March Madness could cost employers, but should they discourage workers from wasting time?
EMPLOYERS BRACE FOR SNOWMAGGEDON!
As Chicago braces for a winter storm that is expected to drop 18 inches of snow amid 40- mile-per-hour winds, companies across the region are scrambling to prepare for a massive hit to productivity. The impact could stretch beyond Chicago, as business flights are cancelled and the storm moves eastward. By week’s end, the National Weather Service estimates that 100 million people across the country will be affected by the storm. In Illinois alone there are more than 5.5 million workers, including about 2.0 million in the Chicago metropolitan area. In conversations with senior human resource executives, Challenger researchers learned that as early as Monday several employers were making contingency plans for possible office closures, including preparing workers for telecommuting, arranging early returns for out-of-town business travelers, and notifying customers and business partners of the possible disruption. What can employers learn from recent weather events that hobbled New York and other cities recently? What can employees and employers do to prepare for weather-related disruptions? Will there be any lasting impact on the overall economy from weather-related disruptions to business?
…MEANWHILE, ANOTHER PRODUCTIVITY STORM IS BREWING
Another potential productivity-sapping storm is approaching the nation’s employers. This one is not weather-related, however. It’s the potential loss of productivity resulting from an upcoming string of sporting events that distract workers year after year. It starts this Sunday with the Super Bowl. While the productivity experts at Challenger, Gray & Christmas do not foresee a significant drain in productivity leading up to the big game, there is the risk that the Monday following the game could see a conspicuous increase in unplanned absences as employees who partied a little too hard on Super Bowl Sunday fail to recover for work. Another hit to productivity could come in March with the tip-off for the men’s college basketball national championship tournament (a.k.a., March Madness). The tournament’s opening round begins during the workday on Thursday, March 17, and is conveniently broadcast over the internet for workers across the country to enjoy. In April, golf fans (of which there are many in corporate America) can stream live coverage of the Master’s golf tournament on their work computers. Is there anything companies can do minimize the impact of these sports-related productivity sappers? How do various sporting events compare when it comes to the productivity-draining potential? Are companies advised to ignore, embrace or squash the problem?
Fantasy Football Is Not Killing the Economy
With three weeks of the NFL season in the books, the big question is whether fantasy football leagues are sapping the nation’s workplace productivity. According to human resource professionals from around the country, the answer is a resounding NO.
In a survey by global outplacement consultancy Challenger, Gray & Christmas, Inc., the majority of respondents said fantasy football had little to no impact on productivity. Ranking the level of distraction on a scale of 1 to 10, with 1 being no noticeable impact, nearly 70 percent said four or lower. Less than eight percent of respondents said the level of distraction rated a 7 or 8 and none of the respondents felt the phenomenon deserved a 9 or 10.
“Other surveys show that people are indeed managing their fantasy teams from work. However, what we are hearing from the human resources community is that this is not at all affecting the level of output workers are expected to deliver,” said John A. Challenger, chief executive officer of Challenger, Gray & Christmas.
The Challenger survey found that about one in five employers block access to sports and fantasy football websites. However, many simply look the other way with nearly half (46.2 percent) saying they do not care if employees spend part of their workday on fantasy football, as long as the quality and quantity of output does not decline. About 22 percent said they merely ask workers to limit fantasy football and other personal activities to lunch and other break times.
“It is difficult for companies to take a hard-line stance against fantasy football. The internet technology that helped fuel the rapid growth of fantasy football participation and makes it possible to manage teams from one’s desk also makes it possible for employees to attend to work duties during their personal time,” said Challenger.
Fantasy football is becoming so popular it may be difficult for employers to stop it, even if they wanted to. A 2008 study by the Fantasy Sports Trade Association estimated that 27.1 million Americans participate in fantasy sports, with 75 percent of those or roughly 20.3 million playing fantasy football. That was up from 17 million fantasy sports participants and 13.6 million fantasy football players estimated by the Association just a couple of years prior.
Meanwhile, other studies from the Fantasy Sports Trade Association indicate that fantasy sports participants spend about three to four hours on the Internet per week, with nearly 1.2 hours of that time at the office.
“Managers should only crack down on those whose work is clearly suffering from the added distraction. An across-the-board ban on all fantasy football or sports websites could backfire in the form of reduced morale and loyalty. The result could be far worse than the loss of productivity caused by 10 to 20 minutes of team management each day,” said Challenger.
“Companies that not only allow workers to indulge in fantasy football, but actually encourage it by organizing a company leagues are likely to see significant benefits in morale as well as productivity,” Challenger said. “In the long run, this may lead to increased employee retention.”
A 2006 Ipsos Survey, 40 percent of respondents said fantasy sports participation was a positive influence in the workplace. Another 40 percent said it increases camaraderie among employees. One in five said their involvement in fantasy sports enabled them to make a valuable business contact.
