How to reduce costly employee errors

Most employee errors are simple work-related mistakes that can be easily fixed. However, without the proper precautions in place some seemingly-innocent employee errors can lead to costly consequences. A minuscule error such as a typo in a contract or a program’s code or a missing signature on a document can turn out to have dramatic financial repercussions for a business if left unchecked.

Many employee errors are considered the result of “employee misunderstanding,” which is defined as; mistakes caused by employees’ misunderstanding or misinterpreting of operations, job functions, and policies. Often, these mistakes can be reduced by implementing better communication efforts. 

Human error is unavoidable. As an employer you don’t want to punish employees for every single accident they make, but you also don’t create a workplace environment in which mistakes are occurring frequently. Business owners have a responsibility to protect their operations from as many preventable financial risks as possible in order to remain profitable and successful. Below are some of the steps management can take to reduce costly employee errors.

Assess and Document Errors When They Happen
Before you can take precautions to reduce costly employee errors, it’s helpful to know what the most common errors are for your particular business. Document employee errors and the results of said errors – even if no performance management steps were taken – to give you a foundation to make necessary changes in policies and procedures or for future training opportunities.

Get Rid of Unnecessary Stress in the Workplace
One of the main reasons employees make mistakes is because they are stressed and/or rushing to finish their work. Ensure your employees aren’t constantly being made to compete against each other or aren’t being given unreasonable deadlines to meet.

Set Forth Clear Policies and Procedures
Most errors can be prevented just through proper training and enacting clear policies and procedures. If there are tasks that seem complicated, create a checklist to help employees self-audit themselves and ensure they are submitting error-free work.

In some cases there may be an employee who still makes frequent mistakes regardless of the steps taken by management. When the decision is made by management to let an employee go because of their performance, it can potentially result in claims against the company. Management liability insurance, also called directors and officers coverage, can help protect against financial loss resulting from these types of claims, pay for legal fees and indemnity payments for settlements or losses in court and give employers one less costly error to worry about.

If you are interested in Management Liability Insurance or E&O Insurance, click here to speak with one of our insurance professionals. 

Source: https://www.errors-omissions.com/