The Steps to Minimizing Costly Employee Errors

    Posted on: August 14, 2017 by Signature Insurance Group

    Everyone makes mistakes, but unfortunately some mistakes come with a hefty price tag. A study done in an IDC white paper estimated the average annual cost of “employee misunderstanding” – defined as mistakes caused by employees misunderstanding or misinterpreting operations, job functions, and policies – as $62.4 million. Some workplace accidents are a result of faulty machinery or sheer chance, but over 90 percent of workplace accidents are a result of human employee errors. Obviously you don’t want to punish employees for making innocent mistakes, but you also don’t want to cultivate an environment where mistakes – costly or not, deliberate or not – are likely to occur. Protect your operation with a Management Liability Insurance policy and take a look at the following steps to reducing the likelihood of employee errors and effectively addressing the ones that do occur.

    Create a comfortable environment.

    Studies have shown that people do better work and make fewer mistakes when they feel happy and comfortable, and there are a number of small yet effective things that you can do to make your employees feel more comfortable. For example, you can make the office physically more comfortable by:

    • Keeping the office temperature at a comfortable level,
    • Managing noise levels and distractions, and
    • Designing your workspace to ensure that employees will be able to work quickly and comfortably.

    In addition to these physical details, it is important to create a mentally comfortable environment. Try to cultivate a workplace climate that is friendly and relaxing. Make yourself available to your employees, whether you’re getting to know them or providing assistance when they need it, and encourage the rest of your team to do the same. Consider implementing wellness elements into your workplace as well, particularly if you work in a mentally taxing industry where employees are prone to high levels of stress.

    Set clear standards.

    As stated above, many expensive employee errors can be traced back to simple misunderstandings. While you can’t force an employee to read your mind, you can make your guidelines as clear, comprehensive, and accessible as possible to reduce the risk of misinterpretation. Create detailed yet straightforward guidelines for your company policies, job descriptions, and necessary work processes, and make them readily available to all employees. In addition to sending them out electronically, have physical copies available around the office, and consider holding meetings with each team so they can clarify anything they may be confused about. Once they’ve been created, continue to make yourself available to clear anything up, and provide regular training sessions.

    Address errors effectively.

    Once a costly error has occurred, it’s up to you and the rest of your business to try to quickly come back from it and minimize the damage. Think about what the root cause of the error was: was it laziness? Ignorance? Carelessness? Or was it just a random accident that no one could have foreseen?

    Once you’ve found out what the root cause of the error was, get to work on addressing it. Whether you need to hold a meeting with your employees to discuss an unclear procedure or you need to completely rewrite an ineffectual policy, do it as quickly as possible and keep the rest of your company in the loop about what has changed. Once you’ve implemented new practices, regularly inspect them, and also inspect policies, procedures, and equipment that you haven’t yet had problems with – you could potentially stop a future error before it occurs.

    Improve employee engagement.

    In addition to improving productivity, increasing employee engagement can improve performance and reduce employee errors. According to the Harvard Business Review, businesses that reported higher levels of employee engagement also reported 48 percent fewer safety incidents and 41 percent fewer quality incidents, which are often caused by employee errors.

    Let your employees be a part of the process. Ask them what they think about the current procedures and their job duties, and allow them to make suggestions about company policies. Listen to what they say, as it will help them to feel more connected to the work they are doing and less likely to make a mistake. We suggest implementing a “suggestion box” where employees can express their feelings about policies, procedures, and operations without having to fear retribution or reveal their identity if they do not wish to.

    About Signature Insurance Group

    Signature Insurance Group has been working since 1969 to provide comprehensive insurance solutions to individuals and businesses across the United States. We offer a range of insurance products and services in risk management, employee benefits, business insurance, and personal insurance, and we pride ourselves on our commitment to creating “Signature Relationships” with our clients where we commit to providing the best, most comprehensive service possible. To learn more about our goods and services, contact us today at (800) 464-3606.

    Posted in: blog Business Insurance Management Liability