Unnecessary meetings can cost big companies $100 million a year, report finds

Large companies could save as much as $100 million a year by holding fewer unnecessary meetings and cutting down on their invite lists, according to a recent study. 

A common refrain among workers who were polled as part of the report — produced for meeting note software maker Otter.ai by Steven G. Rogelberg, a UNC Charlotte professor and expert on meeting strategy — was that they are pulled into too many time-wasting gatherings. That often leads to boredom and frustration, with employees saying the squandered time interfered with their completing more productive work, the survey found.

Overall, companies spend a total of $37 billion per year on meetings, according to Harvard Business Review, underlining the enormous investment in such communications. For example, a previous study by Rogelberg published in Small Group Research, a scholarly journal, cited research that found copy-machine maker Xerox spent more than $100 million a year on meetings in their manufacturing and development unit.

But much of that money appears to be ill-spent, his research suggests. Rogelberg's survey of 632 workers across 20 industries asked how many meetings they attend in a week and whether respondents felt their presence had been critical. The answer? Respondents said they didn't need to be in 30% of the gatherings they attended.

"The most valid account of whether something was necessary is the individual report. They are the best arbiter of whether they felt like their time was actually used well and honored or if it was wasted," Rogelberg told CBS MoneyWatch

Based on how much time workers said they spend in nonessential meetings as well as their salaries, the survey estimated that organizations employing 5,000 people waste around $100 million annually on unnecessary gatherings. For a company with 100 employees, the financial savings from eliminating unnecessary meetings would amount to $2.5 million per year, the report said. 

To determine the potential cost savings to companies, Rogelberg first calculated organizations' total expenditures on meetings, including those that employees said were worth attending. Over the course of a year, he found that the average large organization spends the equivalent of roughly $80,000 on meetings per employee, taking into account individuals' salaries and the amount of time they spend in meetings.

Of the 18 hours a week employees spend in meetings, they reported that nearly six hours were unproductive. That amounts to more than $25,000 in annual "wasted" investment in terms of direct monetary costs like salary and benefits and indirect costs such as focusing on tasks that boost the bottom line, according to Rogelberg. 

The research then extrapolated the data out to companies of different sizes. For example, an organization of 5,000 employees spends a total of roughly $320 million a year on meetings. If roughly a third of those annual hours are unproductive, the company is effectively wasting $101 million per year on meeting time that could be better spent on other activities, the study concludes.

Eliminating unnecessary meetings also cuts down on employee frustration, which our research shows affects productivity," Rogelberg said. "So it gets rid of that, and they'd be able to engage in other work activities and have greater opportunity to engage in more deep work and get into a flow."

Other research also drives home that ineffective meetings hurt the performance of businesses. According to the Harvard Business Review, a study of 20 automative supply, electrical, packaging and other companies found behaviors such as wandering off topic and complaining in meetings were linked with lower levels of market share and reduced innovation. According to research in the MIT Sloan Management Review, some 70% of corporate managers reported that meetings were costly and unproductive.

Switching off the video

Employees across different roles and management levels spend an average of 18 hours a week attending 17.7 meetings, Rogelberg found in his latest survey. By contrast, employees said it was important they attended only 11.8 of those meetings, or roughly a dozen hours a week.

Nearly half of workers said they had too many unnecessary meetings on their calendars. Even more, at 53%, said they still felt compelled to attend those meetings.

Workers who attend what they view a unnecessary meetings report multitasking in 70% of the gatherings — it was also common for people to hide or mute their video and audio, Rogelberg found. 

"When you're having a meeting and some people are multitasking, it has a negative effect. Furthermore, multitasking is contagious. People start to feel guilty if they're not multitasking," he said. 

Gender differences

Female employees were more loath to decline meeting invitations than male workers, expressing concern over how they'd be perceived by coworkers and that they might be seen as disengaged from their duties. Furthermore, they did not want to burden coworkers with having to bring them up to speed on what they might have missed. 

"Proclivity to not turn down a meeting invite is amplified for women. They were concerned about burdening others, had greater sensitivity to impressions and using others' time," Rogelberg said. 

Too few leaders are trained in how to hold an effective meeting, according to Rogelberg. Many organizations also lack ways for workers to provide feedback. 

"We need to level-up skills, and build feedback and accountability systems," Rothelberg said. 

For example, meeting agendas should be framed as a set questions to be answered, versus a list of topics for discussion, he said. "Now you're really thinking about why you're actually having this meeting. By framing it as a question to be answered, you know who to invite. If you can't think about any questions, it likely means you don't need a meeting." 

Norms around workplace gatherings also need to shift. Meeting holders should consider whether a meeting requires interaction and whether a given worker's participation is important to the topic and relevant to their role, Rothelberg said.

"Those are all the litmus tests to have a meeting," he said. "If you're not requiring interaction, it's just not needed and the problem at hand is not something of great relevance, and we can rely on more passive asynchronous communication strategies."