March Madness - Small Business Association of Michigan



March Madness

March Madness

By Kristen Cifolelli, courtesy of SBAM Approved Partner ASE

Employers, brace yourselves—this week brings the first games of the 2018 edition of March Madness, aka college basketball’s NCAA championship tournament. 

Human Resource professionals can expect to receive the usual calls from managers concerned about lost productivity, employee-organized betting pools and a slow Internet due to the games being watched during work hours. Keep in mind that there will be a total of 32 games played this Thursday and Friday, and by unofficial count half of them will take place at least partly during the regular workday. The other 16 will be played in the evenings, affecting workers on the traditional afternoon shift. 

So what is the NCAA tournament to employers—a cost due to lost productivity? Or a chance to build engagement and morale?

Challenger, Gray & Christmas, Inc., has researched the impact of March Madness to employers. It  estimates workers distracted by the tournament could cost employers as much as $2.3 billion in unproductive employee time during the first week of the tournament alone based on 20 minutes of time wasted per employee per day. More than 40 million Americans fill out tournament brackets, according to the American Gaming Association. Applying the current employment-to-population ratio to that figure indicates that 23.7 million workers will fill out brackets for this year’s games.

As the tournament moves into its second and third weeks, more teams are eliminated and thus less employee time lost to its distractions. It is the first week of the tournament that is most costly.

Some employers have responded to this issue by working with their IT departments to block, ban or slow down the ability of employees to stream the games over the Internet. A 2013 report by OfficeTeam found that 32% of managers felt that March Madness activities shouldn’t be allowed at work, and one in five employees report being distracted at work. 

On the other hand, that same survey also showed that 57% of managers felt that while they don’t encourage March Madness activities, they were OK with them in moderation. And 11% indicated that they are a welcome diversion.  Many employers use the event as a time to promote employee morale by showing the games in conference rooms and allowing employees to periodically take breaks to check the score and watch the game. It can be a great way to blow off steam and create fun rivalries.  Other fun morale builders can include encouraging employees to decorate their offices/cubes in team memorabilia or come wearing their favorite team jersey to work.

The blurring of lines between work and home is another reason that employers, in fairness, should not be as concerned if there are periodic dips in productivity.  Many employees have the ability to work remotely, and they will finish tasks at home that they didn’t get done in the office. John Challenger, CEO of Challenger, Gray and Christmas, also indicated, “Many will simply get a little more work done before or after the tournament to make up for any slowdown when games are on during office hours.  In the end, March Madness will have little if any impact on employers.” 

In the state of Michigan, any betting of money in an office pool is technically illegal, and allowing others to organize or participate in such pools on your property is also illegal.  Employers should be aware that they may be opening themselves up to legal liability if gambling on March Madness activities takes place in the workplace.  Realistically, we all know that it is difficult for law enforcement agencies to monitor these sorts of activities. Still, at a minimum organizations should make sure that their managers or supervisors do not organize betting pools, since that could create the an impression that the employer is actually sponsoring the activity. 

Regardless of whether employers support or prohibit March Madness activities, they should have policies in place prior to the start of the tournament detailing ground rules around streaming the games over the Internet, and gambling in the office in general.

Updated 2018 numbers sourced by SBAM from Challenger, Gray & Christmas, Inc.