Over three quarters (76%) of UK employers revealed that they do not currently have a formal policy regarding employee use of external social networks such as Twitter and LinkedIn, according to research released today by recruitment outsourcing specialists, Manpower.

By comparison, the independent research of over 2,100 UK employers reveals that one fifth of those surveyed (22%) said that they do have a policy in existence. Of those employers that do currently have a formal policy regarding employee use of external social networks over half said having such a policy in place helped avoid productivity loss (60%) and protected company reputation (55%). While 42% of employers believed that such a policy helped to protect intellectual property and propriety of information (42%) and a fifth (21%) claimed it helped recruitment efforts.

The use of social media to build and share relationships is changing the world of work. It is important that organisations recognise this and actively lay out a policy that will govern their employees’ use of these internal and external mediums, as they can be instrumental in driving employee engagement, productivity, collaboration and knowledge management.

These networks are not only improving engagement levels but crucially their use is leading to bottom line savings for our clients. Similarly, in our own business we use social networks such as online forums and discussion panels to share best practice and utilise the skills and expertise of our international network, which helps us provide a first-class experience for both clients and employees.

When asked what the two areas were in which external social networks could provide the biggest boost to their organisation in the future: building their brand (11%) and assessing candidates before hiring (7%) were the top choices. However, over half of employers surveyed (56%) failed to recognise the importance of social networking to their business as they claimed that they could not see external social networks providing a boost to their organisation in any way.

Interestingly, the vast majority of UK employers do not believe that their organisation’s reputation has ever been negatively affected as a result of employees’ use of social networking sites (95% of employers surveyed), while only 3% said that employees’ use of social networking sites had been detrimental to the reputation of their organisation.

In reality, we have probably only seen the tip of the iceberg in terms of how virtual and social networks will transform the world of work. Companies have often played catch-up in understanding how to harness new technologies. In the early years of the World Wide Web, in the mid-to-late 1990s, many organisations feared that employees would spend too much time idly surfing the Web, so they tried to control access and didn’t recognise its potential. Few could have predicted how the internet would transform our lives, and it seems the same will become true of virtual and social networks, not least from the commercial opportunities they hold for both employers and prospective employees alike.

Companies should consider taking the following steps to promote the constructive use of social networks:

Clearly communicate to employees what you are attempting to accomplish. A classic mistake is for companies to enter the social network space without a clear sense of what they are trying to achieve. The risk of jumping into social networks because they feel they are missing out could be more harm than good. Companies should outline what benefits they are hoping to reap from social networks, how that vision fits within their company culture and that all their people understand their core values.

Challenge employees to innovate. Promote the positive use of social networks by encouraging employees to come up with ways to use these tools to do their jobs better. Engagement often increases when employees feel they are contributing.

Tap internal experts. Teach by example by encouraging employees who regularly use social networking in their jobs to discuss and demonstrate how it’s done. Keep track of the new ideas that flow from this kind of mentoring exchange and share the ideas and best practices.

Let employees “own” the governance. The foundation of any healthy social network is an engaged community. Let your employees help develop and enforce your company’s guidelines. By taking a collaborative approach to developing clear goals and guidelines around social networks, employees are more likely to engage with and adhere to them.

It is critical not to insist that final policies are set in stone; instead, they should be allowed to change and evolve as the technologies evolve. Any social networks guidelines should be linked to your company’s overall behavioral guidelines. The goal is to create a system of governance under which social networking is not seen as an exception, but rather an activity that is intimately connected to your company’s overall people practices. Only by creatively channeling its use, will organisations succeed in reaping those benefits for sustained competitive advantage.