Despite the $1.2 billion in so-called lost productivity that some experts predict, a growing number of companies are using the NCAA tournament to help boost morale.
At companies across the nation, the annual arrival of the NCAA men's basketball tournament brings office pools, water-cooler debate, even sneaking out to the local sports bar. Indeed, for employers, March Madness might better be described as office madness.
And since time is money, the tournament, which runs from March 13 to April 2, is expected to cost employers up to $1.2 billion in lost productivity this year, according to a survey by Challenger, Grey & Christmas, a Chicago-based employment consulting firm. Throughout the tournament, employees spend an average of 13.5 minutes on various college basketball Web sites, roughly the equivalent of $3.78 in average hourly wages, the survey reported. Over the nearly three weeks of the tournament, that adds up.
All that time, at least from the boss's perspective, may seem like a waste. Which is perhaps why many business owners and managers are choosing not to crack down, but instead embrace the games as a way of boosting employee morale and strengthening their esprit du corps.
"I see it as a way to stimulate conversation," says Tom Baehr, senior vice president of sales and services at DataSynapse, a New York-based software firm. "Last year, we embraced fantasy football, and that was fun. I see these events as a good way to engage employees and build camaraderie."
Baehr says he has little concern about the nearly month-long event impeding productivity. Instead, he finds that employees adjust their schedules to accommodate both work and play.
"We've got people supporting families, paying mortgages, and if our salespeople aren't making numbers, they're not making commissions," Baehr says. "So, it hasn't been an issue here."
For employers trying to maintain order and keep distraction to a minimum, technology is making the task both easier and harder. Sure, in years past, employees spent time participating in office pools and recapping the previous night's game at the water cooler. But the growing sophistication of online video now allows fans to watch the first three rounds -- dozens of games, which just happen to come during the workday and generally feature the most exciting upsets -- right from their cubicles.
Similar advances in technology, however, now allow companies to better monitor and block their employees' Web usage.
This is just the second year that CBS Sportsline is offering live streaming video of tournament games, and as the technology gets better, more fans are tuning in. Despite complaints over choppy video, the service attracted as many as 1.3 million viewers last year. More than 400,000 viewers have already pre-registered for the feeds, more than twice as many as last year at this time, according to a CBS Sports spokeswoman. In response, the network is doubling the amount of bandwidth for its website this year, while limiting each video to 300,000 simultaneous viewers at any given time -- up from 175,000 viewers last year -- to keep the feeds running smoothly.
For its part, Challenger is estimating that more than 22 million workers will spend time on March Madness-related sites during this year's tournament.
Still, a handful of employers are determined to fight back. At least 6 percent of the companies surveyed by Challenger said they are planning measures to curb lost productivity during the tournament.
How are employers fighting back? Andrew Forsdick, president of Addison Capital Advisors, a Memphis, Tenn.-based venture capital firm, recently installed an application that tracks websites visited by every employee. Forsdick, a basketball fan himself, said he doesn't mind employees checking scores now and then. The presence of The Box, manufactured by Strategic Net Monitoring, simply reminds them to keep their viewing to a minimum during working hours, he said.
Then there's the Metron. Apart from keeping employees from watching too much basketball on company time, the Metron, manufactured by Annapolis-based eTelemetry, can help prevent an overload in bandwidth on network servers caused by too many office workers downloading streaming videos, says eTelemetry CEO Ermis Sfakiyanudis.
Most employers who have purchased the Metron cited employees watching sporting events as one of their chief concerns, Sfakiyanudis says.
Despite the proliferation of such products, many companies have found it easier to employ a "can't beat 'em, join 'em" philosophy. At Fall River, Mass.-based Stirrings, which produces and sells cocktail mixers, March Madness provides a great excuse to demo the company's wares, says marketing director Kristine Ford.
"We'll be having parties with different color cocktails to represent the teams we're rooting for," Ford says.