The private sector's failure to adapt to the demands of social media poses a threat to the bottom line and creates a risk of reputational damage, according to data released by KPMG.
A survey of more than 1,000 business executives revealed that inadequate responses to online activity by private sector firms contributes to service disruption and low levels of customer satisfaction.
The survey results suggested 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 highlighted that one in five executives in the financial services sector, and one in three in the design and media sectors, claim that social media should not be accessible in the workplace.
However, this contrasts with less than one in 10 across the public sector, which set a good example to follow, according to KPMG.
The survey also revealed 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, the study found.
A significant proportion of businesses across the private sector view social networking as a "distraction from work" which should be ignored Public sector takes mature approach to social media
"Organisations across the private sector are usually the first to put measures in place protecting intellectual property and reputation," said David Elms, partner and head of the media sector at KPMG. "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 a duty of care to manage information securely. Whatever the driving force, it is clear that UK industry needs to follow this lead," he said.
Conducted on KPMG's behalf by OnePoll, the survey revealed 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% of public sector bodies think it is unacceptable for employees to use personal accounts to post on behalf of their employer, but employers within telecommunications (43%), financial services (29%) and retail (28%) take a more relaxed approach.
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According to KPMG, the key driver behind the public sector's tougher stance on social media rests in fears of litigation.
One in three respondents believed court action would increase if organisations maintain a cavalier approach to online postings. This belief is higher among public sector employees (28%) than their counterparts across the financial services (25%) and telecommunications sectors (24%).
"It's a mistake for any organisation to think that social networks will only have a short-term impact on business," said Elms.
There are already too many examples of businesses being forced to backtrack or apologise because they either took too long to react or refused to put safeguards in place, he said.
"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," said Elms.
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%) than those in financial services (17%) or telecommunications (27%).
The figure is even higher among GPs and nurses (39%), suggesting that confidentiality is taken more seriously in the public sector than elsewhere.
