Online shopping sends business productivity down the Amazon

BY KEN TYSIAC AND JEFF DREW
November 25, 2012

With the arrival of the holiday shopping season, the analysis of a particular work email account serves as a cautionary tale to employers.

Barb Bowes, a human resources consultant and president of Legacy Bowes Group in Winnipeg, Manitoba, offered the example of a company that found an average of 35 emails a day from shopping sites crammed into the email inbox of a former employee who had left for a new job.

“It was calculated that she wasted a minimum of 1.5 hours of business time per day just cruising through the emails, let alone potential additional time actually shopping,” Bowes said.

Lost productivity due to online shopping by employees at work is a significant concern for businesses this time of year. In the United States, the biggest retail sales day of the year is “Black Friday” – the day after the Thanksgiving holiday. That’s followed by “Cyber Monday,” the day when employees return to the office – and, in many cases, continue holiday shopping, taking advantage of special offers from online retailers. Cyber Monday falls on Nov. 26 this year. Last year, U.S. consumers spent a record $1.25 billion on Cyber Monday, according to comScore.

U.S. online shoppers are expected to increase their spending to $54.5 billion during this holiday season, compared with $46.6 billion in 2011, digital commerce research firm eMarketer has projected. Deloitte forecast a 15% to 17% increase in U.S. nonstore sales during the holiday season, with 75% of nonstore sales coming from online channels.

In the U.K., 2011 online sales made up 12% of retail trade, up from 8.6% in 2008, according to the Centre for Retail Research. The center’s data also show that total online retail sales in Europe rose 18% in 2011 over the previous year.

Employers’ approaches are mixed with regard to using a work-supplied device for online shopping, according to a worldwide survey of IT professionals conducted by international IT association ISACA. Depending on the region, one-half to just over two-thirds of organizations limit or prohibit use of work-supplied devices for online shopping (see chart at end of story). Anywhere from 25% to 42% allow shopping on work-issued devices, depending on the region.

Organizations in Africa and Asia/Pacific were most prohibitive of shopping on work-issued devices, while those in Oceania were most permissive.

As online shopping grows, it seems only natural that visits to retail sites would increase when people are most plugged in – during work hours. And companies trying to maximize productivity have a difficult line to walk.

Productivity during working hours often is essential to success. But in an increasingly flexibly scheduled, mobile-enabled work environment, the line between “work time” and “time off” is blurring. If a worker is spending an hour at home each night checking and responding to work email, it’s difficult to blame her for spending 10 minutes in the office finding and ordering the perfect Christmas sweater for her husband.

“We recognize that people, they’re at our place of employment all day long,” said Karen Abernathy, CPA, human resources director at clean energy process provider Ciris Energy. “And many times business that you have to do personally is only during [business] hours. So you have to recognize and allow people the ability and flexibility to do that. That is stated in our policy, that we expect that you’re going to have personal things that you have to attend to, whether it be on the computer or the phone or what not. It just shouldn’t be used excessively.”

The bottom line for workers, Abernathy said, is that they must meet their productivity metrics. In other words, if they get their job done, they won’t be second-guessed for spending a few minutes on an online shopping site.

Tech-aided prevention

Although technology enables this productivity conundrum by giving employees the ability to shop at their desks, technology also provides some solutions.

“Using next-generation firewalls to block shopping traffic and restrict the user’s access is a good choice,” said Randy Johnston, president of IT consulting firm Network Management Group, based in Kansas. “Personal shopping at work should be excluded by policy and can be enforced by the firewall. If a firm wants to allow shopping, consider enabling only a few workstations and/or a few times.”

Johnston said it is relatively easy to block retail sites with firewalls purchased in 2011 or later. But David Cieslak, CPA/CITP, CGMA, said that while blocking certain individual retail sites can be easy, blocking a significant number of them can become difficult.

Cieslak, a principal with business and accounting software provider Arxis Technology in California, said many of his company’s clients block obvious objectionable content, such as pornography and gambling sites. But he said few go beyond that and block shopping or sports network sites.

Arxis clients typically augment their web filtering with a policy limiting the use of company devices to business purposes. Cieslak said organizations should monitor employees’ use to confirm adherence to policy, and said the mere fact that employees know an employer is monitoring activity can be a significant deterrent.

Jim Bourke, CPA/CITP/CFF, CGMA, said the CPA firm where he works as a partner, WithumSmith+Brown, monitors employees’ internet use and will discuss inappropriate use when employees are found visiting sites during the day that are not related to business. But he also said that some online shopping during business hours may be inevitable.

“Not that I would encourage online shopping at work,” Bourke said, “but we need to face the fact that it is happening and will continue to happen. Having said that, I believe there is a happy medium. Employers want employees to be productive during the day.”

In certain sectors, such as manufacturing, preventing online distractions – for shopping or other activities – is a safety issue. For that reason, Bowes said, many employers in those sectors are requiring employees to leave their smartphones in their lockers when they start their shifts.

But in the many jobs where employees are allowed to keep their mobile devices with them, forbidding them from using their work computers to shop can be a potential pitfall with regard to productivity.

“Employees will use far less efficient devices, like their phones or tablets, [during work hours] and take even more time shopping,” Johnston said.

That may be one reason that some companies are stopping short of outright prohibition.

Cybersecurity concerns

One technological area where there is no room for compromise is the prevention of infection of business computer systems by viruses and malware. Scammers often use false holiday “deals” to spread viruses and malware and gain access to unwitting users’ personal information.

A McAfee study showed that 20% of respondents cannot tell whether an online shopping site is secure. Experts say security and vigilance are perpetual concerns, whether it’s the holiday season or not.

“Malware is always a concern, so strong security is a must,” Cieslak said. “Companies should regularly make sure that [anti-virus software] is installed and up to date on all machines and perimeter security is solid and regularly monitored. In addition, all machines should be running a secure [operating system] such as Windows 7 or Windows 8, and all critical patches are automatically and immediately applied.”

Presuming all the proper systems controls are in place, the decision over whether to allow online shopping by employees will vary from company to company. Abernathy thinks “minibreaks” actually can improve productivity, so a limited amount of browsing for holiday bargains would be tolerated at her company.

Bowes said smaller companies might have success encouraging employees to keep online shopping and personal use of their computers to a minimum. But at larger companies, she said, a loose policy can create real shortages in productivity.

Especially if employees are getting 35 emails a day from shopping sites.

“If every third employee of a 1,000-employee firm engaged in one hour of online shopping per day over a five-day period, how much lost productivity would result?” Bowes asked. “What is the cost of overtime tallied up because an employee can’t get their work done on time when they have wasted time on shopping? How many customers were neglected while an employee was shopping instead of responding to customer needs?”
Q: What is my enterprise’s policy with regard to shopping online using a work-supplied device?
2012

Region Allows Limits Prohibits Unsure
Africa 25% 34% 32% 10%
Asia/Pacific 26% 32% 37% 5%
Europe 38% 35% 21% 6%
Latin America 30% 31% 32% 7%
North America 32% 40% 21% 7%
Oceania 42% 30% 21% 7%


Source: Survey of business and IT professionals who are members of the international IT trade association ISACA.

Ken Tysiac ( ktysiac@aicpa.org ) and Jeff Drew ( jdrew@aicpa.org ) are JofA senior editors.

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