High workplace
cost of March Madness
Figure a $1.8 billion in diminished productivity
By Diego Vasquez
Mar 16, 2010
If you're surreptitiously filling out your March Madness bracket while you should be doing something else at work, you're not alone. This year's NCAA men's basketball tournament will cost U.S. companies $1.8 billion in productivity, according to a study by Chicago outplacement consultancy Challenger, Gray & Christmas. One major culprit will be March Madness on Demand, CBS's online streaming video player that carries every game, including the first-round games that tip off just after noon on Thursday and Friday, right in the heart of the work day. That sucks employees' attention away from their work, but it also costs employers by sucking up bandwidth, too, slowing down office-wide email and internet surfing. NCAA fans also waste time filling out brackets, going online to see how their teams did, and even calling in sick when they absolutely must watch a game. Short of unplugging the web or monitoring employees on a minute-by-minute basis, there's little companies can do to combat this time drain. In fact, John Challenger, chief executive officer at Challenger, Gray & Christmas, says companies would be wise to embrace it. He talks to Media Life about how he arrived at the $1.8 billion mark, why March Madness poses such a threat to productivity, and how the tourney can actually lift office morale.
How did you come up with the $1.8 billion figure?
We looked at the percentage of people who watched the games or got involved in a pool in 2009. An MSN survey found that 45 percent of Americans planned to enter at least one college basketball pool last year.
So assuming that many participate this year, we took a look at the total workforce, and that’s about 130 million people. So that would suggest 58.3 million will participate in a pool this year.
The average worker, according to the government, makes $18.70 per hour. And that amounts to $6.23 every 20 minutes.
If workers just for the first week of the tournament are unproductive for 20 minutes a day, that amounts to $363.2 million in lost productivity each day. Of the five work days that the tournament takes place, that then works out to the $1.8 billion.
Is that figure higher or lower than in past years? Why?
It’s higher. More people are involved.
And we do think that as the tournament moves beyond the first and second round, the impact on employers decreases, because fewer games are played during office hours.
Is there any other national event that impacts worker productivity like this, or is March Madness unique because it plays out over so many weeks?
And because it takes place during the workday. And because of the pools, it’s particularly unique.
The Olympics took place over a couple weeks, and many events during the work day, and that would be the only event that rivals this. But that takes place every four years and there are no pools for it.
I think the pools are the secret sauce that makes the NCAA tournament a workplace event and really the quintessential sports event of this era, as opposed to the Super Bowl or the World Series in previous eras. It’s an event that’s part of the internet generation, because you can go online so easily and stream games on your computer.
Last year March Madness on Demand attracted 7.52 million unique visitors, and that was up 75 percent from the year before (4.92 million). And according to Nielsen, 92 percent of fans who watched games online during the 2008 tournament did so from work computers.
Are there any business more likely to be impacted than others -- blue collar versus white collar, for instance?
Well, I do think businesses where people have access to computers are going to be more distracted.
But also people take long lunch breaks during the day, they may watch the games late at night and may come in later the next day—there’s all kinds of fun ways to look at it.
And now they’re thinking of expanding the tournament to 96 teams. That could make it worse—or better [laughs].
How much of an impact has March Madness on Demand had on the drain of workplace resources? Has it increase over the past few years as people became more familiar with the offering?
It has, there’s more use of it online. That 75 percent jump in streaming webcast visits is an indication of that.
What’s also interesting is another side effect is a lot of companies don’t have the capacity to handle all the web streaming, so come companies’ internet will get slow and bogged down from all the people using up bandwidth. So then people have problems checking email, etc.
Why don't more offices block access to such sites?
The Society for Human Resource Management found that two-thirds of employers don’t have policies regarding office pools, fantasy sports leagues or gambling in the workplace. And most do not block access to streaming video sites.
I think most employers, either consciously or unconsciously, realize they’ve got this marvelous way to build employee engagement and morale. It’s fallen in their laps. And it’s costly, the numbers show.
Today, the workplace and companies are filled with people who don’t know each other. People are much more isolated because of technology, telecommuting, there are more temp workers these days—people just don’t know each other as well as they used to. So when companies have a time when people can come together, that’s good for morale and engagement, good for building trust.
So I think the reason that they don’t block it is, while there are some that really feel gambling is wrong morally, and it can be risky to their business, generally companies recognize that they need to look for ways to bring their people together.
How can workplaces use March Madness to their advantage -- fostering more camaraderie or good feelings during this brutal economic downturn?
What’s so great about it is everybody has a team they can root for. It brings together people in your local operations all over the country to root for the local team. People from other areas of the country can talk about where they grew up, what school they went to, people can talk about their identity some.
For example, you might just have a day when everyone gets to wear a team shirt from where they came from or their favorite school. Or a hat or something like that.
If you don’t want the computers clogged up, maybe turn the TVs in the lunch room to the NCAAs for people who are on lunch or on break.
Do you have an office pool going at work?
We do. We’re all trying to become bracketologists right now. What’s also good about it is all the people who aren’t sports nuts or basketball junkies can get into it, it brings everyone in.
Who do you have winning the tourney?
Right now I’m going with Kansas. It’s hard not to.
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