March Madness could cost employers as much as $3.8 billion in lost wages this year, according to an estimate by Challenger, Gray & Christmas, Inc., an outplacement consultancy.
The college basketball tournament could have a bigger effect on the economy this year because CBS Sports has decided to broadcast the games over the Internet for free. In the past, CBS charged for the service.
The firm estimates $237 million in wages would be lost if workers spend just 13.5 minutes on basketball sites during the tournament but says that many workers will be spending even more time following the tournament.
"If we estimate conservatively that fans will spend 13.5 minutes online each day, beginning March 13 and continuing through the championship game on Monday, April 3, that is 16 business days," says John A. Challenger, chief executive officer of the firm. "The total hit to employers' bottom lines could amount to $3.8 billion. The cost may end up being much higher, since it will now be possible to watch entire games on the Internet."
Challenger suggested that while employers should take steps to limit abuse of company resources, employers may want to consider creating their own pools as a way to boost morale and eliminate the gambling aspect that accompanies the tournament.
"Companies may want to expand their Internet blockers to include college basketball sites and they may want to encourage workers to refrain from watching entire games at their desks," Challenger says. "However, there is no reason a company cannot institute a companywide pool, which employees can enter for free and winners receive some type of gift, such as an extra day off or a restaurant gift certificate."
He also suggested that employers offer flexible schedules, so employees can arrive early and leave in time for the games.