Does Drinking Help Your Career?

A new study has stirred up debate about what role socializing plays in the workplace.

Peter Hoy

While many were quick to dismiss the findings of a recent study showing that drinkers make more on average than those that abstain from alcohol, a number of CEOs cite a direct connection between socializing and career advancement.

Regular drinkers make 10% to 14% more money than those who do not drink, according to the study, conducted by the Journal of Labor Research, published quarterly by the Department of Economics at George Mason University, and the Reason Foundation, a Los Angeles-based think tank.

The study also concluded that men who drink socially -- defined as visiting a bar at least once a month -- earn an additional 7% more than those who do not. The same correlation was not found for women, however.

Simply wishful thinking? Perhaps not. CEOs, particularly those running smaller, fast-growing companies, say that social and professional networking is an essential business tool. And while Johnnie Walker and Grey Goose may not actually be career wonder-tonics, the reality is that a significant amount of this networking takes place at company happy hours and other social events involving alcohol.

Edward Stringham, co-author of the study and professor of economics at San Jose State University, concluded that drinking  is a productive activity because it increases social capital -- an economist's way of saying that going out for a beer after work and schmoozing will form useful relationships, both social and professional, that can turn into job opportunities. 

The power of socializing

CEOs say they see merit in the theory. "I would definitely agree with that," said Paal Gisholt, CEO of SmartPak, a 125-employee pet-supply company based in Plymouth, Mass. "The days of command-and-control management are over. Nowadays, influence has everything to do with developing relationships." 

At SmartPak, managers are encouraged to take their employees horseback riding, bowling, or out for the occasional happy hour. The company hosts Halloween parties and a monthly barbeque -- even renting a mechanical bull for one event. 

"Socializing underlies strong selling skills, and in a company like ours, success is tied to your ability to sell," Gisholt said. "Alcohol can induce confidence, and that helps with people skills." 

But there are, of course, drawbacks of emphasizing drinking as a part of company culture.

"It has the potential to be unfair for those who don't drink," Gisholt acknowledged, noting that he saw both positive and negative effects of social drinking at a consulting firm where he worked before founding SmartPak in 1999.

It also doesn't help your career to show up for work with a hangover, not to mention the long-term health risks that alcohol carries. The National Institutes of Health, based in Bethesda, Md., has numerous studies showing the detrimental effects of alcohol on physical and mental health, including correlations between alcohol use and birth defects, neurological disorders, violence, stress, liver disease, and brain disease.

A spokesman at the National Institute on Alcohol Abuse and Alcoholism, which is part of the NIH, said that although the group had not yet reviewed the study, it remained dubious of its claims.

Sense of belonging

Mary Naylor, CEO of VIPdesk, a corporate concierge service, agreed that social networking within her company is vital. "In terms of a sense of belonging and value, it is especially important as your small company grows larger," said Naylor, whose Alexandria, Va.-based firm now has 200 employees.

Naylor maintained, however, that "alcohol has not been a core component of company events," and insisted that positive relationships can be achieved just as easily without it. 

"I'm sure there are many people who will disagree with my hypothesis," Stringham conceded. "But decisions about alcohol are choices individuals have to make, and my study points out some beneficial effects -- economic effects -- that have been largely ignored by other researchers."

Back to All Business: Keeping Your Career on Track

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