The idea that the NCAA Tournament is responsible for millions of dollars in lost productivity is nothing new. Since 2007, Chicago's Challenger, Gray & Christmas has released an annual report that details the gloomier side of March Madness. But how much will it cost the economy this year? And should college basketball be banned at work?
Putting a dollar amount on it
In its 2014 report, the company says employers "stand to lose at least $1.2 billion for every unproductive work hour during the first week of the tournament." This assumes two things: That 50 million Americans pick their own brackets (a figure estimated by a 2009 Microsoft poll), and that the U.S. average hourly wage, which is just over $24, is representative of college basketball fans.
In reality, this dollar amount could be even higher. According to Challenger, a better estimate of March Madness participation may come from a 2012 MSN survey, which implies 77 million workers spend at least an hour or more on tournament-related activities each year. Assuming hourly wages remain near average, the total estimate of lost productivity rises to $1.9 billion.
Challenger's CEO, John Challenger, notes that because the bulk of the NCAA Tournament's games occur on the first Thursday and Friday, the opening week is "particularly hazardous to workplace productivity." He adds, "While March Madness distractions may not alter the nation's quarterly GDP numbers, you can be assured that department managers and network administrators notice the effect on work output and companywide Internet speeds."
Do offices fight back?
In a recent survey conducted by Braun Research and Modis, one-third of IT professionals said their company took "some action to prepare for March Madness, including banning ... video, throttling video feeds, or simply blocking content altogether." This figure was down by over 40% from a year earlier, though, so it appears offices are fighting back less than they used to. But why?
For one, employees' increased reliance on smartphones makes it easier to circumvent a corporate network to check scores. Even more interestingly, a growing body of research suggests March Madness is a morale booster, and some companies want to give their workers unfettered access to the tournament.
The upside of allowing tourney access
Earlier this month, a new OfficeTeam poll reported that close to a third of senior managers surveyed believe the tournament improves morale, up by more than ten percentage points from a year ago. Perhaps more importantly, the majority of remaining respondents think it has no effect on morale -- only a small minority feels negatively about March Madness in the workplace.
As Forbes' Darren Heitner points out, DISH Network (NASDAQ:DISH) is one company that's not just allowing tourney access, it's encouraging it. A press release reveals it is introducing a concept known as "Bracket Breaks," which allow its employees to use DISH Anywhere to watch games during work hours. "With the prevalence of mobile devices, it is easier to follow along than ever before," said DISH CEO Joseph Clayton. He adds his company is: "embracing the madness, and ... encouraging employees to ... watch games, and show their love for college basketball without having to cover it up."
The bottom line
There's no question that millions of Americans will keep tabs on the NCAA Tournament at work, just as they do every year. And if lost productivity is even a fraction of what Challenger, Gray & Christmas estimates, millions, maybe even billions, are at stake.
But as research from OfficeTeam and Modis suggests, employers may be smart to embrace -- not ban -- March Madness. Many workers will check scores on their phones regardless of corporate policy, and the potential morale boost could be worth it. Some employers certainly think so.
And if any company wants a blueprint for how they can support bracketology, DISH is building a pretty good one. Now if only someone could create a model to predict first round upsets.
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Jake Mann has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.