April 23rd, 2010 @ 08:08

While surfing and jumping from link to link, I stumbled upon The Real Costs of “Free” Search Site Services. While the global idea of the article holds a point, I guess that the emphasis is definitely not put on the right parts.

The bold parts are all about the money that gets wasted by ads on a free web service. Let’s review the initial assertions and the conclusion :

For a company employing 10,000 people with an average loaded cost of $50/hour

Users would thus waste 1 hour and 34 minutes

In total, the cost of having employees look at and occasionally click on distractions costs the company $1.2 million per year.

What’s wrong here ? Well, first I guess that the main problem is that the stunning effect of the article is that $1.2 million per year, which looks huge at first sight, but if you look a little more, this $1.2 million a year is for a 10.000 employees company, so that’s actually $120 per employee per year, which is, as specified, about 2 hours and a half of work of that employee over the whole year.

Now let’s get around the fact that the employees sometimes have to go pee. I’d say that’s easily 5 minutes lost a day in non productive hygiene stuff, at least, which amounts for a total of about 20 hours a year per employee lost, which gives an awful $1012 per year per employee, or for our test company $10.1 million a year. Urgh ! Guess it’s about time to get the WC outside of the work area and have your employees swipe out & back in when they get there, to remove this illegitimate 1 grand you are giving out to each employee each year for nothing but pee !

If we also include the fact that anyway the employees won’t be 100% productive all the time, which leads to even more wasted money, that $1.2 million a year starts looking a little bit ridiculous. That’s the whole problem with that article, they used that 10.000 fold factor to have some significantly stunning figures to give, while completely omitting to mention how that scaled to.

Based on some rough estimations (about 3 weeks of holidays, working 5 days a week, 8 hours a day), our company is spending about $100.000 a year on each employee, or a total of $1 billion a year on human resources (on just those working in front of a computer screen). Two conclusions : that “wasted” time amounts for just 0.12% of the company HR expenses in that field, and that company is huge : 10.000 employees working on a computer, it must either be a large IT company or a really large non-it company, and in both cases, even if they probably don’t rely on free services (that would be silly), $1.2 million is probably just pocket money for them

Don’t get me wrong, stupid wastes should be avoided as much as possible, but please, pretty please, don’t try to hold your point using huge scale factors. Numbers lie, but when the lies are unveiled, the liars just look like fools. It just doesn’t help and could be avoided, especially when there are other much more robust arguments (here against ad-powered free services) around.