14 Surprising Ways Employees Cost Their Companies Billions In The Workplace

sleeping work cubicle stressed office

Photo: By star5112 on Flickr

There are some inevitable costs of running a business. Every workplace is going to have factors driving down productivity. Employees aren’t going to be glued to their work for every minute of their shift, and inefficiencies are bound to occur when people take days off.But just how much do sick days and medical leaves cost U.S. businesses? And what about the lesser known office issues that drive up the cost of running a business, such as workplace bullying litigation and injuries from domestic abuse?

We’ve compiled 14 facts about how much money goes down the drain due to factors in the workplace, taken from a variety of academic and professional studies. The sheer amount of cash wasted is staggering, so take a look:

Lost productivity due to insomnia costs companies $3,156 per employee

Costs are a bit lower for employees with less severe sleep conditions, at $2,500 per employee, according to a study in the Journal of Occupational and Environmental Medicine.

These numbers don't even count the cost of absenteeism. Workers suffering from insomnia miss work five extra days per year.

Source: Harvard Business Review

It costs $3,500 to replace one $8.00/hr worker, when you count the cost of recruiting, interviewing, hiring, training and initial reduced productivity

These results from the Society for Human Resource Management comprise the lowest estimate of more than a dozen different studies on employee turnover and retention.

Other estimates say that it costs 30-50% of annual salary to replace an entry-level employee, 150% for middle-level ones, and 400% for high-level.

Source: WebProNews

Stress costs companies somewhere between $200 and $300 billion each year

This estimate includes the cost of related health care and workers' compensation claims, absenteeism, turnover, productivity loss and more.

Employees under high levels of stress cost 40% more than the average worker. Stress may also contribute to increased instances of unethical behaviour, like lying to customers or taking shortcuts on work tasks.

Source: Encyclopedia of Business, 2nd ed.

Workplace bullies can cost companies over $16 million in turnover and $8 billion in lost productivity

Businesses pay around $2,189 in workers' compensation costs for smokers, compared with $176 for nonsmokers.

To make matters worse, nonsmoking employees can receive workers' compensation, unemployment compensation, disability benefits, and other settlements due to secondhand smoke.

Indirect costs of smoking in the workplace include lost worker production time ($92 billion lost to smoking attributable diseases over a four year span), air cooling and ventilation costs, property damage, and the recruitment and retraining of new workers after the old ones get sick or die off.

Source: National Business Group On Health

Smartphones, time-wasting websites and gossip can cost U.S. companies an estimated $650 billion a year

General distraction in the office -- anything from your handheld to the water cooler -- helps drive down productivity for American business everywhere.

In fact, 53 per cent of workers agree that these distractions affect their productivity, despite an even larger number claiming having a smartphone makes them a better worker.

Source: CFO Daily News

A 2010 study showed that obesity among full-time employees cost their employers $73.1 billion a year

Another health-related issue that can cost employers big time is weight. Besides direct health care costs, 'presenteeism,' or showing up to work despite health issues, cost companies $12.1 billion per year.

And the more obese you are, the costlier: '...severely obese individuals with a body mass index greater than 35 accounted for 61 per cent of all obese employee costs, though they represent only 37 per cent of the overall obese population.'

Source: ABC News

Substance abusers cost their employers $7,000 a year and are 33% less productive than the average American worker

Drugs and alcohol are major productivity killers. Alcohol alone can be responsible for $119 billion in lost profits in a single year.

Furthermore, drug using employees are more often late or no-shows, more likely to get in workplace accidents, more likely to commit violations, and have higher medical costs.

Source: National Drug-Free Workplace Alliance

Occupational injuries and illnesses add up to an estimated $48.6 billion in compensation costs

And that's just the tip of the economic iceberg. The total economic costs of occupational deaths and injuries in 2004: $142.2 billion, with a total of 120 million days lost (in 2004) due to occupational deaths and injuries.

Source: American Society of Safety Engineers

Workplace violence affects over 2 million Americans and costs an estimated $36 billion a year

Workplace violence is considered one of the top security threats facing management today. Additionally, workplace fatalities are not uncommon. In 2002, there were 609 workplace homicides -- the third leading cause of death in the workplace.

Source: Corporate Alliance to End Partner Violence

Grief can lead to reduced productivity and increased mistakes, adding up to $75 billion a year

It may be a touchy subject, but grieving employees are costly. And how the company and co-workers handle the situation can either break or make that person's commitment to the company.

Source: The Wall Street Journal, Career Resources Institute

Domestic violence plays a larger role in the workplace than one might think, with a lost productivity cost of $727.8 million

44 per cent of employers admit that their bottom lines are affected by domestic violence, and for good reason:

  • Homicide was the second leading cause of death on the job for women in 2000
  • More than 29,000 acts of rape or sexual assault are perpetrated against women at work each year.
  • More than 1 million women are stalked each year in the U.S., and over a quarter of them report missing work as a result of the stalking.

Source: Family Violence Prevention Fund

Thievery and fraud in the workplace cost U.S. businesses $600 billion in 2003

Most employee theft is committed by workers with no criminal record, but the results are still costly.

A University of Florida study showed that theft is the cause of 48 per cent of inventory shrinkage, adding up to $15 billion dollars a year.

Source: Profiles International

Telecommuting could save American workers up to $3.9 billion in fuel costs

Almost 25 per cent of the American work force could work from home, but only 11 per cent do. And of that 11 per cent, nine per cent only do it one or two days a week rather than full time.

If everyone who could telecommute did, they would save a bundle on fuel.

Source: Wiser Ways To Work

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