Melbourne Cup cost Australia over $1billion in lost productivity

The Melbourne Cup yesterday cost the Australian economy up to $1.239 billion in lost productivity, with over half of workers taking a half day off to watch the race.

CentrebetIn a Melbourne Cup survey commissioned by recruitment firm Randstad which polled 889 Australian employees it found over half (54%) take more than 3.5 hours off work in the afternoon on Melbourne Cup day. Randstad then extrapolated these survey figures using official ABS Labour Force statistics which show 11,276,100 full time employees in Australia, earning an average wage of $31.40 per hour, giving a total of $1.239 billion in lost productivity as a result of the Melbourne Cup.

“If our results are representative of Australian businesses, we could be losing over $1bn in the afternoon of the Cup,” according to Randstad CEO Deb Loveridge.

While the survey indicates the Melbourne Cup productivity loss may equate to almost a billion dollars nation-wide, Randstad CEO Deb Loveridge says any negative effects on individual organisations would likely be offset by a boost in staff morale, employee engagement and team-building.

“The Melbourne Cup is one of Australia’s prominent social events – traditionally accompanied by celebratory drinks, a sweepstake and, for over half of Australian workers surveyed, an afternoon off,” Ms Loveridge said.

“While employers should be aware of the Cup’s overall effect on their businesses’ bottom-line, the long-term benefits outweigh the short-term costs. In fact, employers may damage their company culture, reputation and retention if they don’t get involved, such is the passion, excitement and anticipation around the Cup.”

While some employees choose to take the entire day off (12.1%), the survey found that about half (47%) take part in an office-organised event – from sweepstakes to fully catered functions.

Of the various activities that take place on the day, 38 percent of Australian workers enter an office sweepstake, a quarter (25%) attend an office function, while 15% only stop long enough to watch the race before returning to work.

South Australian employees were least enthusiastic about the Melbourne Cup, with over 59 percent of respondents taking just half an hour to watch the cup, then getting straight back to work. Only 23 percent of respondents said their employers co-ordinated a function, and 12 percent claimed they were just too busy to get involved.

Queenslanders were most engaged with the Melbourne Cup, with 40 percent of Queenslanders taking the afternoon off, in addition the state had the highest function rates (33%) and sweepstake participation (36%).

  • Jess

    This article doesn’t indicate the proportion of the time employees take off that is counted as part of their regular quota of leave or time off.

    Surly only time that employees take that they would not have otherwise taken at some point in the year anyway can be counted.

    Once this is taken into consideration the estimated cost in production could be considerably lower than the figure quoted here.

  • Dave

    Just got back to work from the local pub next door( 3 1/2 hours off), watching the Cup and drinking beer, the biggest true Australian tradition we have.

    Apart from not putting a price on the value of this to us, the economists are so wrong in regards to productivity it astounds me. GDP, the measure of the nation’s productivity, is calculated by adding up total income not what is produced. This is because it is the same thing but it is easier to total up income.You can add up what society makes or what you sell it for, they are equal.

    If people are being paid while they are watching the Cup there is no effect on productivity as a whole. A specific example: while I was at they pub not working they had 4x the normal staff cooking lunches, serving drinks etc. I will catch up on the work I ignored but those extra staff have increased productivity and will now have more money to increase others’ productivity as the spend the income.

  • Trevor Caldwell

    I think the economic effect of the Melbourne Cup in Australia would be a possitive financial gain. The race is held at 3PM after the main shift in production in Austraila. There is a huge gain to the Tourist Sector, Food & Beverage Sector, Clothing & Footware, retail, gaming, and many other sectors.