October 11, 2010

Where There Is Smoke, There Is Money Burning

By Paul Bieber

Whenever you see cigarette smoke in your glass shop, even your own smoke, money is going out the window. Let’s explore some of the ways that smoking affects your business…and your profits!

Before I continue, let me share my vice. Chocolate. It can be just as addicting, and does equal harm to the body. But since this is my blog, I am allowed to be judgemental.

It is easy for a non-smoker to spout the following facts and figures about smokers:

  • A pack-a-day smoker, at age 30, who quites and invests the same amount of money in a conservative 401k, will, at age 70, have in excess of $250,000. And probably more as cigarette prices go up.
  • Throat and mouth cancer are 200% more prevalent in smokers.
  • Life insurance costs about 100% more than for non-smokers.
  • If you have individual health insurance, expect to pay 30% more.
  • Most home insurance policies carry a 20% premium. (you are more likely to burn your house down!)
  • The same for car insurance.
  • Your dental care will be about twice as expensive over your life
  • Your house will have a lower resale value because of the pervasive smell of the smoke.

Can you as an employer or manager make people stop smoking as a term of employment? No. Most states do not allow you to control some one’s activities away from work. You can’t prohibit a Hershey bar away from work, nor can you stop employees from having a beer. These are legal activities.

But you can, and in my opinion you should, regulate certain behaviors at your workplace during working hours. Why should you eliminate smoking at work?

  • The productivity of your company will definitely go up. That’s a promise.
  • Your health insurance costs will not increase as much, as your utilization rates will be lower.
  • Your office, showroom or trucks won’t stink.
  • Your customers will linger longer in your showroom.

Many companies offer a smoking break for employees to smoke outside rather than inside. Do you offer the same to non-smokers? Can they stand around for five minutes and do nothing? How many times a day do you allow this? Why are you discriminating against the non-smokers?

Not one state makes you offer this very expensive benefit to less than 20% of the workforce.

Can you hire non-smokers only? Only in a couple of states, and those are being challenged. You can make smoking prohibited in your building and anywhere on your property. If you make this clear during the interview, you are fine. Let the potential employee make the decision.

How do you implement a non-smoking policy when one of your key employees sets the all-time record for being a chimney? Start by having a heart-to-heart with Molly Smoker. Offer to pay for the stop-smoking medications that may not be covered under the insurance plan, or offer to pay the deductibles. Support Molly in every way you can, showing understanding that for a month or two Molly may be a very uncomfortable person to be around. Give Molly a bonus at the end of three months of non-smoking. Have a chart in the office showing the non-smoking days for all employees and get the whole company to be a support group.

You can also go with a two-tier program. Employees hired after a certain date cannot take smoking breaks, while current employees are grandfathered under previous work rules. This works in all fifty states.

Some states allow you to ask if an applicant is a smoker. Some do not. Don’t worry about it, just don’t ask the question. Simply state in your help wanted ad, or in the interview, that your business is a non-smoking location. The heavy smokers will go somewhere else. If someone is a three cigarette a day person, you should have no problem hiring them.

Health insurance rates are set in two broad ways. One is all companies of a certain size get the same rate. The other is to look at the utilization rate. This is the actual costs incurred by all members of a plan. If the insurer lost money last year, this year’s premium will go through the roof. Smokers cost more in medical costs, that’s a fact. So fewer smokers can equal lower insurance costs for your medical plan.

The bottom line? You can (and should) restrict smoking in your company and on your property. You should encourage in all ways possible your current smokers to quit, and you can set a policy of new hires are not allowed to take smoking breaks.

I have to go now, I haven’t had any chocolate in an hour, and I am due.