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Are Companies Losing Productivity by Forcing Employees to Move from the Internet to Smart Phones?

This past fall (2010) I was contacted by a small, but fast growing company to evaluate their e-commerce platform and provide my two cents on where it stands and what needs to be done to get it to where it needs to be.

During the course of my evaluation, I wanted to get an idea of employee productivity since the initial high level review gave me a feeling that productivity was quite low.  My initial hunch was either speed of systems or bottlenecks in the tactical execution process.

So I requested a bunch of reports from the company’s IT department that showed internet usage by employees.  Wallah, employees were spending over half their day browsing websites unrelated to their job functions, product and industry. Wow.

Moving along, I ended up with a recommendation completely different from what I was paid for.  I didn’t charge them for this, as they were already getting royally screwed by relatively high paid employees who weren’t producing up to their potential.

I mean sure, the e-commerce platform and strategy needed heavy overhaul, but nonetheless, employees could’ve produced more doing whatever it is that they are tasked to do.

Billions of Dollars are Lost Each Year Due to Lost Employee Productivity

In case you didn’t know, US companies (and probably global ones too) lose billions of dollars each year because of lost employee productivity resulting from excessive web browsing.

Reports are release every year right after playoff season for all major sports, particularly football, that show significant declines in employee output.  How they measure the statistics is beyond the scope of this discussion, but suffice it to say that this is a growing trend and one that has a painful impact on corporate bottom lines.

Lost productivity is usually at its peak during March Madness, the final tournament where 64 college teams participate and which determines the annual college basketball champion.  Given that the Soccer world cup was held 2010, employee output took another heavy hit up the chin.

With employees distracted keeping up with live scores on ESPN, or running to the break room every 15 minutes to catch a glimpse of the game, it is a given that very little work gets done.  Depending on the boss (whether they are into sports or not), this behavior may even be encouraged as the boss is often found leading the way.

The Proposed Fix & Results

Lost dollars are one thing, but there are also significant risks involved in excessive internet usage by employees, especially if allowed to visit social networking websites or other similar web 2.0 sites where information can be shared and broadcasted.  Usage of personal email can also risk information leaking out of the company.

The proposed fix to the problem was to implement a Websense software that tracks and monitors internet usage.  The software also allows companies to block off certain websites. Sounds well and good.  The company purchased and implemented the solution in July and we monitored performance through October.

I recently received the reports and to my shocking surprise I saw that productivity wasn’t impacted at all. In fact, it declined by an immaterial amount.  WHY?

The Culprit

Enter the culprit – Smart Phones! Everyone and their dog has an iPhone or an Android phone.  We were all perplexed and after hours of discussion, an interesting point was made around the usage of personal cell phones.

An individual on the call mentioned that in a tech savvy department with tech savvy employees, almost everyone had an iPhone of their own. The individual also mentioned that she often sees people on their iPhone behind their desks.

Even though we could not prove out the “theory”, a light bulb went off in my mind that sold me on to the rationale.  I cannot agree more with this individual.  Let’s think about this for a minute.

Smart phones are no doubt smart, but often slower compared to a super high speed fiber optics land connection internet hooked up to work computers.  They are smaller and therefore take more focus scrolling and navigating.  There is lost concentration from moving away from the computer screen to looking down to the lap while one plays with their smart phone.

It all certainly makes sense.  You take people away from computers. So what do they do? They just move to their smart phones. Employees are still checking scores, participating in fantasy football or baseball, running side businesses or browsing porn for all you know.

So how do you combat that?

What to Do?

Do you fire employees who were flagged as excessive internet users based on the reports we reviewed? Probably not. The new ones you bring in will likely do the same a few months into their employment.

The implementation of the Websense software was a good measure to prevent the behavior.  But as a business leader how will you prevent internet usage on personal phones?

Do you implement a corporate policy that doesn’t allow personal cell phones? Do you provide lockers at work for employees to lock their phones in prior to starting their day, and then bum rushing the lockers during lunch break?  Why not? Responsible call centers do it all the time to prevent information leakage.

How do you monitor internet usage on personal smart phones? Can you at all given the legalities around personal privacy of information or invasion thereof?

Are You a Business Leader Struggling Facing this Predicament?

Not sure how to console you at this point if you are a leader who is struggling with this issue.  One guy told me he will implement surveillance cameras everywhere to monitor people.  I told him you will end up seeing more bathroom breaks as a result and all stalls occupied for extended period of times (I feel bad for those who actually have to answer the real call of nature).

It’s a joking matter, but also a very serious one with real large-scale financial impact.  You can either accept it, or lose mind trying to fix it.

Personally, I say you hire, manage and evaluate based on deliverables and expectations.  That is why I’ve never been a fan of the hourly wage concept.  Just like retailers always factor in a percentage for shrinkage (damaged, lost and stolen goods), accept the fact that there will be lost productivity due to internet usage.

Do you have a better recommendation?  How big is this issue? Is it at all?  What are your overall thoughts?


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4 Responses to “Are Companies Losing Productivity by Forcing Employees to Move from the Internet to Smart Phones?”

  1. Our internet is blocked at work and almost all of us have a smart phone. WE are all using it between patients… some are able to use it while they are scanning patients. They should unblock the internet… definitely make us more productive.

    • Sunil says:

      wow you don’t hear that much, even at mammoth banks like Bank of America, where certain sites are blocked but not the entire Internet. what part of the medical profession are you in? can there be other implications to having phones near the equipment/scan machines that you use?

  2. Good point! Perhaps companies will have to ban personal cell phone from work in the future.

    This sounds harsh, but with call forwarding it’s not as bad as it sounds… That way you limit calls to just real calls instead of internet activity.

    That said, I hope that doesn’t happen :)

  3. Sunil says:

    hmm I hadn’t thought about that, but it sure is a good idea. can’t imagine though how it would be like going without internet for 8+ hours in the digital world that we live in today

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