Despite these impressive figures, less than eight percent of the Challenger survey participants said their companies “embrace” fantasy football participation as a morale-boosting activity and none of the employers represented officially organized leagues.
The Challenger survey was conducted online among approximately 100 respondents from the end of August through late-September. Interestingly, about 65 percent of those polled said they participate in fantasy football leagues, either with co-workers, friends outside of work or both.
2010 FANTASY FOOTBALL SURVEY
On a scale of 1 to 10, please rate the level of distraction or impact on the workplace productivity resulting from employee participation in fantasy football leagues.
(1 being no noticeable impact at all and 10 being an obvious or measurable impact)
Average Rating: 3.42
Does your company take any steps to discourage employees from partaking in fantasy football activities at the office?
No, we don’t care, as long as the quality of worker output does not decline. 46.2%
We block access to sports and fantasy football websites. 24.0%
We ask that they limit such activities to lunch or other breaks. 22.1%
No. In fact, we embrace fantasy football as a morale-boosting activity. 7.7%
We prohibit use of company computers for personal activities. 0
Does your company formally organize a fantasy football league for workers?
No, but I am aware of one or more employee-organized leagues. 65.4%
No, we see fantasy football as a distraction. 30.8%
No, but we don’t discourage it. 3.8%
We leave it up to department heads. 0
Do you participate in a fantasy football league, either with co-workers or friends outside of work?
Yes, with friends 38.5%
I do not participate in a fantasy football league 34.6%
Yes, with both co-workers and friends 19.2%
Yes, with co-workers 7.7%
Source: Challenger, Gray & Christmas, Inc.©
Employers around the globe may be preparing for a month of lower-than-normal productivity, as the world’s most popular sport prepares to kick off the 2010 World Cup. The impact on workplaces in United States is expected to be less dramatic, even as soccer continues to grow in popularity here, according to global outplacement consultancy Challenger, Gray & Christmas, Inc.
“Soccer simply has not caught on with the majority of American sports fans. However, the World Cup is a unique event and could attract a lot of viewers who might not typically go out of the way to watch a match. Even as the sport grows in popularity, though, it will have far less of an impact on workplace productivity than the March Madness basketball tournament, for example,” said John A. Challenger, chief executive officer of Challenger, Gray & Christmas.
The Challenger firm generated a non-scientific, non-binding ranking of the sporting events that have the most potential to affect workplace productivity.
TOP PRODUCTIVITY-SAPPING SPORTS EVENTS
NCAA Men’s Basketball Tournament (AKA, March Madness) – Widespread office tournament pools and the fact that about half of the first 32 games are played during work hours (and streamed live on CBS Sports March Madness on Demand) make this the granddaddy of productivity sappers. Proof of the event’s impact on productivity: the “Boss Button,” which instantly hides the webcast behind a fake spreadsheet, was hit 3.3 million times during the 2010 Tournament.
NFL Fantasy Football – Millions of fantasy football participants manage their teams from their office, whether it’s preparing for the fantasy draft or initiating a four-way trade. The time devoted to such transactions each week may seem minor, but over the 17-week course of the season, the hit to productivity can add up.
The Super Bowl – While the game is not played during traditional work hours (unless you work at one of the millions of sports bars broadcasting the game), the impact on the workplace comes the following day, when many Super Bowl revelers find this particular Monday especially difficult to manage. Some Super fans have even started a campaign to make the post-Super Bowl Monday a national work holiday.
World Cup Soccer – While soccer has not taken off in the U.S., this still makes the list for the impact it has on workplace productivity worldwide. Some companies in Europe and South America may even shut down on the day of a big match.
College Football Bowl Season – Bowl games start in mid-December and many die-hard college football fans attempt to watch every game. Some of these games are played during the day, while others go late into the evening. The impact on workplace productivity is less severe, however, due to the fact that the period around the holidays is typically slower than normal.
Baseball Playoffs and World Series – Games are mostly played in the evening, but often stretch into the wee hours due to the natural pace of the game and the tendency for competitive match-ups to extend into extra innings. Groggy fans, particularly in cities with playoff/World Series teams, may be less productive the day after these prolonged games.
NHL Playoffs/Stanley Cup Finals – Professional hockey playoffs last almost two months. For cities with teams playing, this can create considerable distractions as fans critique their team’s performance and plan post-game celebrations.
NBA Playoffs/Finals – Much like with baseball and hockey, productivity is mostly killed in cities with competing teams. The biggest threat comes from late night game-watching on work nights.
The Olympics – Since there are four years between winter Olympics and summer Olympics, these events tend to attract a lot of viewers. While most people get their fill through prime-time coverage, faster Internet connections are making it possible to watch live streaming of events from one’s desk.
Apple Product Announcements – While this technically is not a sporting event, these announcements feature almost as much pre-event hype and watercooler speculation about what will transpire, particularly among members of the IT staff. Most events, which occur in the middle of the workday, are covered via live blogging, so those who cannot wait for news reports after the fact are able to be among the first to learn about Apple’s latest creation or product update.
