U.S. Employer And Workplace Drug Testing Market Size, Share & Trends Analysis Report By Type (Pre-employment Drug Screens), By Product, By Mode, By Drug, By End-use, By Region, And Segment Forecasts, 2024 - 2030

Market Size & Trends

The U.S. employer and workplace drug testing market size was estimated at USD 2.47 billion in 2023 and is projected to grow at a CAGR of 5.1% from 2024 to 2030. The market growth is driven by a combination of regulatory mandates, workplace safety concerns, and the growing societal focus on health and productivity. As employers increasingly recognize the importance of maintaining a drug-free workplace, drug testing has become a critical tool. American Addiction Centers, a national survey revealed that 15.3% of U.S. workers reported working under the influence of alcohol, and 2.9% admitted to being under the influence of illicit drugs in 2024. These statistics highlight a significant challenge for U.S. employers, emphasizing the need for robust workplace drug testing policies.

Substance misuse at work can lead to decreased productivity, increased absenteeism, higher rates of workplace accidents, and potential legal liabilities. As a result, employers are increasingly investing in comprehensive drug testing programs to maintain a safe and efficient work environment, protect their workforce, and reduce the risk of costly incidents & lawsuits.

Workplace drug testing is a critical measure for enhancing safety, especially in high-risk industries such as construction, manufacturing, and transportation. By systematically screening employees for drug and alcohol use, employers significantly reduce the likelihood of accidents and injuries on the job. Substance use can impair judgment, reaction times, and overall cognitive function, leading to dangerous situations that not only jeopardize the safety of the individual but also of coworkers and the general public. Implementing robust testing programs helps employers identify and address substance use among their workforce, thereby fostering a safer, more productive work environment.

The rising prevalence of substance use disorders (SUD) among employees highlights the necessity of comprehensive testing programs in the workplace. Substance use poses significant challenges to U.S. industries, contributing to productivity declines, higher rates of absenteeism, and more frequent illnesses. Moreover, it negatively impacts employee morale and leads to an increase in workplace accidents and injuries, which collectively cost American businesses billions of dollars annually.

According to a National Safety Council report, 8.7% of working adults experienced an SUD within the last year, including 6.9% with an alcohol use disorder and 1.5% with a cannabis use disorder. Additionally, about 31.5% of working adults reported binge drinking at least once in the past 30 days. These statistics underscore the critical need for workplace drug testing as a proactive strategy to mitigate the adverse effects of substance use on both individual employees and the broader organizational culture.

As employers become more aware of the dangers associated with substance abuse, they are increasingly prioritizing pre-employment drug screening. This growing focus is fueling the expansion of the workplace drug testing market, as organizations seek reliable solutions to manage risks and ensure compliance with regulatory requirements.

Drug testing can be conducted during pre-employment screenings or at various points throughout an employee's tenure. These tests typically screen for substances such as amphetamines, cocaine, marijuana, opiates, and phencyclidine, though additional substances may also be tested. Urine testing remains the most commonly used method due to its cost-effectiveness and reliability, though some employers also utilize hair, saliva, or blood tests for more comprehensive screening. The growth of the U.S. market for employer and workplace drug testing is closely linked to these evolving practices and the increasing need for effective screening solutions.

Market Concentration & Characteristics

The U.S. employer and workplace drug testing market is experiencing a high degree of innovation, driven by advancements in rapid testing technologies, non-invasive testing methods like saliva and hair analysis, and the integration of artificial intelligence for more accurate and efficient results. Additionally, the development of remote testing solutions is addressing the challenges posed by the increasing trend of remote and hybrid work environments.

The market for employer and workplace drug testing in the U.S. has seen a notable level of M&A activity, with companies seeking to enhance their service offerings and technological capabilities. For instance, in October 2022, Omega Laboratories acquired Acumium, a technology and software development firm, to form Omega Technology Solutions. This strategic acquisition strengthened Omega’s ability to provide faster and more reliable results.

Regulations significantly impact the U.S. employer and workplace drug testing market by mandating testing in safety-sensitive industries, such as transportation and healthcare. Compliance with federal and state laws drives demand for drug testing services, ensuring workplaces remain drug-free. Evolving legal landscapes, including changing marijuana laws, also compel employers to regularly update their testing policies, further shaping market dynamics.

Product expansion in the market is driven by the need to address emerging drug trends. In October 2023, Psychemedics Corporation introduced its Advanced 5-Panel Drug Screen, an FDA-cleared test replacing marijuana with fentanyl detection. This new panel responds to the rising fentanyl crisis and also tests for cocaine, opioids, PCP, and amphetamines. It offers significantly improved accuracy, with enhanced detection capabilities-25 times more effective for opioids, 23 times for cocaine, and 13 times for amphetamines compared to traditional tests.

Regional expansion is driven by the growing demand for testing services across various states, particularly those with strict regulatory requirements. Companies are broadening their geographic reach to tap into markets with high industrial activity, such as the Midwest and South, where safety-sensitive industries like manufacturing and transportation are prevalent. Additionally, regional expansion efforts often focus on establishing local laboratories and service centers, enhancing accessibility and reducing turnaround times for employers across different regions.

