Return On Investment of Email Improvements

I believe that improving email efficiency -- which can be helped in large part by better email programs -- is a task with potentially huge ramifications.

By my estimates, US corporations spend between US$ 238 billion and US$ 4.5 trillion on email every year. (The 8x spread in the numbers is due mostly to uncertainty in the average US worker's salary.) Using the figures that I believe most, I estimate US$ 1.5 trillion per year.

These figures only count salaries for the time workers spend reading, replying to, and organizing their email. I didn't try to count the cost of software, hardware, or system administrators' time.

For comparison, the entire US military budget in 2002 was US$ 360 billion. The huge tax cut of 2001 is estimated at US$ 1.3 trillion over ten years, or US$ 130 billion per year.

I believe that reducing the time spent on email by 25% is a perfectly achievable goal. That works out to savings between US$ 59 billion and US$ 1.1 trillion per year, while my best estimate says that we can save US$ 375 billion per year.

Even if we use a lower bound of 7.5% savings, that works out to an absolute minimum of US$ 17 billion per year and upper estimate of US$ 337 billion per year. By contrast, the entire world currently spends only about US$ 10 billion per year on AIDS prevention and research.

Moral: improving workers' email effectiveness gives an extraordinary return on investment.

Justification for Estimate

The sections that follow explain how I came to my estimate. Unfortunately, it is extremely difficult to get good data on anything related to the Internet.

I've tried to link the figures I give to the source of the information. Sometimes I don't have a primary reference, in which case I link to articles that mention the information.

Number of People Using Email At Work

There are a number of different ways to estimate the number of people who use email at work. These give credible figures between 84 million and 112 million, with one figure of 130 million that I don't believe.

I only found one direct measure, which only deals with email users inside corporations. (This would thus not count people in partnerships or sole proprietorships.)

United Messaging has a direct estimate that there were 94 million corporate email users at year-end 2000.
United Messaging was also reported to estimate that there were 130 million corporate email users. I do not believe this number and did not use it. It seems too high considering that there were only 141 million people in the total US workforce in 2000.

Another way to estimate is to figure out how many people use email in the US, and how many of those use it at work. That gives an estimate of 84 million corporate email users.

NielsenNetRatings says that there were 166 million American Internet users in April 2002.
The Commerce Department found in Dec 1998 that 85% of Internet users used email. (I was really surprised to hear that it was so low. The only thing that I can figure is that the other 15% do nothing but download porn.)
Forrester Research had an older estimate that 60% of mailboxes were inside corporations. (Alas, I cannot find a current reference for this piece of data. If you know a URL that justifies this statistic, please let me know.)

Combining the NielsenNet, Commerce Department, and Forrester numbers gives a figure of 84 million corporate email users.

Here's a third way to calculate:

According to United Messaging, 75 percent of workers used e-mail at the end of 2000.
According to a 2001 Gallup poll, more than 80% of Americans use email at work.
The US Bureau of Labor Statistics estimated that in 2000, there were 141 million people in the US workforce.

Combining the United Messaging and US BLS estimates gives 106 million US workers who used email in 2000. Using the Gallup numbers instead gives an estimate of 112 million US workers who use email.

The Commerce Department and Forrester numbers are quite old and may not still apply, but I think that 84 million is a reasonable lower boundary for the number of corporate email users in the US.

Hours Spent on Email Each Day

There are a number of different estimates of the amount of time spent on email every day. It seems to be between 2.2 and 4 hours per day, with the best estimate being the 2.2 hours per day.

In early 2001, Ferris Research published a report that said that the average corporate email user spent 2.2 hours/day on email.
Gartner Group estimated in 2001 that employees spend an average of 49 minutes per day replying to e-mail, while 24 percent spend more than an hour a day checking their messages. (This is not terribly useful information by itself, but it's a useful cross-check on other numbers.)
Christina Cavanagh, a professor of management communications at the Richard Ivey School of Business in London, Ontario, estimates that workers are now wasting as much as four hours a day just on sorting out their e-mail.
Gartner Group estimated that the average American worker spends four hours each day reading, writing and forwarding e-mails, and that corporate e-mail now carries up to 75 percent of a company's communications. Note that I have not been able to corroborate this "four hours" figure. I suspect that the figure was misattributed and actually from Christina Cavanagh.

Improvement in Efficiency

I believe that a reduction in email time of 25% is possible with better techniques and tools. I unfortunately don't have solid survey data that I can use to back this up, it's just a hunch.

I do believe that I have solid figures for a 7.5% reduction in time. While much smaller, it still works out to a significant dollar savings.

Spam alone is significant problem, and I believe that the second-generation of anti-spam products will get rid of most spam.

InsightExpress reports that 65 per cent of their respondents spend more than 10 minutes each day dealing with spam. This means that the average is higher than 10 minutes. 10 minutes is 7.5% of 2.2 hours/day.
Gartner Group found that just 27 percent of the e-mail received required immediate attention.
I've asked people how much time the strategies that I give in my books saves them. People usually tell me 25%- 50%, with one person telling me 75% and one person (who didn't get much email) telling me 0%. I believe that 25% is a very reasonable figure.
I got email from one of my reviewers that started, "Ducky, you saved my life!"
(Many of the strategies that I put forth would be much much easier with better email programs.)

Salary

I don't know what the average US worker makes. (If you know, please send me that information.) However, the minimum wage is currently US$ 5.15.

That US$ 5.15 is "unburdened" -- it does not count payroll taxes, insurance, retirement, or any of the other costs associated with an employee. I've heard that the "burdened" rate is around twice the "unburdened" rate.

I suspect that the average wage is actually around US$ 15-20 hour, which when burdened would be around US$ 30-40 per hour.

Hours Per Year

To complete the analysis, I assume that workers work five days per week, 50 weeks per year. This works out to 250 work-days per year.

(For the purposes of this calculation, I assume that workers don't read email on weekends or on vacation. Anecdotal evidence strongly suggests that this is not correct.)

Kaitlin Duck Sherwood
Updated 17 May 2002.