Guess how much money employers lose during March Madness

March 13, 2015, 10:00 AM UTC

March Madness is upon us, and employers are bracing for the lost productivity that befalls them at this time each year.

Their anxieties appear to be justified. The Chicago outplacement firm Challenger, Gray & Christmas recently issued a press release based in part on Bureau of Labor Statistics data, which puts the effect of the NCAA men’s basketball tournament into stark relief. It found that employers could lose up to $1.9 billion in wages to the more than 60 million Americans who are in the office solely to watch games and devour bandwidth.

In the face of this, an employer’s first instinct may be to eradicate this unsanctioned merriment with the ruthless efficiency of an SS officer. But according to Challenger, Gray & Christmas CEO John Challenger, that is exactly the wrong thing to do.

“When even the president finds time to fill out a bracket, an employer would be hard pressed to come up with a legitimate reason to clamp down on March Madness activities,” he said. “Any attempt to do so would most likely result in long-term damage to employee morale, loyalty and engagement that would far outweigh any short-term benefit to productivity… If anything, employers should embrace March Madness and seek ways to use it as a tool to boost employee morale and engagement.”

At many companies, this is already old news.

“The absenteeism associated with major outbreaks such as avian flu and SARS is less than absenteeism related to major sporting events,” said Dave Weisbeck, Chief Strategy Officer of the Vancouver-based workforce analytics company Visier. “So if you can’t beat them, join them… What you may find is many people stay late to cover their tasks for the day, or that work gets done quicker based on the buzz of a shared experience.”

Brendan Burke, managing director at the Denver, Colorado-based investment banking firm Headwaters MB, agrees wholeheartedly.

“Here are a few things that I know,” he said. “The sun rises in the east, the world is round and on March 19th, American office workers are going to watch hoops from their desks while they pretend to work.”

Burke said that in 2014, his company used the event to their benefit by throwing a party replete with barbecue and beer, and invited members of the local business community to watch the games there.

“We had a great spot to relax, make a few new friends and build some professional relationships without having to pretend to work,” he said. Headwaters has conducted business with such powerhouse clients as Google, Target and Raytheon, so it can afford a little revelry in the office.

But what about startups? Aren’t they more threatened by the loss of productivity than a more established company?

“We’re actually not super worried about employee productivity and March Madness, and I don’t think most other startups are either,” said Isaac Oates, CEO of the New York City tech startup JustWorks. “If my employees watch games during work hours, I don’t really care, as long as they’re still doing the work we expect of them.”

Of course, not every company is on board. Public relations agent JaeMi Pennington represents the Durham, N.C.-based tech company GFI Software, which creates technology for employers who want their workers’ undivided attention from nine to five.

“Many will turn to technology and use software solutions that limit the kinds of websites employees are allowed to visit,” he said. “Others can limit any streaming sites, or limit the amount of bandwidth each employee is allowed to consume.”

But despite representing a company whose bread and butter comes from curbing this behavior, he acknowledged that allowing employees to watch the action in the office has benefits.

“It’s been shown that allowing employees some access during the day does boost productivity by way of a happy worker,” he said. “But of course, there is a fine line, which employers and HR departments will have to determine.”

Want to work at a fun company that lets you watch March Madness? Check out Fortune’s 100 Best Companies to Work For.

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