Is this your organisation’s most important hidden cost?


March 17, 2017

Image of business people hands working with papers at meeting

Meetings are the lifeblood of an organisation. They are where your organisation’s strategy is ultimately translated into action items and where relationships are formed and culture is nurtured.

Good leadership use meetings to generate motivation, and by saving time and generating productivity good meetings make an invaluable contribution to your bottom line.

Yet according to results of a Microsoft Office survey, ineffective meetings, unclear objectives, and lack of team communication are the top time wasters of workers around the world. The online survey drew responses from over 38,000 people in 200 countries, with the following outcomes:

  • Employees work an average of 45 hours per week and consider 17 of those hours to be unproductive.
  • Employees spend 5.6 hours each week (12.4%) in meetings.
  • About 70% of respondents felt meetings weren’t productive.

The results of another survey give some clues about this: 92% of respondents confessed to multitasking during meetings, 41% admitted to multitasking often or all of the time, 69% admitted to checking email, and 49% admitted to doing other, unrelated work.

How do we measure the cost of unproductive meetings? Inefficient meetings are a cost to any organisation. But because the cost is an opportunity cost it does not appear in any line item in company accounts.

However, we can assume that an employee only has a job because the employer believes he is worth more than his salary. So, at a minimum, we can value an employee’s time of his average hourly rate.

So, accepting the above numbers, 70% of employees’ 5.6 meeting hours weekly — or about 4 hours — are unproductive. This represents 8.7% of their total time working and 8.7% of their salary. For an organisation of 100 employees with average salaries of $100,000 (including on-costs) the unproductive hours have a cost of $868,000 per year.

But it goes beyond that. An important function of meetings is to motivate employees: to give them clarity of purpose, and to develop positive working relationships. So unproductive meetings can de-motivate employees and so reduce their productivity even when not in meetings. The fact that this is hard to measure does not make it less real. The central message from Peters and Waterman’s groundbreaking book In Search of Excellence is that human motivation is the most important single factor contributing to a company’s success.

Further, meeting analysis by Romano and Nunamaker shows that, year over year, employees spend more and more of their workday attending meetings, with most of them being unproductive and high-cost senior executives spend significantly even more of their time in meetings. Other surveys suggest that typical middle managers spend around 35% of their time in meetings and top managers as much as 50% of their time.

Some costs can be easily overlooked:

  • Time spent preparing agendas and meeting papers.
  • Wages and salaries for those who prepare the meeting (including attendees, secretaries, set up crew, etc.)
  • Cost of materials used for the meeting (handouts, visuals, etc.)
  • Overhead costs for the facilities for length of meeting
  • Cost of speaker or facilitator, if applicable
  • Cost of travel, lodging, meals, etc. if meeting is held out of office
  • Cost of any additional miscellaneous expenses incurred due to holding the meeting

These points suggest that our earlier numbers may be a significant underestimate of the cost of unproductive meetings. Some studies have proposed a formula that estimates meeting costs at twice the salary costs for all participants.

All this would be pretty depressing if there weren’t a flip side — and the flip side is the scope for improving your bottom line through better meetings.

So ask yourself: even among the 30% of meetings that are productive — do they get a pass mark or a high distinction? How much scope is there to improve productivity even in meetings considered productive?

Dr. Ian Hopkins is of the firm Potomac AP specialising in meeting effectiveness and efficiency as well as performance for boards, management and projects.
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