Leadership

Kavanaugh's confirmation might have cost businesses $12.6 billion — 3 times more than March Madness

Brett Kavanaugh took his seat on the Supreme Court yesterday after a contentious confirmation process and narrow Saturday vote. The decision transfixed the nation and potentially cost employers billions in lost productivity, even more than the all-consuming March Madness tournament.

HR consulting firm Challenger, Gray and Christmas annually calculates the productivity costs to businesses of such top events, including the recent controversial hearing.

It estimates that approximately 70 million people watched or read about the dramatic September 27 hearing on their work computers, cell phones and televisions, leading to a loss of nearly $1.8 billion per hour as workers followed the news.

Some spent nearly two to three hours of their work day that week focused on the testimony, the firm estimates. Since then, as employees have debated the case in advance of the final vote or refreshed their browsers for updates, the total loss to employers has grown to an estimated total of $12.6 billion.

By comparison, the firm estimates that the annual NCAA tournament, a perennial productivity killer, costs businesses $4.6 billion in total, or nearly one third the loss of the Kavanaugh hearing.

The firm's calculation for the Kavanaugh decision is based, in part, on an average hourly wage of $25.39 from the Bureau of Labor Statistics and the assumption that only around 80 percent of workers are at their jobs on any given weekday.

It also factors in the number of workers who use the internet at work — more than 90 million, according to the National Telecommunications and Information Administration — and other data on the share of workers who use the internet at work and are interested in politics.

Nielsen data finds that viewership of the Kavanaugh hearing was at its strongest between 3:15 p.m. and 6:45 p.m. ET on September 27. This excludes online viewers, people following Twitter and online news coverage, or those who listened to livestreams at work.

The impact of this productivity loss won't hit employers right away. "They won't see this showing up in the bottom line at the end of the month," Andrew Challenger, vice president of the HR firm, tells CNBC Make It. Employers are more likely to see delays and slowdowns in work.

The firm also looked at the Nielsen ratings for the Anita Hill hearing in October 1991, when Hill accused Supreme Court nominee Clarence Thomas of sexual harassment. That hearing also consumed the country and 20 million households tuned in.

"The type of coverage that got, before the internet, gives you a sense of how many people are paying attention," Challenger says.

Challenger suggests managers resist encouraging debate about the issue but be sensitive about how their staff is handling it. "They should understand that this is a major inflection point in the course of our country's history, so it makes sense that employees are paying attention."

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This story has been updated. It was originally published October 5, 2018.