Types Insights

The post-employment segment dominated the market in terms of revenue share in 2023 and is expected to grow at a CAGR of 4.9% over the forecast period. Reducing the risk of accidents, workplace injuries, and associated liabilities is a crucial driver for post-employment drug testing in the U.S. Employers in high-risk industries such as construction, transportation, and manufacturing are acutely aware of the dangers posed by impaired employees to workplace safety.

According to the U.S. Department of Transportation, drunk-driving crashes claimed an average of 11,000 lives annually from 2013 to 2022, with 13,524 fatalities recorded in 2022 alone. Approximately 32% of all traffic crash fatalities involve drivers with a Blood Alcohol Concentration (BAC) of .08 g/dL or higher. Consequently, employers are increasingly prioritizing post-employment screening to identify and prevent impaired driving among employees, particularly in roles involving vehicle operation or heavy machinery. This proactive approach not only improves workplace safety but also mitigates legal liabilities and reduces the operational risks associated with substance abuse.

The pre-employment drug screens segment in the market is anticipated to grow at the fastest CAGR. Legal and regulatory compliance is a key driver of pre-employment drug screening in the U.S. Federal mandates, such as those issued by the Department of Transportation (DOT), require drug testing in safety-sensitive industries to ensure workplace safety and minimize liability risks. Additionally, state-specific laws further emphasize the necessity of drug testing, with many states mandating it for specific positions. Adhering to these regulations not only protects companies from potential legal issues but also enhances operational efficiency by reducing risks associated with impaired employees. Compliance with these standards is essential for maintaining corporate integrity and gaining investor confidence.

To alleviate the financial burden on employers, several insurance companies are now covering drug testing expenses, making pre-employment screening more accessible and attractive, particularly for smaller businesses. For example, on February 22, 2023, the Trustees of the MEBA Medical and Benefits Plan introduced a Technical Amendment to clarify the Plan's Rules and Regulations concerning Pre-Employment Drug Testing. The new Article VI-A, titled "Pre-Employment Drug Test Benefit," allows eligible employees to receive coverage for a pre-employment drug test once every six months. To qualify, employees must have worked in covered employment for at least 60 days within the preceding six months and be employed by an employer subject to the DOT's drug testing regulations under 49 C.F.R. Part 40.

Product Insights

The consumable segment dominated the market in terms of revenue share of 33.42% in 2023. The consumables segment in the U.S. employer and workplace drug testing market encompasses a variety of essential products, including urine collection cups, saliva swabs, hair collection kits, test strips, reagent kits, and chain-of-custody forms. This segment is vital for ensuring the accuracy and reliability of drug tests, which directly impacts the effectiveness of screening programs. The market is highly competitive, with major players like Quest Diagnostics, Labcorp, and Abbott leading due to their extensive product ranges and well-established distribution networks.

To gain a competitive advantage, companies are increasingly investing in the development of more efficient and user-friendly consumables, such as rapid test kits and integrated collection devices. The regulatory landscape significantly influences the consumables segment, with federal guidelines from the Department of Transportation (DOT) and the Substance Abuse and Mental Health Services Administration (SAMHSA) setting specific standards for drug testing procedures and associated products. Adhering to these regulations is essential for companies to maintain credibility and avoid legal consequences. Additionally, emerging state-level legislation, such as Washington State's SB 5123, is prompting shifts in the types of consumables required, particularly in the context of marijuana testing.

The services segment is anticipated to grow at the highest CAGR from 2024 to 2030. The market is highly competitive, featuring a wide array of players, from established diagnostic laboratories to specialized testing service providers. These companies hold a dominant position in the market due to their extensive laboratory networks and diverse testing services, which include urine, hair, saliva, and blood tests. They offer comprehensive testing solutions with rapid turnaround times and nationwide coverage, leveraging strong brand presence and advanced technological capabilities to maintain a competitive edge. Companies like First Advantage, Psychemedics, and Omega Laboratories focus on niche areas, such as hair drug testing or specialized employer screening services. Psychemedics, for example, is renowned for its patented hair testing technology, which provides a longer detection window than other methods. This specialization allows these companies to carve out distinct positions in the competitive landscape.

Mode Insights

The urine segment held the largest market share of 41.38% in 2023. Urine tests are the most common type of pre-employment drug tests used by employers, driven by their established reliability and ease of use. This method remains a staple in both regulated and non-regulated industries, ensuring consistent application across various sectors. For employers conducting drug screens under federal mandates, urinalysis is the only approved method. This compliance requirement solidifies the use of urine testing as the standard, especially in industries where federal regulations are stringent.

The oral fluid segment is expected to grow at the fastest CAGR over the forecast period. Oral fluid offers a rapid and noninvasive specimen collection method. However, challenges such as insufficient fluid due to physiological conditions or recent drug use, as well as potential interference from food or techniques to stimulate saliva production, can impact drug concentration measurements. Currently, oral fluid testing is primarily used for drug abuse detection in safety-sensitive workplaces, roadside testing for drivers, and other scenarios where drug impairment is a concern. This testing method covers substances such as alcohol (ethanol), amphetamines, cocaine, opioids (such as morphine, methadone, & heroin), and cannabis. The evolving use of oral fluid testing significantly influences the U.S. drug testing market by offering a less invasive alternative to traditional methods and driving the market growth.

