"Productivity gains" sponsored by the Fed actions include time off from water-coolers. 'nuff said!
nytimes.com
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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.
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"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.
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In the office, stocks may be more popular than sports, E-mail or pornography.
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"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. |
