Lead author Micah Berman, an assistant professor of health services management and policy in the Ohio State University College of Public Health and Moritz College of Law who began the research while on the law faculty of Capital University in Columbus, said the team analyzed the cost of absenteeism, lost productivity, smoke breaks and healthcare costs of employees who smoked.
The researchers developed an estimate that each employee who smoked cost an employer an average of $5,816 annually above the cost of a person who never smoked, but these annual costs could range from $2,885-$10,125.
Smoking breaks accounted for the highest cost in lost productivity, followed by healthcare expenses exceeding insurance costs for non-smokers, Berman said.
The analysis used studies that measured costs for private-sector employers, but the findings would likely apply in the public sector as well, Berman said.
The study focused solely on economics and did not address ethical and privacy issues related to the adoption of workplace policies covering employee smoking.
Smokers comprise nearly a fifth of the adult U.S. population and a sixth of all adults in Britain.
The researchers' study is published online in Tobacco Control, a journal that's part of the BMJ Group, a wholly owned subsidiary of the British Medical Association.
Tobacco Control said in a release previous studies found smokers cost businesses money because of smoking-attributable productivity losses and medical costs, but estimates were vague and did not show who paid the costs.
The OSU researchers' calculations show low productivity due to excess absenteeism costs employers, on average, $517 a year per smoking employee and working while sick cost $462. Smoking breaks tack on $3,077 and excess healthcare another $2,056.
The researchers also determined because smokers tend to die younger, annual pension costs were an average of $296 less for an employee who smoked.
"Employees who smoke impose significant excess costs on private employers," the researcher said in a statement. "The results of this study may help inform employer decisions about tobacco-related policies.
"It is important to remember that the costs imposed by tobacco use are not simply financial costs. It is not possible to put a price on the lost lives and the human suffering caused by smoking. The desire to help one's employees lead healthier and longer lives should provide an additional impetus for employers to work towards eliminating tobacco from the workplace."