Careers & People
Table 2: Breakdown of costs resulting directly from human error by industry sector (%)
Banking Petrochemicals Pharma Transport Other Total
Downtime 37 23 37 33 32 31
Procurement 7 19 18 22 19 17
Tribunals 12 18 17 17 15 16
Personal injury 4 19 11 14 10 12
Disaster 15 4 5 4 16 10
Regulatory 19 2 6 3 4 6
Financial practice 5 8 5 5 4 5
Tax 1 6 1 2 2 3
Source: IDC
Table 3: Intangible risks over the past 12 months (%)
Banking Petrochemicals Pharma Transport Other Total
Tighter, more stringent regulation 40 5 12 4 3 10
Fatalities in the workforce or public 2 21 6 36 11 14
Impact on share price 29 10 14 18 20 18
Health and safety interests/inspections/ 7 52 39 46 22 31
greater regulation
Impaired brand image 81 61 75 69 53 64
Impaired reputation 83 74 85 78 64 74
Impact of employee morale 76 76 77 75 73 75
Reduced productivity 91 82 89 96 94 91
Loss of sales/reduced customer satisfaction 100 100 96 98 100 99
Injuries to personnel or public 100 100 98 100 100 100
Source: IDC
will prosecute failures to manage health and recognises that a face-to-face approach to identif_i cation of any problem areas before the
safety properly. employee assessment in a large organisation, worst should happen.
The f_i ndings also highlighted that the real often with staff dispersed across different Finally, employee misunderstanding is
cost of employee misunderstanding may be locations and geographies, could be logistically an issue that every senior level manager
even higher when costs, such as impact on diff_i cult, expensive and liable to errors. or director should be aware of as it has a
brand, reputation and customer satisfaction Nevertheless, it suggests that the problem bearing on the achievement of all business
are taken into account. can be overcome by online assessments objectives and the relationships with key
98% of pharma companies said employee that employees can complete in their own stakeholders.
misunderstanding increased exposure to time and which enable directors to assess Putting in place an employee assessment
injuries to their personnel or the public, quickly and cost-effectively the location of the programme will ensure that companies
and 96% reported exposure to loss of source of problems. Surprisingly, the research are in a position to assess and control
sales, over the past 12 months. In addition, revealed that only 6% of the surveyed misunderstanding, giving organisations a
around 89% said they had been exposed to organisations had such a solution in place. superior competitive advantage.
reduced productivity and 85% cited impaired An employee assessment should be a vital
reputation. part of companies’ risk management and
The research shows that while compliance strategies, as well as a key talent
organisations are often aware of the costs of management tool. If companies regularly
employee misunderstanding, only one in three assess their employees’ performance, they
claims to have taken any action to close the can identify what employees understand and
Mary Clarke is CEO of
gap. However, those organisations that did what they misunderstand, identifying where
Cognisco.
take action by having an employee assessment training is needed and where skills gaps exist.
programme in place reported fewer human Careful assessment of these factors will help
errors, lower employee turnover and to ensure that any strategy implemented is
reduced health and safety breaches. The study as effective as it possibly can be, allowing the
www.scripnews.com/supplements Scrip 100
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