When internet giant Google uploaded a version of vintage video game Pac-Man on its website this week to celebrate the game’s 30th anniversary, it seemed like a nice little nostalgic gesture.
But business owners and managers aren’t impressed, after a survey found the flood of traffic to the game cost businesses $145 million in lost productivity in the US alone.
Experts says the incident highlights how much time and money businesses are losing by unproductive staff, whether it be through sick days, smoking breaks or Facebook.
The Rescue Times blog conducted a survey to determine how much time was being spent on the game. Using a random sample of about 11,000 users, the site found the average user spent 36 seconds more on Google when the game was uploaded.
By multiplying the increased amount of time by the average hourly rate of $US25, the Rescue Times determined a total of $US120 million, or $AUS145 million, had been lost due to the increased activity on Pac-Man.
“For that same cost, you could hire all 19,835 Google employees, from Larry and Sergey down to their janitors, and get six weeks of their time. Imagine what you could build with that army of man power.”
Experts say it is just one instance of how SMEs are losing money by becoming distracted. Judy Gleeson, who owns the Pragmatix business consultancy firm, says businesses are losing a lot of time and money due to frivolous activities, and more importantly, ignorance regarding technology.
“There are a lot of things that cause lost productivity, but one of them is actually technology. A lot of businesses don’t know how to prioritise even things like email, so you get people looking at messages they don’t really need to look at, they could be deferred to someone else.”
“Just trying to manage your workflow is very challenging. A lot of businesses don’t have policies about who completes certain tasks in the office. Every employee should know what they are doing, and have designated roles.”
Paul Dundon, director of management consultancy firm Direct Health Solutions, says businesses can crack down on productivity through “better management… if you know what each employee is doing and when, and there isn’t much room to move there, then you can crack down on the amount of time lost.”
Apart from Pac-Man, here are five of the biggest productivity drains for SMEs:
Sick leave
Sick days have become a big problem for businesses, especially during the financial crisis. Dundon says a report from his firm shows that more employees during the past 18 months took sick leave due to increased stress levels.
As a result, absence levels in banking, finance and insurance rose from 7.7 days a year to 9.2 days. But overall, the cost of absenteeism is draining between $20-30 billion from the Australian economy each year.
“Businesses can improve productivity by reducing the amount of sick leave given to employees. Sick leave here is about 33% higher than in Britain, because businesses are managing it better.”
“If you have employees taking five out of five sick days a year, there is a fundamental problem there for businesses.”
Smoking
Smoking is also a big problem for productivity, not only in health costs but in the amount of time taken for breaks.
Simon Chapman, professor of public health at the University of Sydney, wrote in the Sydney Morning Herald recently smoking takes up weeks of productivity each year for businesses.
“When you add transit time, smoking a cigarette takes about 10 minutes, so the 5.4 breaks a day adds up to just shy of an hour. Multiply that by 48 weeks a year, five days a week, and you get 216 hours a year – more than five weeks – that smokers get extra ”leave”.”
Drinking
Australia has a large drinking culture, so it’s little wonder hangovers are causing SMEs a headache with their finances. Alcohol abuse alone is costing the economy $5.6 billion per year, according to a recent report from the Federal Department of Health and Ageing.
This lost productivity comes in the form of hangovers, and even early retirement due to drug and alcohol abuse. About 6.6% of workers who over-drink show up to work drunk, nearly 10% actually drink in the workplace, according to the report.
Dundon says stricter standards about consuming alcohol could stamp out this activity and put businesses back on track.
Social networking
Social networking has become an everyday part of life for many Australians, but logging on at work could be costing SMEs more than they realise. A 2007 study from Australian firm SurfControl found businesses are losing about $5 billion per year due to lost productivity, assuming one employee from every business is logging on during the day.
While that survey was taken in 2007 and accounted for about 800,000 Facebook members, that number has soared with about six million Australians logging on to the site.
Dundon says this needs to be controlled with strict policies enforcing when and where employees can use social networking.
“There certainly needs to be strict access to social networking enforced. Introducing things like kiosks for people on their breaks can keep them engaged on the job, but also reward them with some social networking time.”
Ignorance
While Gleeson says there isn’t a monetary value that can be attributed to lost productivity through ignorance in technology, she says it’s a huge problem.
“You have people who don’t know how to prioritise their email or how to work certain technologies, and instead of putting some time to work they are sorting through their emails and deciding which ones to answer.”
“It isn’t just email there, if you are a business using technology there are people trying to manage their work and won’t necessarily know how to use it. Often there is no training, so it’s important for businesses to spend some time getting it all right.”
Late arrivals
A recent report from the Australia and New Zealand Journal of Psychiatry found businesses are losing billions in productivity each year, due to employees actually showing up to work.
The trend is known as “presenteeism”, and occurs when employees who should be resting at home choose to attend work, but have their effectiveness reduced due to some type of illness.
The study, which monitored 60,000 full-time employees for physical and mental health conditions, found mental health problems such as anxiety and depression were the largest contributors to productivity loss, and evaporated the equivalent of $5.9 billion in productivity.
The report stated employees respond well to early face-to-face or telephone counselling and can get back to work. As a result, businesses shouldn’t be afraid to send employees home when they are truly unwell, so they can come back rested and ready to work again instead of trudging through a normal working day with reduced effectiveness.
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
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