Sequestration Far Worse Than March Madness for Job Numbers

Posted March 13, 2013 by
John Boehner

U.S. House of Representatives Speaker John Boehner

With the first round of the 2013 NCAA Division 1 men’s basketball championship tournament set to tip off next week, the nation’s employers should be readying themselves for the inevitable drop in productivity that coincides.  One new survey found that nearly one-third of workers spend at least three hours per day following the Tournament during work hours.

In the annual “study” hated by working basketball fans everywhere, global outplacement firm Challenger, Gray & Christmas, Inc., estimates that March Madness will cost American companies at least $134 million in “lost wages” over the first two days of the Tournament, as an estimated 3.0 million employees spend one to three hours following the basketball games instead of working.

“At the end of the day, March Madness will not even register as a blip in the overall economy.  Sequestration is going to have a far bigger impact.  Will March Madness even have an effect on a company’s bottom line?  Not at all,” said John A. Challenger, chief executive officer of Challenger, Gray & Christmas.

“But, if you ask department managers and corporate IT managers, March Madness will definitely have an impact on the flow of work, particularly during the first week of the Tournament.  Starting the day after selection Sunday, people will be organizing office pools, researching teams and planning viewing parties.  When the games begin around noon, eastern time, on Thursday, many companies will probably notice a significant drop in Internet speeds, as employees start streaming games and clogging up the network’s bandwidth.”

A survey just released by MSN and Impulse Research found that 66 percent of workers will be following March Madness during work hours, with 20 percent expecting to spend one to two hours following games, 14 percent spending three to four hours, and 16 percent saying they will spend five hours or more watching games instead of working.

In addition to those watching games at their desks, seven percent of survey respondents said they take time off from work to watch the tournament.  Twelve percent of those polled admit to calling in sick in past years in order to watch the games.

But why call in sick when faster internet speeds and portable technology have made it easier and easier to watch the games from one’s desk?  The NCAA, CBS Sports and Turner Sports have partnered once again to offer NCAA March Madness Live, which offers free streaming across all internet-connected devices for all pay-TV subscribers.

According to statistics from Turner Sports cited in a recent Multichannel News report, online March Madness coverage attracted over 220 million visits during the 2012 Tournament.  That is an average of about 2.2 million visitors per day.

The number of online visitors is likely to grow in 2013, as March Madness Live expands its availability to all smartphones and tablets with the Android operating system, in addition to the iPhones and iPads that had access in the past.

Challenger estimates that during work hours online coverage is attracting at least 3.0 million viewers, based on the Tournament averages.  With the latest government statistics indicating that American workers earn $22.38 per hour, if 3.0 million workers spend just one hour watching games instead of working, the cost to employers in lost or unproductive wages comes to $67.1 million.  One hour per day over the first two days of the tournament, when many of the games occur during work hours, the damages come to $134 million.

Each additional hour of wasted time costs a company another $22.38 per hour per worker.  If the MSN survey is any indication, there could be 900,000 online viewers who spending at least three hours watching games online.  That alone will cost employers at least $60.4 million per day.

“The reason none of this will show up in a company’s bottom line is that we live in an era where productivity cannot really be measured by the traditional widgets-produced-per-hour formula.  Today’s workers – particularly those with full-time internet access needed to follow March Madness – don’t produce widgets.  They produce reports, memos, and ideas.  They manage long-term projects and work in teams,” said Challenger.

“Thanks to the same technology that makes watching March Madness from one’s desk possible, today’s workers can work from anywhere at any time.  Many will simply get a little more work done before or after the tournament to make up for any slowdown when games are on during office hours. In the end, March Madness will have little if any impact on employers,” he concluded.

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