March Madness Productivity Drain: Calling a Technical Foul

Even before the identities of the 65 teams that were invited to the NCAA Men’s Basketball Tournament had been unveiled by the selection committee, another mainstay of the March Madness season was revealed: Challenger, Gray & Christmas‘s annual report on workplace productivity losses during the wildly popular hoops tourney.

Last week, the global outplacement consultancy blasted, in all caps, its ominous prediction: “FIRST WEEK OF TOURNEY COULD COST $1.8 BILLION.”

“For the nation’s employers,” states the Challenger March Madness report, “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.”

The 2010 Challenger estimate is based on a couple of data points and assumptions: Employees will waste 20 minutes a day researching teams online, talking to colleagues about their picks, and watching online and TV broadcasts of the games during work hours. Thursday and Friday (of this week) are the peak time-sucks, when nearly half of the 32 games are tipped off during business hours. (Those viewers on the West Coast can soak up 9-5 worth of hoops action.)

In the report, John Challenger, CEO of the consultancy, offers the data sources and calculations that lead him to arrive at the $1.8 billion figure. And while he acknowledges the fallibility of the math, he’s certain of some degree of business impact.

“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 notes. “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.”

Applauded by some and jeered by others, the Challenger, Gray & Christmas report has, at the very least, become well known: The company has smartly used the attention to garner publicity for its services. It’s the organization’s “One Shining Moment,” so to speak, to reach a majority of people who might not know their consultancy.

And yet the report becomes less and less relevant each year, as telecommuting, social networks and mobile devices take hold, and the work-life balance continues to tip in favor of “work.” Challenger acknowledges the fact himself: Today’s worker works anywhere, anytime—no matter what game is on.

When it comes to worker productivity today, businesses should, in fact, probably be more concerned with application design and user interfaces—are users actually using the expensive corporate software or doing everything to go around it? Survey data shows that apps aren’t doing so hot.

And one can’t ignore companies’ own system downtime—whether that’s an in-house BI app that hasn’t seen 99.9 percent uptime since the first day it went live or a Web-based CRM software suite that suffered a two-hour outage last week.

Just like the No. 1 seeds in the tourney who shouldn’t underestimate No. 16 seeds, managers shouldn’t underestimate the value inherent in team-bonding exercises such as March Madness. Heck, the passionate hoops discussions can even fill those frustrating times when the network goes down again.

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