March Madness will boost office morale, drop productivity, study says

March Madness is only a few days away, and employers can expect worker productivity to plummet once the annual college basketball tournament kicks off, according to outplacement firm Challenger, Gray & Christmas.

In its latest estimate, the firm said it expects companies to lose $1.2 billion for every unproductive work hour during the first week of the tournament.

This estimate is based on a 2009 Microsoft survey that found about 50 million Americans participate in March Madness office pools.

If each of these workers spend just one hour filling out brackets, the outplacement firm said, the cost to companies would be $1.2 billion (based on average hourly earnings of $24.31, according to Bureau of Labor Statistics figures).

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“There are distractions every day at the office, but the first week of the annual men’s college basketball tournament is particularly hazardous to workplace productivity,” said John A. Challenger, the firm’s chief executive. “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 company-wide Internet speeds.”

He warns that employers can expect Internet speeds to slow if workers stream games online on their computers or mobile devices.

Still, despite the loss in productivity, companies shouldn’t take a hard stance and crack down on employees following the tournament. The annual event boosts office morale, Challenger said.

“It is unlikely that a few days of March Madness distraction will impact the company’s bottom line,” he said. “Taking a hard line on office pools and online streaming, on the other hand, could have a dramatic impact on the bottom line if it leads to increased turnover or causes employees to become disengaged, which will only lower both the quantity and quality of work output.”