By Daniel Hunter

Private companies from sectors as diverse as finance, telecoms, energy, IT and retail should follow the example set by organisations in the public sector, or risk widespread reputational damage.

According to data released today (Wednesday) by KPMG, the private sector’s failure to adapt to the demands of social media poses a threat to the bottom line, as inadequate responses to online activity contribute to service disruption and low levels of customer satisfaction.

Figures from a survey of more than 1,000 senior business executives suggest that problems arise because a significant proportion of businesses across the private sector view social networking as a ‘distraction from work’, which should be ignored.

The research highlights that 1 in 5 executives in the financial services sector claim that social media shouldn’t be accessible in the workplace. The same belief was held by 1 in 3 of those in the design and media sectors — but these figures compare to less 1 in 10 across the public sector.

It also appears that employers across the private sector are unable to distinguish between professional and personal use of social media sites and tools, by their employees. The result is a high level of exposure to fraud and data theft, with many organisations falling victim to ‘phishing’ scams or leaking sensitive information.

“Organisations across the private sector are usually the first to put measures in place protecting intellectual property and reputation," David Elms, Partner and Head of the Media sector at KPMG, said.

"It seems, however, that the cautious approach to social media that many of us exercise as consumers has, so far, failed to materialise in the workplace.

“The same cannot be said of organisations operating within the public sector as the evidence suggests a more mature approach to social media. It may be born out of the fear of the repercussions that lost data will bring, or recognition that there is duty of care to manage information securely. Whatever the driving force, it is clear that UK industry needs to follow this lead.”

Conducted on KPMG’s behalf by OnePoll, the results go on to reveal that public sector organisations are more likely to restrict use of personal accounts for sharing work-related information than their private sector counterparts. For example, 65 percent of public sector bodies think that it is unacceptable for employees to ‘use personal accounts to post on behalf of their employer’, but employers within telecommunications (43 percent), financial services (29 percent) and retail (28 percent) take a more relaxed approach.

It is clear that the key driver behind the public sector’s tougher stance on social media etiquette rests in fears over the impact of litigation. One in 3 respondents believe that ‘court action’ will increase if organisations maintain a cavalier approach to online postings — a figure that is higher amongst public sector employees (28 percent) than their counterparts across the financial services (25 percent) and telecommunications sectors (24 percent).

“It’s a mistake for any organisation to think that social networks will only have a short-term impact on business," Elms added.

"There are already far too many examples of businesses being forced to back-track or apologise because they either took too long to react or refused to put safeguards in place. It’s not just about monitoring online chatter; it’s about creating clarity on who can represent the brand across social networks and establishing parameters for their actions.”

Despite publicity surrounding security scares and the value of intellectual property, executives across the public sector are also more likely to insist that staff change passwords on a regular basis (34 percent) than those in financial services (17 percent) or telecommunications (27 percent). The figure is even higher amongst GPs and nurses (39 percent), suggesting that confidentiality is taken more seriously in the public sector than elsewhere.

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