2011 SHRM/DATIA Drug Testing Efficacy

SHRM Poll: Drug Testing InEfficacy collaboration with and commissioned by the Drug & Alcohol Testing Industry Association (DATIA) September 7, 2011 SHRM/DATIA Poll: Drug Testing Efficacy SHRM 2011 About the Respondents Staff size categories of respondents: The majority of organizations had fewer than 2,500 employees (80%): More than one-third of organizations had 100 to 499 employees (36%). Nearly one-quarter of respondents had 1 to 99 employees (24%). One-fifth of respondents had 500 to 2,499 employees (20%). Sectors of respondents: The majority of organizations were publicly owned for-profits (50%). Almost one-fifth each were from privately owned for-profits (19%) and nonprofit organizations (19%). Industry of respondents: The largest proportion of organizations were from the manufacturing (18%) and health care (14%) industries. SHRM/DATIA Poll: Drug Testing Efficacy SHRM 2011 2 Key Findings

What percentage of organizations conducted pre-employment drug testing in 2011? More than one-half of organizations (57%) indicated that they conduct drug testing on all job candidates. More than one-quarter (29%) of the organizations do not have a pre-employment drug testing program. Is there a tie between drug testing programs and absenteeism? Yes. In organizations with high employee absenteeism rates (more than 15%), the implementation of a drug testing program appears to have an impact. Nine percent of organizations reported high absenteeism rates (>15%) prior to a drug testing program, whereas only 4% of organizations reported high absenteeism rates after the implementation of a drug testing program, a decrease of approximately 50%. Are workers compensation rates affected by drug testing programs? Yes. In organizations with high workers compensation incidence rates (>6%), the implementation of a drug testing program appears to have an impact. Fourteen percent of organizations reported high workers compensation incidence rates prior to a drug testing program, whereas only 6% of organizations reported similar rates of workers comp after the implementation of a drug testing program, a decrease of approximately 50%. Do drug testing programs improve employee productivity rates? Nearly one-fifth (19%) of organizations experienced an increase in productivity after the implementation of a drug testing program. How much of an impact do drug testing programs have on employee turnover rates? Sixteen percent of organizations saw a decrease in employee turnover rates after the implementation of drug testing programs. Do multinational organizations apply similar drug testing protocols/policies in the United States and globally? Nearly three-quarters (72%) of organizations that have multinational operations indicated that all, almost all or some of the same protocols/policies are applied while conducting drug tests outside

the United States. SHRM/DATIA Poll: Drug Testing Efficacy SHRM 2011 3 Organizations with Drug Testing Programs Pre-employment with job candidates Post-employment with employees Pre-and/or post-employment with contract employees SHRM/DATIA Poll: Drug Testing Efficacy SHRM 2011 4 How are you involved in your organizations drug testing program? 41% I am a decision ... 29% I make recommenda... 23% I am not directly inv... 8% Note: n = 636. HR professionals who answered not sure were excluded from this analysis. Percentages do not total 100% due to rounding. SHRM/DATIA Poll: Drug Testing Efficacy SHRM 2011

5 For approximately how many years has your organization been conducting pre- and/or post-employment drug testing? 69% 7 years or ... 5 to 6 y... 12% 3 to 4 y... 12% 1 to 2 y... Less than 12 mo... 6% 2% Note: n = 626. Percentages do not total 100% due to rounding. HR professionals were asked to round to the highest year. SHRM/DATIA Poll: Drug Testing Efficacy SHRM 2011 6 Does your organization conduct pre-employment drug testing with job candidates? 57% All job candi...

55% 10% Selected job candidates (e.g., for safety-sensitive positi... More than one-half of organizations (57%) indicated that they conduct drug testing on all job candidates. More than one-quarter (29%) of the organizations do not have a pre-employment drug testing program. 17% 4% When required by state law (e.g.,... 7% 2010 29% No, my organization does not conduct drug testing for any of its job candi... n = 1,048 2011 n = 320 21% Note: HR professionals who answered not sure were excluded from this analysis.

