Labor shortage accelerates shift away from drug testing for new hires

·3 min read

Drug tests are no longer required for most jobs in the municipal offices for Isle, Minnesota, a small town tucked on the southeastern corner of the Mille Lacs Lake.

The reason? The town’s liquor store needs just one more person so that its owner, Don Graber, can stop working double shifts on the weekend.

“There’s a lot of things that are scaring away potential hires and that was one of them,” Graber told Yahoo Finance.

Graber successfully lobbied the town to eliminate the drug test, a change that had to be applied across local government employment standards because the liquor store is run by the municipal government.

Employers across the country are facing similar issues as the Isle Municipal Liquor Store, prompting job posters to scrap any and all barriers to employment. Job listings boast “no drug screen” or “no drug test” in their posting titles, from a landscaper in Amelia, Ohio to a Napa Auto Parts stock associate in New Kingstown, Pennsylvania.

A job posting for Napa Auto Parts on the listings site Indeed notes
A job posting for Napa Auto Parts on the listings site Indeed notes "no drug screen or background check" in the title.

The search for labor is accelerating a shift away from drug tests already put into motion by the cascade of states moving to legalize recreational use of marijuana.

Last month, Amazon (AMZN) ditched drug tests from its screening program, adding that it supports federal legalization of marijuana.

Drug testing industry

Drug test manufacturers and third-party distributors and administrators had already been rocked by the pandemic. As the economy shut down, employment dried up — and along with it, the need for drug tests.

The Current Consulting Group, which advises companies in the industry, released survey results in August 2020 showing that nearly 60% of drug testing providers indicated that the total number of drug tests sold or processed by their company was down 41% or more since the start of the pandemic.

The consulting firm’s owner, Bill Current, said that many third-party drug test administrators (who liaise between employers and labs that do the actual drug testing) closed for good during the pandemic.

The labor market crunch isn’t helping, as industries like food services ditch drug tests in favor of keeping staff.

“If you’re testing them for marijuana more than anything, you’re probably going to lose a fairly significant percentage of your workforce — or have even more trouble finding workers if you have a very strict policy,” Current told Yahoo Finance.

Current's survey noted that only 5% of respondents indicated they were considering abandoning testing for THC, the active ingredient in cannabis.

Even with national trends favoring marijuana legalization, Current said federal and state laws requiring drug tests in jobs like those requiring commercial drivers licenses will keep the industry chugging along.

At Amazon, for example, drug tests are not completely gone. The company said it would continue to "do impairment checks on the job and will test for all drugs and alcohol after any incident."

Brian Cheung is a reporter covering the Fed, economics, and banking for Yahoo Finance. You can follow him on Twitter @bcheungz.

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