Economics

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Bracket Racket: March Madness and the Productivity Drain

11 Feb, 2015

By: Mary Helen Sprecher
With an Estimated $4 Billion Loss in Employee Time, Bracket-Building Makes Facebook Downtime Look Tame

As March Madness creeps ever closer and the names of potential champions are bandied about, there is a time when talk inevitably turns to the business of the NCAA tournament across the nation. Room nights, airfare, concessions, tickets, commercials, restaurant use – the list of beneficiaries can grow exponentially.

But there’s an overlooked demographic in this equation: the negative economic impact of the NCAA tournament. Not to the losing teams or to the schools that missed the bubble: to the employers whose workers spend time online, checking their brackets against those of their friends.

Sigma College of Small Business, Inc. instructor Jamie Gorman notes an article in the Vantage Weekly briefly discussed the impact on the workplace during March Madness, referencing the firm of Challenger, Gray & Christmas who last year estimated the losses in productivity to be between $1.8B and $4.0B – although the exact number was difficult, if not impossible, to predict.

Challenger, Gray & Christmas, by the way, helps with company restructuring, downsizing and executive departures. They know a thing or two about lost productivity. (Previously, the firm published research on how much employees’ fantasy football involvement was costing employers: According to their study, an estimated 18.3 million employees played fantasy football on the job for two hours each week. The firm then multiplied that by the Bureau of Labor Statistic’s $24.45 hourly wage average. The result: $895 million lost each week).

Just as a side note: Yikes.

But back to March Madness. The brackets themselves have become a rite of passage. According to an article in Smithsonian Magazine, over 60 million Americans will fill in a bracket this year.

And don’t think the unlikelihood of having all perfect picks is stopping anyone from guessing. The Smithsonian article notes,

“The odds of it happening are one in 9.2 quintillion: you’re more likely to die an excruciating death by vending machine, become president, win the Mega Millions jackpot or die from incorrectly using products made for right-handed people (if you're a lefty) than fill out a perfect NCAA basketball bracket …(but bracket use persists, and results in) 1 billion dollars potentially spent on off-book gambling.”

The bracket is a social phenomenon, notes the Smithsonian article, which provides a detailed account of the history of the bracket (worth the read, even if just to win some bar bets); these days, the online nature of brackets allows individuals from across town, across the country and across oceans, to organize into leagues and compete with others.

Of course, the number of bracket-happy people is a guess at best, and the numbers can vary, according to fluctuations in the economy at the time the survey was taken. Challenger, Gray and Christmas noted a 2009 Microsoft survey that estimated 50 million Americans would participate in March Madness office pools. The company added, “If each of those 50 million workers spend just one hour of work time filling in their brackets, the cost to employers in terms of wages paid to unproductive workers would be $1.2 billion, based on average hourly earnings of $24.31 reported in the most recent employment report from the U.S. Bureau of Labor Statistics. (50,000,000 X $24.31 = $1,215,500,000).”

And you thought Facebook was a productivity drain.

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