Employee misunderstanding 'costs £31 million'

News Article - 24 June 2008
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British and American businesses are losing an estimated $62 million (£31 million) on average each year as a direct result of employee misunderstanding, new figures show.

A report by Cognisco found that UK and US companies are spending an additional $37 billion (£18.7 billion) simply because employees do not fully understand their roles and responsibilities.

Intelligent employee assessment specialist Cognisco claims that the IDC white paper marks the first time that the true cost of employee misunderstanding has been analysed.

The study, $37 billion: Counting the Cost of Employee Misunderstanding, suggests that the average cost of workers failing to understand their jobs is more than £300 per employee, with common misunderstandings over business processes, job function and interpretation of company policies.

An estimated 32 per cent of the total cost of employee misunderstanding is caused by loss of business resulting from downtime, 17 per cent from poor procurement practice and settlements for industrial tribunals accounts for 16 per cent.

Mary Clarke, Cognisco chief executive, stated: "An organisation's greatest asset is its employees - but if any one of them misunderstands or misinterprets their role, this significant asset can be very easily eroded, with repercussions in the boardroom from a loss of business or impaired brand image and reputation."

Businesses can use accounting software to examine their spending, identify ways of reducing costs and meet regulatory and reporting requirements.

Article keywords: <img src='http://pictures.directnews.co.uk/liveimages/Gordon+Brown_700_18867621_0_0_7018685_300.jpg' align='right' style='width:150px; margin-left:10px;' />Gordon Brown has raised speculation that the government will propose tax cuts in the impending pre-Budget report.<br/><br/>The prime minister was asked about potential tax cuts on GMTV this morning (November 10th) and pointed out that petrol duty had been frozen and people were being compensated after the 10p income tax row.<br/><br/>He explained that he was &quot;determined&quot; to get economies throughout the world moving again &quot;and one way you can do that is by putting more money into the economy by tax cuts or public spending rises but that's something we have got to look at in the next few weeks&quot;.<br/><br/>When it was suggested to Mr Brown that assistance for the economy was needed sooner rather than later, he said: &quot;We've got a pre-Budget report in the next few days.&quot;<br/><br/>The Conservative party is also touting tax cuts as the way to deal with the economic downturn, while the Liberal Democrat leader Nick Clegg told the BBC that his party had been championing cuts for months and accused the other parties of &quot;clambering on the bandwagon&quot;.<br/>

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