued employee.

"Productivity across the company is probably what they're really looking at. Particularly if an employee is largely performing really well, the odd day they come in and weren't at their best - its the overall performance of the person an employer looks at. Most business owners are realistic and don't hold employees to [unreasonable] standards."

Catherine Beard heads BusinessNZ's export and manufacturing sector. Photo / File

High-risk sectors like manufacturing would already have rigorous checks and strict penalties for those who were obviously impaired. Low-risk jobs like office work would have less monitoring - but repeat offenders would be picked up over time, Beard said.

"Especially when people are working in teams, they don't like being let down - word gets around. I think if it's someone who's letting down the company on a regular basis, that would be dealt with," she said.

A Worksafe spokesperson said impairment from drugs and alcohol, legal or not, may impact on safety at work and needed to be managed. But workers also had a responsibility to take reasonable care for their own safety and others. "This includes turning up to work in a fit state to work, free from impairment."

The guidelines

The Ministry of Health says harmful alcohol use is estimated to cost New Zealand $7.8b annually, with one in four people potentially drinking hazardously.

The ministry says people can reduce their long-term health risks by drinking no more than:

• 2 standard drinks a day for women and no more than 10 standard drinks a week

• 3 standard drinks a day for men and no more than 15 standard drinks a week

and at least 2 alcohol-free days every week

• 4 standard drinks for women on any single occasion

• 5 standard drinks for men on any single occasion