Drug Insights

The cannabis/marijuana segment held the largest market share of 56.89% in 2023 and is expected to grow at the fastest CAGR of 5.9% over the forecast period. The legalization and decriminalization of marijuana in many states has diminished the stigma surrounding its use, leading to increased consumption, including among employees. According to the 2022 National Survey on Drug Use and Health (NSDUH), approximately 70.3 million people aged 12 and older-24.9% of the total population-reported using illicit drugs in the past year. Marijuana was the most commonly used drug, with 22% of individuals aged 12 and older, equating to 61.9 million people, acknowledging its use. This trend is likely to drive demand for advanced testing solutions as employers work to maintain safe and productive workplaces amid shifting drug use patterns.

The amphetamine & methamphetamine segment is expected to grow significantly in forecast period. Their misuse is linked to problems such as higher absenteeism, reduced productivity, and greater safety risks. Consequently, the growing prevalence of amphetamine and methamphetamine use is expected to drive higher demand for employer and workplace drug testing.

End-use Insights

Other professional services dominated the market with the largest revenue share of 39.11% in 2023. Other professional services include Professional, Scientific and Technical, Wholesale Trade, and Public Administration. The demand for employer and workplace drug testing in the U.S. is driven across various professional services sectors, including Professional, Scientific and Technical, Wholesale Trade, and Public Administration industries, due to the critical nature of their work and the need for maintaining high standards of safety, compliance, and productivity.

In the Professional, Scientific, and Technical sectors, employees often handle sensitive information, conduct complex analyses, and engage in high-stakes decision-making where impairment could lead to costly errors and compromised data integrity. Drug testing ensures that workers are operating at their highest capacity, protecting both project outcomes and client trust.

Transportation is projected to experience significant growth over the forecast period, due to the critical importance of safety in this sector. Transportation workers, including truck drivers, pilots, and railway operators, are responsible for the safe movement of goods and people across vast distances. Any impairment due to substance use can lead to catastrophic accidents, endangering lives and causing significant financial and legal consequences. Federal regulations, particularly those enforced by the Department of Transportation (DOT), mandate strict drug and alcohol testing protocols for safety-sensitive positions in the transportation industry. These regulations are designed to ensure that all personnel operating vehicles or handling hazardous materials are free from the influence of drugs or alcohol, thereby reducing the risk of accidents and ensuring public safety

Key U.S. Employer And Workplace Drug Testing Company Insights

Key players are undertaking various initiatives to strengthen their market presence and increase the reach of their types and services. Strategies such as expansion activities and partnerships are playing a key role in propelling the market growth. 

Recent Developments

• In June 2024, HireRight completed its acquisition by General Atlantic and Stone Point Capital in a USD 1.7 billion all-cash deal. Following the merger, HireRight’s common stock was delisted from the New York Stock Exchange. HireRight, known for its comprehensive background screening and risk management services, will continue its operations under new ownership.

• In February 2024, First Advantage announced acquiring Sterling Check Corp. for USD 2.2 billion, combining cash and stock. The deal aimed to enhance background screening and identity solutions with increased investment in AI and technology. Expected to close in Q3 2024, the acquisition is projected to deliver USD 50 million in synergies and boost earnings per share.

• In May 2024, Omega Laboratories announced a partnership with Cannabix Technologies Inc. to integrate Cannabix’s advanced THC breathalyzer into Omega’s drug testing services. This collaboration made Omega the exclusive provider of laboratory services for Cannabix, enhancing its drug testing accuracy & efficiency.

U.S. Employer and Workplace Drug Testing Market Report Scope

U.S. Employer And Workplace Drug Testing Market Report Segmentation

This report forecasts revenue growth at the country level and provides an analysis of the latest industry trends in each of the sub-segments from 2018 to 2030. For this study, Grand View Research has segmented the U.S. employer and workplace drug testing market report based on type, product, mode, drug and end-use:

• Type Outlook (Revenue, USD Million, 2018 - 2030)

  • Pre-employment Drug Screens

  • Post-employment

• Product Outlook (Revenue, USD Million, 2018 - 2030)

  • Consumables

  • Instruments

  • Rapid Testing Devices

  • Services

• Mode Outlook (Revenue, USD Million, 2018 - 2030)

  • Urine

  • Hair

  • Oral Fluid

  • Instant Testing

• Drug Outlook (Revenue, USD Million, 2018 - 2030)

  • Alcohol

  • Cannabis/Marijuana

  • Cocaine

  • Opioids

  • Amphetamine & Methamphetamine

  • LSD

  • Others

• End-use Outlook (Revenue, USD Million, 2018 - 2030)

  • IT/Finance

  • Manufacturing

  • Transportation

  • Construction

  • Retail and Hospitality

  • Healthcare

  • Education

  • Other Professional Services