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March Madness – A win or loss for employers?

March 13, 2014

Employers, brace yourselves—this coming weekend brings the start of March Madness, aka college basketball’s NCAA championship tournament. “Selection Sunday” comes this weekend, and the first round of tournament play begins Tuesday, March 18th.  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.

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., the outplacement company, publishes a regular report on the impact of March Madness to employers.  Last year it estimated that workers distracted by the tournament could cost employers as much as $1.8 billion in unproductive employee time during the first week of the tournament alone based on 20 minutes of time wasted per employee per day.

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 percent 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 percent of managers felt that while they don’t encourage March Madness activities, they were OK with them in moderation. And 11 percent 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 some steam and create some fun team 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.

According to CEO John Challenger, “As the tournament moves beyond the first and second round, the impact on the employer decreases, since fewer games are played during office hours and workers can no longer make adjustments to their brackets, thus eliminating the need to research teams.”

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. Challenger 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.

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