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December 2000 |
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Don`t Look Now, but nearly two-thirds of workers admit to web shopping on the job.
Is it a corporate perk or time-clock larceny?
By Mary Wagner
It’s been called the dirty little secret of e-commerce: most web shopping happens during the workday on company time and bandwidth. But guess what: it’s not so secret anymore.
A wave of recent findings is trumpeting rampant workplace web shopping. Here’s a sample: 60% of workers surveyed by Neilsen/NetRatings visited a shopping site from a workplace desktop in January—and that’s not even peak shopping season. In an October survey by career information web site Vault.com, 32% of workers said they access the web at least a few times daily for non-business reasons; another 37% admitted surfing the web constantly. And a total of 70% of those responding to a new BizRate study said they shop online during the workday—with 40% admitting to doing most of their web shopping on weekdays from 8 a.m. to 4 p.m. Need we go on?
Some employers say Internet access for personal errands is fine by them; a perk that keeps workers happy when companies expect them to put in long hours. Until productivity is visibly disrupted on their very own enterprise, they’re not likely to assign a high priority to regulating or limiting workplace access to shopping. So most e-retailers aren’t worrying about it either. “I haven’t heard any members say this is killing their sales.” says Scott Silverman, vice president of Internet retailing at the National Retail Federation.
Fair enough. But though still relatively low on merchants’ radar screens at this point, workplace web surfing rules should be on the radar of every smart e-retailer looking at the future. All projections for online shopping point skyward, well beyond its current 2% penetration into total retail sales. “As more people shop the web and as it becomes a more regular practice for those who already shop online, that 2% is quickly going to become 4%, then 8%,” says Seth Geiger, vice president of professional services at BizRate. “It would not be unrealistic to estimate that by 2006, 10% of retailing would flow through the Internet.” And with much of that increase likely to flow through workplace desktops, employers could get tougher on shopping from work.
The makers of filtering software to manage corporate desktop Internet access—and some analysts that follow that industry—believe that day will come sooner rather than later. IDC estimates that today perhaps 50% of employers either monitor or actively manage employee’s Internet access. But it also projects that the corporate market for filtering software to manage Internet access across the enterprise will skyrocket, zooming from 1999’s $63 million to $590 million by 2004. That number covers software that monitors and manages desktop access to dozens of categories ranging from gaming to adult sites to banking and stock trading. But there’s no denying that among employers already deploying filtering software, shopping is one of the most popular targets. About 60% of the 6,000 corporate clients of SurfControl, a Scotts Valley, Calif.-based filtering software developer, use the technology to mange or limit access to shopping sites, among other web categories.
Employers that either bless or ignore workplace web shopping don’t regard it as a productivity threat. They may even see it as a benefit, reasoning that it keeps workers at their desks on task longer, by turning the hour-long lunchtime trek to a store into a 15-minute trip online.
That’s the opinion of Frank Gillman, who oversees 450 corporate desktops as director of technology at Allen Matkins, a Los Angeles-based law firm. “When you work the kind of hours that most people at law firms work, there’s a benefit to telling an employee to go ahead and buy the dress you need for the party, but buy it online instead of leaving work and spending three hours at a mall.”
But in truth, it really takes more than 15 minutes to consider, select and purchase a dress, or a lot of other items, online, as another story from President Kevin Blakeman of SurfControl illustrates.
Tick tock, tick tock
At a conference presentation on employers’ use of filtering software several months ago, the company’s CEO was challenged by an analyst who argued that web shopping was a workplace time-saver rather than time-waster. His evidence? He’d just purchased a PC online, taking a total of 20 minutes to assemble the shopping cart, pay for it and complete the transaction. The web had turned what would have been a lengthy visit to a real-world store into an online purchase that took well under half an hour. When probed further about the purchase, however, the analyst realized he’d spent as much as seven hours online researching reviews, specifications and pricing. “The buying transaction was very efficient, but he’d spent a lot of time—he admitted prime working time—doing the research. It was a bit of a false economy,” says Blakeman.
Workers don’t tend to log onto non-business sites for hours at a time. Some 31% of those in the Vault.com survey believe it’s okay to do so for up to 30 minutes; another 24% say they cut themselves off at 15 minutes. But 15 minutes here and a half-hour there across the enterprise do add up, and some studies cite workplace web surfing for big productivity losses and wasted corporate bandwidth. SurfControl estimates that non-work-related web surfing costs American businesses some $54 billion in lost productivity each year. The most spectacular recent example was the Victoria’s Secret lingerie fashion show webcast on May 18. Conducted at 3 p.m.—smack dab in the middle of a Thursday afternoon—the event drew more than 1 million viewers at a time and cost corporate America an estimated $120 million in productivity as employees logged on to the 44-minute webcast, estimates filtering software maker Websense.