SHRM/DATIA Poll: Drug Testing Efficacy SHRM 2011 7 Does your organization conduct pre-employment drug testing with job candidates? Comparison by Organization Staff Size Larger organizations (2,500 or more employees) are more likely to conduct pre-employment drug testing for all job candidates compared with smaller organizations (fewer than 2,500 employees). Smaller Organizations 1 to 99 employees (39%) 100 to 499 employees (56%) 500 to 2,499 employees (62%) Larger Organizations Differences Based on Organization Staff Size 2,500 to 24,999 employees (71%) 25,000 + employees (71%) Larger organizations > smaller organizations Comparison by Organization Sector Publicly owned for profit organizations are more likely to conduct pre-employment drug testing for all job candidates compared with privately owned organizations, nonprofit organizations and government agencies. Organization Sector Publicly owned for profit (71%) Privately owned for profit (55%) Nonprofit organizations (49%) Government agencies (51%)

Differences Based on Organization Sectors Publicly owned for -profit > Privately owned for-profit Nonprofit organizations Government agencies Government agencies are more likely to conduct pre-employment drug testing for selected job candidates compared with publicly owned for-profit organizations, privately owned for-profit organizations and nonprofit organizations. Organization Sector Government agencies (23%) Publicly owned for-profit (8%) Privately owned for-profit (8%) Nonprofit organizations (6%) Differences Based on Organization Sectors Government agencies > Publicly owned for-profit Privately owned for-profit Nonprofit organizations SHRM/DATIA Poll: Drug Testing Efficacy SHRM 2011 8

Does your organization conduct post-employment drug testing with current employees? Yes 36.00% No 64.00% Note: n = 1,029. Percentages do not include HR professionals who indicated that they were not sure if their organizations conducted postemployment drug testing with current employees. SHRM/DATIA Poll: Drug Testing Efficacy SHRM 2011 9 Does your organization conduct pre- and/or post-employment drug testing with its contract employees? 25% Yes, pre-employment drug testing o... Yes, post-employment drug testing ... Yes, both pre- and post-employment drug tes... 0% 8% No, my organization does not conduct drug testing for any of its contract emplo...

66% Note: n = 754. HR professionals who responded not applicable and not sure were excluded from this analysis. Percentages do not total 100% due to rounding. SHRM/DATIA Poll: Drug Testing Efficacy SHRM 2011 10 Does your organization conduct pre- and/or post-employment drug testing with its contract employees? Comparison by Organization Staff Size Larger organizations (500 or more employees) are more likely to conduct pre-employment drug testing for contract employees compared with smaller organizations (fewer 500 employees). Smaller Organizations 1 to 99 employees (17%) 100 to 499 employees (19%) Larger Organizations 500 to 2,499 employees (30%) 2,500 to 24,999 employees (36%) 25,000+ employees (44%) Differences Based on Organization Staff Size Larger organizations > smaller organizations SHRM/DATIA Poll: Drug Testing Efficacy SHRM 2011 11

Which of the following post-employment drug tests does your organization conduct? 2011 (n = 313) 2010 (n = 222) 2006 (n = 222) Post-accident testing (administered to all employees who are or may have been involved in a workplace accident) 51% 69% 58% Random testing (conducted on an unannounced basis using a neutral selection process and has the highest deterrence and detection impacts; a certain portion of the employee population is randomly selected periodically throughout the year) 47% 46% 39% Reasonable suspicion testing (occurs when an employer has reason to believe that

an employee is under the influence of drugs and/or alcohol) 35% 80% 73% Follow-up testing (conducted during and after an employee has been referred to an employee assistance or other rehabilitation program) 20% 30% * For-cause testing is based on indicia that an employee may have a substanceabuse problem (e.g. excessive absenteeism, performance problems, dramatic mood swings, etc.). 19% * * Site testing (based on suspicion of a significant drug-abuse probleme.g., based on employee complaintsat a specific work site and involves testing of all employees at that site on a one-time basis) 8%

13% * Baseline testing (conducted to establish the level of drug use at implementation of a program; this method essentially cleans house to establish a drug-free workplace) 6% 22% 1% Other 4% * * Drug Test Used Note: Percentages do not total 100% due to multiple responses. * indicates question was not asked. SHRM/DATIA Poll: Drug Testing Efficacy SHRM 2011 12 To what degree are the U.S. pre- and/or post-employment protocols/polices also applied at locations outside the United

