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The New York Post ran a piece this week entitled, “Lost $650B turning businesses anti-social.”  In it, they describe how businesses are fighting to recapture $650 billion in lost productivity from U.S. employees using social media.  They didn’t cite a reference and I was curious to understand where that figure came from.

It turns out that the number itself has some dubious history (which I explain later).  It implies that social media productivity loss costs employers the equivalent of 4.3% of the U.S. Gross Domestic Product.  I think it’s illustrative to question the concept of “lost productivity” and what that tells us about the perception of social media in a corporate environment.

$650 Billion debunked (somewhat)

Best I can tell, the $650 billion dollar figure can be attributed to a 2008 study by Basex that concluded that technological interruptions (not just social media) were costing U.S. employers that amount every year.  The premise of that calculation is that workers would be engaged in a profit generating activity during the time that they were using email or social media, an assumption that is irrefutably false.  It seems that data was extrapolated to an infographic by learnstuff.com which changed “technological interruptions” exclusively to “social media” (they also used Weekly World News as a source for their data).  Mashable republished the infographic and the mythology stuck.

Here’s the rub: The U.S. Bureau of Labor Statistics doesn’t show any corresponding decrease in productivity analogous to the rise in social media usage.  The productivity loss doesn’t exist, in fact year-over-year productivity is rising.  The argument, calculations and $650 billion dollar figure are fictitious.  So why are people so apt to believe it?

How would rational actors use social media?

In Dan Ariely’s book Predictably Irrational, he discusses a game in which two people are paired up.  The first person is given ten dollars and told to divide it (in whole dollars) between him and his partner.  The partner’s role is to accept the offer or to reject it.  Game theory would suggest that the first person would keep nine dollars and the other person would get one.  In this way, both people get some money and the first person maximizes his benefit.  In reality, the first person had better split the take 50/50, or risk losing it all.  Despite the fact that having one dollar would be better than none, the second participant frequently nixed the deal when it was inequitable.  It turns out that we aren’t so rational after all.

Social media has become a variation of that same experiment.  By encouraging social media usage in the workplace, businesses could increase awareness among people very likely to use their products or services: friends and family members of employees.  Businesses could encourage employees to engage company posts on Facebook increasing EdgeRank (and reach).  Businesses could leverage their employee’s social media aptitude to offer social care without additional labor cost.  A rational actor might see a group of trained advocates as a marketing opportunity.  But if employees want to get some personal enjoyment while on the clock, shame on them.

Instead businesses buy into the belief that social media is ruining their productivity, despite the fact that productivity is higher than it has ever been.  They block access to social networks at work: cutting off a connection to potential customers and squashing employee morale.  They insist in concrete return on investment for social media when they don’t hold their traditional media activities to the same standard.  Many businesses don’t view social media rationally at all.

It appears that social media doesn’t decrease worker productivity…. but that doesn’t mean anyone will believe you when you tell them.

What do you think?  If social media is decreasing productivity how come businesses are so productive?  Should people be able to use social media at work?

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Jim Dougherty

Jim Dougherty

Writer and chief of miscellany at leaderswest.com
I aspire to give people something to think about rather than tell them what to do. My favorite Google Alert is "social media research," I am increasingly compelled by Gen Z, and I appreciate good writers agnostic of where they write. At one time I was Kred's 12th most influential social media blogger and Klout's most influential person on the topic of David Hasselhoff. Transplant from Seattle living in Cincinnati. Haven't entirely adopted the local sports teams yet.
Jim Dougherty
Jim Dougherty
Jim Dougherty
  • http://www.WaxingUnLyrical.com/ Shonali Burke

    I think you analyzed it beautifully so I won’t make a mess of what you’ve already laid out! You know, it drives me nuts when companies push this kind of “data” to generate “buzz.” And then the rest of us have to pick up the pieces.

  • http://twitter.com/JMetcalfe_QPC Jason Metcalfe

    I believe that the term ‘productivity’ can often confuse the argument. From a short-term narrow definition, time on social media can be deemed unproductive as it is time spent not completing specific tasks; but in the same way as spending time studying towards an MBA or researching for a sales strategy is unproductive! It’s from the long-term perspective in which social media plays a significant role in strengthening networks and broadening the mind to enable future tasks to be completed more effectively that it can be viewed as productive. Thanks for the article Jim.

  • jimdougherty

    Thansk, Jason! Great insights and perspective – the perspective that businesses have about social media obviously colors a lot of their perceptions of these platforms. It’s a shame that more don’t see the value.