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Cost Effectiveness of Sub stance-Abuse Treatment in Casino Hotels

Hacienda Hotel and Casino in Las Vegas.

Robert W. Eder

School of Business Administration at Portland State University.

An employer's investment in substance-abuse treatment programs for employees can be paid for in part by the savings gained by retaining successfully treated workers and increasing their productivity This article analyzes the costs and benefits of two substance-abuse treatment programs that are administered as part of two hotel-casinos' employeeassistance programs (Mirage's and Resorts International's). Some of the costs of substance abuse are obvious, such as those associated with theft, diminished productivity, and turnover. But other costs are not so obvious, such as supervisors' time to manage abusing employees and to hire replacement workers. The analysis indicates that if management can minimize the substance-abuse problem in the workplace, the operation will be able to recover many of the overt and hidden costs associated with substance abuse. Those savings, in turn, can be used to offset the costs of the treatment program. For example, if the average cost to replace an employee is $1,500, and if successful treatment of substance-abusing employees results in 1 00 fewer turnovers per year, then the property may be able to save $150,000 in turnover costs per year. The same logic holds for such costs as managing absenteeism. This study shows that substantial savings can be realized, and at the same time the quality of life for all employees can be greatly improved.

Cornell Hotel and Restaurant Administration Quarterly, Vol. 33, No. 1, 56-67 (1992)
DOI: 10.1177/001088049203300122


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