It is March once again, and like the swallows returning to Capistrano, basketball fans across the country will return to their favorite sports websites to research every one of the 64 teams playing in the NCAA men’s basketball championship tournament, fill out tournament brackets and enter one or more betting pools in what has become an annual rite of spring as sacred as green beer on St. Patrick’s Day.
For the nation’s employers, the men’s college basketball tournament, better known as March Madness, marks the arrival of several other annual rituals: employee-organized office pools, a potential dip in productivity and a marked decline in Internet speed, as workers soak up bandwidth watching live streaming broadcasts of the tournament games during office hours.
“March Madness and the subsequent office pools have been going on long enough, that employers can no longer claim to be caught off guard by the annual event. Some have tried to squash these pools, most simply ignore them and others have found ways to embrace the tournament as a team-building and morale-boosting opportunity,” said John Challenger, chief executive officer of Challenger, Gray & Christmas, Inc., the global outplacement consultancy that each year attempts to predict the tournament’s impact on workplace productivity.
This year, armed with an assortment of statistics from various sources, the firm estimates that workers distracted by March Madness could cost employers as much as $1.8 billion in unproductive wages during the first week of the tournament, alone, based on 20 minutes of daily time wasting.
“Keep in mind that it is nearly impossible to gauge the impact of March Madness on productivity in an information-based economy where workers possess portable technology that allows them to work from anywhere and any time. This estimate is probably about as accurate as the point spreads computed by Las Vegas bookmakers,” Challenger acknowledged.
The Challenger estimate is based on the number of people expected to participate in office pools, the amount of money they earn and the amount of work-time wasted on March Madness related activities, whether it is trash talking at the water cooler or watching live videos of the games during business hours.
A 2009 Microsoft/MSN survey found that 45 percent of Americans planned to enter at least one college basketball pool last year. Assuming that at least that many plan to participate in pools this year, Challenger applied that percentage to total payroll employment in February (129,526,000) to approximate that as many as 58.3 million workers could participate in office pools this year (45% of the total non-farm workforce).
According to the latest available data on average weekly earnings from the Bureau of Labor Statistics, these workers earn $748 per week or about $18.70 per hour (based on 40-hour work week). That breaks down further to earnings of about $6.23 every 20 minutes.
So, among the 58.3 million office pool participants, every 20 minutes of unproductive work time costs employers roughly $363.2 million (58.2 million X $6.23). It is conceivable that workers participating in pools could waste an average of at least 20 minutes per day the week between Selection Sunday (March 14) and the end of the first round (March 19), when March Madness-related activity is at its height as people research teams, put together their brackets and watch games online during work hours.
“By the end of that first week, employers across the country may pay unproductive workers a total of $1.8 billion,” said Challenger, multiplying the $363.2 million by five.
“As the tournament moves beyond the first and second round, the impact on the employer decreases, since few games are played during office hours and workers can no longer make adjustments to their brackets, thus eliminating the need to research teams,” Challenger added.
“Those who insist there will be no impact are kidding themselves. It might be a slight drop in output or it could be slow internet connections as bandwidth is sapped by employees watching streaming feeds of the games.”
During the first two days of the Tournament (Thursday, March 18 and Friday, March 19), approximately half of the 32 games are played during business hours. Fans on the west coast may be able to begin watching games as early as 9:00 AM.
CBS Sports and the NCAA teamed up a few years ago to begin offering March Madness on Demand web streaming service, which provides streaming webcasts of every game in every round of the tournament. Last year, it attracted 7.52 million unique visitors, up 75 percent from 4.92 million in 2008. According to Nielson web ratings data, 92 percent of fans who watched games online during the 2008 March Madness tournament did so from work computers.
Despite the potential impact, most companies see no reason to establish special March Madness policies. Two-thirds of employers do not have policies regarding office pools, fantasy sports leagues, or gambling in the workplace, according to a 2010 survey by the Society for Human Resource Management (SHRM). And, the majority of employers still do not block access to all video streaming sites.
“In the end, employers may or may not see a significant impact. Even if they do, few are compelled to go out of their way to ban March Madness related activities. Especially in this economy, when many employees are already anxious about their jobs, there is no reason for employers to make a big deal about what amounts to a blip on the productivity radar,” said Challenger.
“In fact, with worker stress and anxiety heightened, a little distraction could be just what the doctor ordered. The key for companies is finding a way to maximize the positive aspects of March Madness so that they outweigh any potential negatives,” Challenger noted.
“Companies can use this event as a way to build morale and camaraderie. This could mean putting televisions in the break room, so employees have somewhere to watch the games other than the Internet. Employers might consider organizing a company-wide pool, which should have no entry fee in order to avoid ethical and/or legal questions,” Challenger suggested.