Is Smoking Costing Your Business?

Is Smoking Costing Your Business?

The personal costs of smoking are well understood by many. The various debilitating health issues, addiction, and ultimately death. The financial costs are staggering too, with the price of tobacco products at all time highs in the UK with no plans to reduce them on the horizon.

The vast majority of this cost to UK smokers is actually tax. The reason taxation is so high on these products is not just because they are harmful to your health, or even because the government is actively working to drive down smoking rates from 15% to 5% by 2030. In fact, the government needs to recoup its losses through this taxation – smoking costs the UK a staggering amount of money every year.

The real cost of smoking

The financial impact of smoking goes far beyond the price of a pack of 20. There is a significant number of ways in which it can impact people’s financial stability, either directly as a user of tobacco, or as an employer trying to operate a business.

In fact, the cost to productivity and in turn the economy in the UK is staggering. Major anti-smoking lobbyists Action on Smoking and Health (ASH) have collected data on this impact. Their most recent findings as of January 2022 revealed that smoking costs society far more than previous estimates.

The results show that the cost of smoking to society totals £17.04 billion each year – for England alone. The previous estimates were £12.5 billion, quite far removed from the reality despite still being a frightening figure.

 

Lost Productivity

The reason for the difference between the new and previous estimates is directly down to a more in-depth assessment of smoking’s impact on productivity. Smokers were found to be more likely than non-smokers to become ill while of working age. Recent Government reports state this may be lessened by switching to e-cigarettes and e-liquids, if only due to the fact the user will be exposed to 95% fewer harmful compounds by comparison, reducing the chance of illness.

This increases the likelihood of being out of work more often, therefore reducing the average wages of smokers. There is a far higher chance that smokers will die while of working age also, further compounding the economic loss to the tune of £13.2 billion.

From as far back as 2012, studies have showcased findings that smokers at that time were far more likely to have time off from work. This can be especially damaging to the livelihood of those who do not receive sick-pay entitlement.

However recent research carried out by Landman Economics (2020) and presented by ASH found that: “smoking has a significant negative impact on individual earnings and employment prospects, with long-term smokers being 7.5% less likely to be employed than non-smokers and smokers earning, on average, 6.8% less than non-smokers.” The cumulative impact of these effects across the UK amounts to £14.1bn lost in income to smokers every year.

While technically this means as an employer you stand to pay out less per annum for a smoker who has had medical leave, you are paying the price in productivity; a smoker’s hands are on-deck far less than those who abstain. Even when not on sick-leave, smokers will often require more breaks than a non-smoker to practice the habit, further reducing productivity.

These breaks also cause rifts between employees who feel smokers are rewarded for their bad habits, whereas those who work consistently through their day receive no additional time off or recompense by comparison. As an employer it places additional pressure in how best to manage the situation while avoiding accusations of discrimination.

Many businesses have actually adopted policies whereby non-smokers gain additional holiday days or time in lieu. How would you approach the disparity if it became an issue in your workplace?

Property Damage

While split between private and commercial properties, smoking plays a major role in nationwide property losses. Both homes and businesses have burned down because of smoking related accidents, and fires caused in this way are the lead cause of fire-related deaths.

The costs of property damage, injury and death because of smoking-related fires is estimated to contribute another £280 million towards the total.

Property on fire

Tax Doesn’t Cover the Cost

The UK government has massively increased the cost of tobacco products through rising taxation and massive duties. An estimated £12 billion in smokers income is spent on tobacco in England alone, equivalent to £2000 per smoker.

The tobacco industry has long claimed they compensate society through paying duties, but in reality the 2020/21 excise paid fell just below £10 billion for England. Despite being the highest amount paid to-date, it is still nowhere near the £17.04 billion costs.

Between the business costs above, pressures on institutions like the NHS totalling around £2.4 billion through smoker’s needs for multiple levels of lifelong care and support from young ages, the taxation doesn’t cut it. ASH estimates an additional £14 billion is needed to cover the true costs of care needed to effectively support smokers.

We all stand to gain from reducing smoking rates

Ultimately, if less was being spent on tobacco, more would be spent elsewhere, providing a huge boon to the economy. Non-tobacco businesses, it is estimated, would see significant uplift in sales owing to the increase in disposable income one gains from quitting smoking.

ASH states that:

“economic analysis commissioned by ASH last year found that if the country could stub out smoking for good the economic benefits would go even wider as smokers switch their spending from tobacco to other goods and services which benefit the economy more. In total this would generate around half a million jobs, with a net benefit to public finances of £600m”

Besides economic benefits, reduced pressures on the NHS and other services mean we all stand to receive higher levels of care, with reduced waiting times and significant reductions to staff stress.

Is there an argument for vaping?

Vaping presents one of the most promising changes to stop smoking services in recent years, with even the NHS noting just how many people are finding success by using e-cigarettes to help them quit.

The data above tells us plenty about the benefits to both private and commercial society gained by reducing smoking rates, and if vaping gives us the best chance of seeing those benefits become reality, then should it be embraced?

woman vaping

As a vaping business, we have incorporated smoking cessation into our Corporate Social Responsibility (CSR) policy. We run internal projects to help any staff members who want to try an alternative to smoking. Could your business do the same? Or encourage your teams to seek help and support on that journey?

Not only would it give people a chance to make a positive change, but as an added bonus your staff will be less likely to need time off from smoking related illness. There isn’t much data examining the difference between vaping and smoking breaks, however as a business we have noticed our vapers spend less time having a quick puff than those who are outside for a whole cigarette.

With that said, while it could be a beneficial exercise, converting all smokers to vapers is not an all-in-one solution. Every person has individual needs and it is more important that people find an alternative that works for them, not just shoehorning vaping into their lives.

Our Sources:

https://ash.org.uk/wp-content/uploads/2020/08/LandmanEconomics-smoking-employment-earnings-technicalreport.pdf https://www.ashscotland.org.uk/media/6684/Smoking%20and%20Debt.pdf https://ash.org.uk/media-centre/news/press-releases/smoking-costs-society-17bn-5bn-more-than-previously-estimated



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