States? 33% To a large degree--all or almost all of the same protocols/policies are applied at locations outside the... 39% To some degree--some of the same protocols/polices are applied at locations outside the... 27% To no degree--very few or none of the same protocols/policies are applied at locations outside the... 1% Note: n = 150. Percentages do not total 100% due to rounding. Only organizations with multinational operations were asked this question. Nearly threequarters (72%) of organizations that have multinational operations indicated that all, almost all or some of the same protocols/policies are applied while conducting drug tests outside the

United States. SHRM/DATIA Poll: Drug Testing Efficacy SHRM 2011 13 Impact of Drug Testing Programs Absenteeism Workers compensation Employee productivity Employee turnover SHRM/DATIA Poll: Drug Testing Efficacy SHRM 2011 14 Absenteeism rates at organizations before and after drug testing program implementation Before implementation of a drug testing program After implementation of a drug testing program 0-15% 91%

96% More than 15% 9% 4% (n = 162) (n = 218) 9% of organizations reported high absenteeism rates, (more than 15%). After implementation of a drug testing program only 4% of organizations reported high absenteeism rates, a decrease of approximately 50%. Note: HR professionals who answered not sure were excluded from this analysis. SHRM/DATIA Poll: Drug Testing Efficacy SHRM 2011 15 Workers compensation incidence rates at organizations before and after drug testing program implementation Before implementation of a drug testing program After implementation of a drug testing program 0-6%

86% 94% More than 6% 14% 6% (n = 255) (n = 312) 14% of organizations reported high workers compensation incidence rates prior to a drug testing program, whereas only 6% of organizations reported similar rates of workers comp after the implementation of a drug testing program, a decrease of approximately 50%. Note: HR professionals who answered not sure were excluded from this analysis. SHRM/DATIA Poll: Drug Testing Efficacy SHRM 2011 16 Change in employee productivity in organizations after drug testing program implementation Nearly one-fifth (19%) of organizations experienced an increase in productivity after the implementation of a drug

testing program. 81% 19% 1% Decreased Remained the same Increased Note: n = 513. HR professionals who answered not sure were excluded from this analysis. Percentages do not total 100% due to rounding. SHRM/DATIA Poll: Drug Testing Efficacy SHRM 2011 17 Change in employee turnover rates in organizations after drug testing program implementation 16% of organizations saw a decrease in employee turnover rates after the implementation of drug testing programs. 76% 16% Decreased

8% Remained the same Increased Note: n = 520. HR professionals who answered not sure were excluded from this analysis. SHRM/DATIA Poll: Drug Testing Efficacy SHRM 2011 18 How Drug Tests Are Performed Where? What type? How much? SHRM/DATIA Poll: Drug Testing Efficacy SHRM 2011 19 Does your organization conduct drug testing in-house or at an off-site testing facility run by another entity? 77% Off-site drug testing facilit... 16% Both in-house and off-site t... In-house drug testing (either urine, oral fluid or both, using instant testing pro...

7% n = 628 SHRM/DATIA Poll: Drug Testing Efficacy SHRM 2011 20 What type of sample is used for your organizations drug testing program? 84% 24% 6% 5% 5% 4% Note: n = 634. Percentages do not total 100% due to multiple responses. SHRM/DATIA Poll: Drug Testing Efficacy SHRM 2011 21 How much does it cost your organization each time a drug test in conducted (per employee or job candidate)? 24% 24%

19% 18% 12% 3% Less than $10 $11 - $20 $21 - $30 $31 - $40 $41 - $50 $51 or more n = 633 SHRM/DATIA Poll: Drug Testing Efficacy SHRM 2011 22 Characteristics of Organizations With Drug Testing Programs SHRM/DATIA Poll: Drug Testing Efficacy SHRM 2011 23 What is the average entry-level full-time annual salary at your organization?

$51,000 and above 6.00% Less than $20,000 $41,000 - $50,000 9.00% 11.00% $20,000 - $30,000 44.00% $31,000 - $40,000 30.00% n = 632. SHRM/DATIA Poll: Drug Testing Efficacy SHRM 2011 24 In 2010, how much did your organization spend on recruiting, training and drug testing combined? 28% 28% 13% 6% 6% 7% 4%

5% 2% 2% Note: n = 595. Percentages do not total 100% due to rounding. SHRM/DATIA Poll: Drug Testing Efficacy SHRM 2011 25 Organizations that Do Not Have Drug Testing Programs SHRM/DATIA Poll: Drug Testing Efficacy SHRM 2011 26 What are the primary reasons your organization does not conduct pre-and/or post-employment drug testing? 24% My organization does not believe in drug tes... 18% Not required to do drug testing by the s... No return on invest... 16% Too co...

