Workers trading on company time. A New York Times piece with a quote
from our own SI Jill on the matter.
May 20, 1999
Some Abandon the Water
Cooler for Stock Trading on the
Internet
By ROBERT D. HERSHEY Jr.
n Florida, a young dentist tracks stocks between
patients, sometimes even between an X-ray and a
filling. In Washington State, a freight-company
manager logs on to a financial Web site for four to
six hours of his workday. A designer at a California
architectural firm gets so absorbed in the market that
his productivity falls 25 percent.
The long bull market and cascading advances in
technology have combined to drive capitalism's main
numbers game into the heart of the American
workplace, with millions of wage earners, managers
and entrepreneurs obsessing about Wall Street. Their
obsession, in fact, far eclipses the speculative 1920's,
when elevator operators and bootblacks were a chief
source of what passed for information.
"Two years ago I would have never
thought I'd be into doing this," said
the dentist, Norma Victores, 30, of
Hialeah, Fla., who follows the
market on the Internet and has
bought part of her portfolio of 21
stocks and mutual funds on line. "I
used to think it was just for the
big-timers."
While much of the early concern
about workday Internet abuse
focused on pornography, the lure
of the stock market has overtaken
it, some specialists said. The
Internet is making a lot of
information available to small
investors that was once accessible
only to professionals.
"That's where employees are really
wasting their time," said Jonathan
Penn, an analyst at Giga
Information Group, a firm that
advises companies on information
technology. "I'd definitely put that
first," he added, ahead of sports,
personal E-mail, chat rooms and
pornography.
The flick-of-the-finger ease with which office
workers and others can research, monitor and trade
stocks -- often able to return instantly to their
assigned tasks -- is a growing concern for employers.
Most of the people willing to discuss the issue were
self-employed or worked for small companies where
Internet abuses could be dealt with amicably. Larger
corporations, while acknowledging the potential for
abuse, generally denied that employees were using
company time to trade stocks. Some devotees in the
workplace said the activity could be addictive, but
most simply found it a practical method for earning
extra income.
So far, the Government has not been able to measure
any economic effect. Michael Harper, the acting
associate commissioner for productivity and
technology at the Bureau of Labor Statistics,
suggested that the time spent by workers on the stock
market was not unlike water-cooler discussion of
football or movies and might even be a partial
substitute for it.
"We don't know whether they would be working or
doing something else" if there was less absorption in
the market, Harper said.
But according to Media Metrix Inc., a New York
company that meters Internet use much the way
Nielsen Media Research does television, 22.8
million Americans used Web sites on company time
in March. Some 8.2 million people visited Yahoo
Finance, CBS Marketwatch, Schwab, E*Trade and
other financial sites at work, up from 6 million just
three months earlier, the company said.
About 25 percent of all corporate Internet traffic,
much of it surreptitious, is considered unrelated to
work.
The stock market "is becoming a huge distraction,"
said Victor Woodward, a vice president at Content
Technologies, which develops programs to help
companies create and enforce policies for Internet
use. He said corporate demand for help in curbing
stock-related Web use had quadrupled in the last
year. And companies face growing competition for
the attention of their employees: Internet gateways
like Yahoo, Go and Excite, eager to attract
advertisers, use their home pages to tempt Web
browsers to check stock quotes.
On-line trades account for as much as 30 percent of
all buying and selling by individual investors,
surveys show.
"I can't imagine that this is not a problem in the
workplace," said Jill Munden, who oversees Silicon
Investor Inc., the biggest financial discussion forum.
She said 50 percent of Silicon Investor site visits,
which averaged 20 minutes each, came during
regular working hours and that "you have to believe
most people don't divulge trades and research to their
boss or co-workers."
The Web site for Charles Schwab, the broker
accounting for more than a quarter of Internet
transactions, now averages 33 million visits a day,
up from 24 million in the fourth quarter of 1998,
according to Daniel Hubbard, a spokesman. And
actual transactions, which take only a couple of
minutes, are outnumbered 26 to 1 by typically longer
sessions for researching companies or mutual funds
or to review portfolios.
Schwab's busiest periods, Hubbard found, coincide
with the opening and closing hours of the New York
Stock Exchange -- from 9:30 to 11:30 A.M. and
3:30 to 4 P.M., which falls during the workday for
most people on the East Coast.
Take the case of Dean Hatfield, 36, the designer, for
whom earning between $5,000 and $15,000 a month
from on-line trading for much of last year began to
threaten his day job.
"Instead of billing, say, 37 hours during the week, as
I should have, I was billing perhaps 28," said
Hatfield, who works at KRJ Design in Burlingame,
Calif. "It became an issue because the revenue just
wasn't coming in." Hatfield's superiors took away his
Internet access, so now if he wants to go on line he
must walk to another terminal, his activities easily
visible. He likens it to "getting your hands caught in
the cookie jar." Now, he says, "I do it on the phone
or from home -- but it's not day trading anymore."
At American Fast Freight, a company in Kent, Wash.,
that bundles shipments into bigger units and then
arranges for overseas transport, the official in charge
of computers, Jeff LePage, is still struggling to find
a way to "put the kibosh" on a manager who is
routinely logged onto a financial site for most of the
day.
"I hadn't really focused on
this until it became
chronic," said LePage, who
has noticed a gradual
decline in the unit's
performance for which he
blames the employee, a
peer he is reluctant to
confront.
LePage has switched off
the employee's financial site, but the employee
appears to be logging on to other people's
computers. "The battle goes on," LePage said.
Then there is John Alexandrou, a 43-year-old
salesman in Foster City, Calif., who said that for the
last three years he has spent 30 minutes to an hour of
working time a day on the market. "The adrenaline of
trading options, that's got me completely hooked,"
Alexandrou said, adding that the fraternity of
on-the-job market devotees is very large, especially
in Silicon Valley. "You're not going to find very
many people in this Valley who are not distracted by
the stock market," he said. He insisted, however, that
despite his on-the-job trading, he never failed to
make his business quotas.
On-the-job Internet stock activity has been a
particularly visible problem in the high-technology
community on the West Coast, where much of
employees' pay is in stock options and it is common
for even those of low rank to have an equity stake.
None of this necessarily means that investors pay less
attention to their jobs. Ross Brown, vice president of
MSI Consulting, a Seattle-based management and
marketing adviser to high-technology companies,
says he often spends less time tending to his
portfolio -- worth in the mid-six figures -- than when
he used to phone orders to a broker, a process he said
can mean "you've chewed up an hour of your day."
Still, the market is seen as an increasingly serious
time eater by many employers, who have only
recently begun to monitor Internet activity in earnest.
A survey by the Society for Human Resource
Management in Alexandria, Va., found 76 percent of
members not bothering to monitor activity as
recently as 1997.
Moreover, employees seem to have little trouble
avoiding detection from casual observation.
"One second I was in E*Trade," said Hatfield, the
California designer, who for a time was making
more money trading than in salary. "And the next
second I was doing design in Autocad," a tool of his
trade.
"I could hide the day trading quite easily," he said. |