“Just one employee streaming the webcast was the equivalent of downloading the entire Encyclopedia Britannica onto his or her workplace network,” says John Carrington, CEO of San Diego-based Websense. “That’s a huge drain on corporate resources and employee productivity.”
The cost, the cost
Productivity losses counted in tens of millions or billions may just be too big to be real to individual companies. But these numbers will be: SurfControl has a formula that lets individual employers calculate how much unauthorized workplace web use is costing them. SurfControl assumes the all-in cost of an office worker is about $33.50 an hour. If an employee spends an hour a day web-shopping, trading stocks or reading the news, that employee costs the company $167.50 a week.
To be sure, some industry watchers don’t see web surfing as a major theft of corporate time. “The web changes the the way we work,” says Bill Gassman, senior research analyst with the Gartner Group, who has discussed this issue with hundreds of companies“Even if an employee wasted 30% of his time web surfing, he might be 70% more productive during the rest of the time through the Internet.”
But lost staff time isn’t the only issue. Most shopping sites don’t currently offer bandwidth-hogging media enhancements such as streaming video or audio. But as they experiment with advanced technologies and data-dense content in anticipation of wider broadband access from homes, they’d be wise to remember that workers will try to access the same features from desktops on the job—increasing unsanctioned demand on enterprise connections.
Most companies have broad guidelines on what constitutes appropriate use of company property, including PC desktops, while on the job. Fewer have had specific policies on the types of web sites to which workers may have access, or when and for how long workers may surf the web on personal business. These policies are similar to the approach companies have taken regarding personal phone calls and emails. Now, larger corporate employers are leading the charge to change web policies. Though about half of employers monitor and/or regulate workplace web access that doesn’t relate to company business, IDC says the figure is higher, 65%, among companies with 1,000 or more employees.
The policies are a patchwork that varies greatly from employer to employer. Some take a hard line, blocking access to non-related work sites with enterprisewide filtering software. That’s the case at OmniGiant, a Sumpter, S.C.-based waste management company, where information systems manager Ron Davis oversees 50 desktops used by 100 employees. Since April, the company has used filtering software by SurfControl to monitor worker’s web use and block access to all categories of web sites, including shopping destinations that aren’t directly related to its business.
The argument that busy workers should be able to use the web for personal errands when putting in long hours doesn’t fly with Davis, who says most of the employees are on hourly wages. “Rather than make the policy overly complicated and give access at certain times, we just block all non-work-related categories. If our employees work longer than their shift, they get overtime and comp time for that. Bandwidth is expensive. We wanted to make sure it’s being used for the purpose we intended.”
It’s another story at Irvine, Calif.-based Canon Copiers. The company has been using Websense’s filtering software for three years. The software monitors use and blocks access to certain categories of web sites, but shopping sites aren’t among them. The primary driver at Canon, as at many employers that adopted filtering software early on, was to protect the company from potential liability by preventing offensive materials from entering the workplace via the Internet. “We don’t restrict access to shopping or financial sites—but we did want to be able to enforce the polices our HR department set out. The software takes the burden of policing off the shoulders of the IT department,” says James Underwood, senior IT director.
Going overboard
Still other employers such as Allen Matkins are looking into the future and coming up with guidelines that try to balance the needs of increasingly time-starved employees with the company’s need to stay productive. The firm has used Websense’s filtering software for two years to monitor employee web use and enforce a policy that bans access to certain sites altogether while managing access to others, including shopping destinations.
“We generally trust our employees to know what’s right, but at the same time, the organization is responsible for making sure that the demands of the clients are being met and that everyone is as effective as they can be during the workday,” says Gillman. “The software lets us be flexible.” Initially, the company used the software to block access to shopping sites across the enterprise, but lifted the ban after six months. Based on monitoring reports, however, the company has blocked shopping selectively for a few web surfing employees who have gone overboard.
Depending on what data emerge to quantify people’s actual shopping and buying behavior online—beyond what employers and employees now believe it is or should be—there’s a good chance that e-retailers will see employers move more aggressively to manage it, especially as technology providers refine software that lets employers fine-tune management with a high degree of sensitivity.
The likely result of greater workplace web scrutiny is greater ability for employers to manage who gets access to what, when and for how long, say industry consultants. With new, more sophisticated filtering software, web access may, for example, be limited by a worker’s title, time of day, day of week, desktop location, category of site or file type. E-retailers already working to streamline search and buying processes for customers in a hurry are positioned to fare well when and if employers ramp up workplace shopping rules.
But though workplace web shopping could one day be more regulated, given the inexorable march of the Internet into both commerce and daily life, it’s clearly here to stay. “Internet access is a benefit I’m going to give my employees, because I want them to feel happy about where they’re employed. So you put some boundaries on it—even a 401k’s got limits on what you can put in,” says Geiger. “It’s just like any other benefit.” 
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