/ 23 April 2010

Prepare for the fan effect

Prepare For The Fan Effect

With only 48 days to go to the World Cup, South Africans are beginning to realise that the event is not going to be the financial windfall many expected.

Businesses are now grappling with the potential threat of lost productivity during the event because of staff taking leave, spending less time at work in order to watch matches, or simply having difficulty getting to and from work when a match takes place in their city.

Peggy Drodskie of the South African Chamber of Commerce and Industry said companies can expect their employees to be less productive. “It will depend on the companies and what industries they are in, but there will be a drop in production because companies’ staff will want to watch games or go to matches,” she said.

In sectors where the impact of an influx of visitors is most likely to be felt, there may be a peak in business activity — this could include services such as retail, tourism and accommodation, said Drodskie.

Reports have suggested that the event could have a similar effect on business activity to periods such as the December holidays. During this time of the year people are fairly unproductive but tend to spend more money, said economist Dawie Roodt.

He estimated that the World Cup could bring in between R1-billion and R2-billion in VAT receipts as both locals and visitors spend on goods and services.
But the impact of the spending may lag somewhat because of delays in VAT collections, he said.

“Our total production in the economy is likely to be lower, but there may be a shift from one industry to another, so where one sector slows down, another one picks up,” he said. So, while manufacturing might drop off slightly as employees are distracted by the World Cup, services might pick up to cater to increased local and foreign tourism.

But Roodt is not too concerned about a serious drop off in productivity. “You must remember that the great South African pastime is strikes. Many businesses are used to managing the impact of workers not coming to work and many may handle the World Cup as they would such an event,” he said.

The way companies choose to deal with the impact of the World Cup could work to spare them costs and improve staff morale, said Christelle Grohmann, a director of business advisory firm Grant Thornton.

“The bottom line is that there will be less productivity during an event that comes to our shores only once in a lifetime,” she said. “But it’s important for companies to work with it rather than against it.”

But it is likely to be only certain matches on certain days and in certain centres that will cause any real disruption. “Certain games, such as Bafana Bafana matches, the opening ceremony and the final, are likely to have a bigger impact,” she said. “But the overall extended impact on workers and business productivity shouldn’t be overestimated.”

In these instances companies can plan around this by thinking ahead and communicating with their staff.

School and university holidays have been extended to six weeks and people are likely to take leave as they do during the December period, Grohmann said.

She recommended that companies devise a checklist establishing when big matches are being played, what times the games are and where they are being held in relation to the company. Finally, they need to determine the possible external and internal impact of the matches on their business.

Using flexitime to allow staff to attend matches, or to manage difficulties getting to or from work due to matches is just one way to cope said Grohmann.

Ensuring that alternative plans are made for meetings or client presentations that require travel outside the office is also important, she said.

Alternatives such as conference calls could be used, but businesses should then be prepared for costs relating to these to go up.

“Create incentives for people to come to work,” she said.

For example, Grant Thornton has created a mini fan park at its offices so people can watch matches and participate in the experience while at work.

For companies that don’t rely on office workers, such as factories or retail outlets, encouraging flexitime or making some changes to shift systems becomes even more important.

“Stores will have to have extended opening hours, so additional working shifts may have to be added,” she said. “It is very important that we continue to work, it just won’t be business as usual.”