The Billion Dollar Financial Cost of Bad Meetings in America
Meetings cost American businesses far more than most companies realize.
The problem is not that meetings exist. Businesses need meetings. The problem is the number of meetings that happen without a clear purpose, include people who do not need to be there, run longer than necessary, or could have been handled without a meeting at all.
The financial cost is easy to overlook because it rarely appears as a separate expense on a company’s financial statements.
There is no line on the income statement for “employees sitting in unnecessary meetings.”
But the expense is there.
It is hiding inside payroll.
The $37 Billion Problem
A commonly cited estimate from Harvard Business Review puts the annual cost of meetings in the United States at approximately $37 billion in lost salary expense.
That number is based on the amount of time employees spend in meetings and the associated compensation costs. It is an older estimate, so it should not be treated as the current cost of meetings in America. If anything, the growth in meeting time and employee compensation since that estimate was developed makes the underlying issue worth examining.
CBS News: Unnecessary meetings can cost big companies $100 million a year
The more useful question today is not whether the exact number is $37 billion.
It is this:
How much money is your company spending on meetings that should not exist?
Start With the Math
Consider a relatively small meeting.
Six employees.
One hour.
An average fully loaded labor cost of $60 per hour.
That meeting costs the company approximately $360.
Have it every week and the annual cost is about $18,720.
Now imagine the same company has 20 recurring meetings involving six people.
That is approximately $374,400 a year in employee time.
And that is before accounting for the work that does not get done because employees are in those meetings.
The numbers get much larger very quickly.
This is why meeting reduction is not simply a productivity initiative.
It is a financial initiative.
The Meeting Is Only Part of the Cost
The biggest mistake companies make is calculating the cost of a meeting based only on the time spent inside the meeting.
The real cost is larger.
If an employee spends an hour in a meeting, that hour is gone.
But if that meeting interrupts two hours of focused work, creates follow-up tasks, requires additional meetings and pushes important work into the evening, the actual cost can be considerably higher.
Harvard Business Review reported that new research found approximately 70% of meetings keep employees from doing productive work.
Harvard Business Review: Dear Manager, You’re Holding Too Many Meetings
That is not simply a calendar problem.
It is a resource allocation problem.
Companies are paying highly compensated people to produce results. Every hour spent in a meeting is an hour of labor being allocated somewhere else.
The Cost Shows Up in Overtime
Meeting overload can also create an expensive secondary problem.
Employees still have work to finish.
If meetings consume the workday, the work does not necessarily disappear. It gets pushed into the morning, the evening or the weekend.
Atlassian surveyed 5,000 knowledge workers across four continents and found that 51% said they had to work overtime at least a few days a week because of meeting overload.
Among directors and above, that number rose to 67%.
The same research found that 78% of respondents said they were expected to attend so many meetings that it was difficult to get their work done.
Atlassian: Workplace Woes, Meetings
Think about what that means financially.
The company may believe it is paying for a 40-hour workweek.
But if meetings consume enough of those 40 hours that employees regularly need additional time to finish their actual work, the company is effectively paying for more labor.
And much of that additional labor exists because of the way the workday was structured in the first place.
Meeting Time Has Exploded
The amount of time people spend in meetings has also increased dramatically.
Microsoft analyzed collaboration activity across Microsoft 365 and found that between February 2020 and February 2021, time spent in Teams meetings increased 2.5 times globally.
The average Teams meeting also increased from 35 minutes to 45 minutes.
Microsoft later reported that by February 2022, the average Teams user had experienced a 252% increase in weekly meeting time compared with February 2020.
Microsoft Work Trend Index: Great Expectations, Making Hybrid Work Work
That is a remarkable increase in a resource that companies are paying for every minute of every workday.
And it is not just about the meeting itself.
More meetings mean fewer uninterrupted blocks of time.
Fewer uninterrupted blocks of time mean more context switching.
More context switching makes it harder to complete meaningful work.
There Is a Human Cost Too
The financial cost and the human cost are closely connected.
Employees who spend their days moving from meeting to meeting still have deadlines, projects and responsibilities waiting for them.
Harvard Business Review reported that attending too many meetings can be stressful and tiring, while productivity and quality suffer when employees lose valuable time for focused work.
Harvard Business Review: The Psychology Behind Meeting Overload
Microsoft’s research found that 54% of workers felt overworked and 39% felt exhausted in its 2021 global survey. The same research found that meeting and chat activity had increased substantially.
Microsoft Work Trend Index: The Next Great Disruption Is Hybrid Work
Stress and exhaustion are not just employee wellness issues.
They can become business issues through lower engagement, reduced productivity, absenteeism, turnover and difficulty retaining talented people.
Bad Meetings Multiply
There is another financial problem that is harder to calculate.
One bad meeting often creates another meeting.
A decision was not made, so another meeting gets scheduled.
Someone was not included, so another meeting is required.
Nobody knows what was decided, so people meet again.
The meeting ran out of time, so the discussion continues next week.
A status meeting reveals a problem that requires a separate meeting.
The original hour has now become two hours, then three, then an entire chain of calendar invitations.
This is how meeting culture becomes expensive without anyone deliberately deciding to spend more money.
The Question Companies Should Be Asking
The question should not be:
How can we make meetings more efficient?
That is useful, but it is not enough.
The better question is:
Which meetings should exist at all?
Every meeting represents an investment of employee time.
That investment should produce something valuable.
A decision.
Alignment.
A solution.
A meaningful conversation.
Something that genuinely benefits from people being together in real time.
If a meeting does not produce something that requires a meeting, the company is spending money for no good reason.
The Financial Opportunity
Reducing unnecessary meetings does not require eliminating meetings altogether.
It starts with looking at the calendar differently.
Take a recurring meeting with eight employees that costs the company $80 per employee per hour in salary and benefits.
That is $640 for one meeting.
If it happens every week, it represents more than $33,000 in annual labor cost.
Eliminate five meetings with the same structure and the company has potentially freed more than $165,000 in annual labor capacity.
That is not theoretical productivity.
That is paid employee time.
And unlike many cost-cutting initiatives, reducing unnecessary meetings does not require layoffs, new software or cutting someone’s salary.
It requires deciding that certain meetings are no longer worth the cost.
The Bottom Line
Bad meetings are not free.
Companies pay for them through salaries, overtime, delayed projects, lost focus, employee exhaustion and work that has to be completed outside normal working hours.
The financial impact is difficult to measure precisely because every organization is different.
But the basic math is simple.
More people in a meeting means more money being spent.
More time in a meeting means more money being spent.
More unnecessary meetings means more money being spent without creating additional value.
The next time someone schedules a meeting, ask a simple question before accepting the invitation:
What are we going to accomplish that requires us to be together in real time?
If there is no clear answer, the most financially responsible decision may be to cancel the meeting.
Because sometimes the easiest way to save money is not to spend the hour in the first place.
Sources
Harvard Business Review, Stop the Meeting Madness
Harvard Business Review, The Psychology Behind Meeting Overload
Harvard Business Review, Dear Manager, You’re Holding Too Many Meetings
Microsoft Work Trend Index, The Next Great Disruption Is Hybrid Work
Microsoft Work Trend Index, Great Expectations: Making Hybrid Work Work
Atlassian, Workplace Woes: Meetings
CBS News, Unnecessary meetings can cost big companies $100 million a year