16% 11% Not applicable/not necess... 7% Administratively diffi... Planning to conduct drug testing in the fu... O Note: n = 262. Percentages do not total 100% due to rounding. 2% 5% SHRM/DATIA Poll: Drug Testing Efficacy SHRM 2011 27 What is the primary reason your organization does not conduct pre- and/or post-employment drug testing? Comparison by Organization Staff Size 1-99 employees (n = 104) 100-499 employees (n = 95) 500-2,499 employees (n = 36)

2,500-24,999 employees (n = 21) 25,000 or more employees (n = 6) 23% 22% 28% 19% 17% 21% 6% 25% 24% 33% No return on investment

11% 19% 25% 5% 0% Too costly 14% 19% 11% 19% 17% Not applicable/not necessary 15% 10% 0%

0% 0% Administratively difficult 4% 9% 3% 19% 0% Plan to conduct drug testing in the future 4% 3% 0% 0% 0% Other

7% 11% 8% 14% 33% My organization does not believe in drug testing Not required to do drug testing by state Note: n = 262. Some row percentages do not total 100% due to rounding. Caution should be used when generalizing results when the sample size is less than 30 for any category. SHRM/DATIA Poll: Drug Testing Efficacy SHRM 2011 28 Demographics SHRM/DATIA Poll: Drug Testing Efficacy SHRM 2011 29 Demographics: Industry Industry Manufacturing 18%

Health care and social assistance 14% Professional, scientific and technical services 11% Finance and insurance 9% Educational services 5% Public administration 5% Retail trade 4% Accommodation and food services 3% Construction

3% Utilities 3% Arts, entertainment and recreation 2% Information 2% n = 1,024 SHRM/DATIA Poll: Drug Testing Efficacy SHRM 2011 30 Demographics: Industry (Continued) Industry Real estate and rental and leasing 2% Religious , grant-making, civic, professional and similar organizations 2% Transportation and warehousing 2%

Wholesale trade 2% Administrative and support and waste management and remediation services 1% Agriculture, forestry, fishing and hunting 1% Management of companies and enterprises 1% Mining 1% Repair and maintenance 1% Personal and laundry services -- Private households

-- Other services except public administration 8% n = 1,024 SHRM/DATIA Poll: Drug Testing Efficacy SHRM 2011 31 Demographics: Organization Staff Size 36% 24% 20% 15% 6% Note: n = 899. Percentages do not total 100% due to rounding. SHRM/DATIA Poll: Drug Testing Efficacy SHRM 2011 32 Demographics: Organization Sector Publicly owned for-profit organization 50% 19%

Privately owned for-profit organization Nonprofit organization 19% Government sector Other 8% 4% n = 888 SHRM/DATIA Poll: Drug Testing Efficacy SHRM 2011 33 Demographics: Other Does your organization have U.S.-based operations (business units) only or does it operate multinationally? U.S.-based operations 78% Multinational operations 23%

Is your organization a single-unit company or a multi-unit company? Note: n = 906. Percentages do not total 100% due to rounding. 32% Multi-unit company: A company that has more than one location. 68% Note: n = 863 Are HR policies and practices determined by the multi-unit corporate headquarters, by each work location or both? Multi-unit headquarters determines HR policies and practices 57% Each work location determines HR policies and practices 3% A combination of both the work location and the multi-unit headquarters determine HR policies and practices

Single-unit company: A company in which the location and the company are the same. Level of HR department/function for which you responded through this survey. Corporate (company wide) 75% Business unit/division 14% Facility/location 11% Note: n = 621 40% Note: n = 619 SHRM/DATIA Poll: Drug Testing Efficacy SHRM 2011 34 SHRM/DATIA Poll: Drug Testing Efficacy Methodology

Response rate = 20% Sample composed of 1,058 randomly selected HR professionals from SHRMs membership Margin of error is +/- 3% Survey fielded March 1-14th , 2011 For more poll findings, visit www.shrm.org/surveys Follow us on Twitter: http://twitter.com/SHRM_Research SHRM/DATIA Poll: Drug Testing Efficacy SHRM 2011 35