Risk Management articles for surveyors

New staff

by Nick Worthington LLB (Hons), Risk Management Consultant

“Yes we have an induction procedure……there’s the toilets and there’s the kitchen.”

It’s ironic that while firms introduce new staff to help increase productivity and move the business forward, poor recruitment and induction procedures can in fact bring more problems than they solve. In some cases firms are putting their reputation and profitability in jeopardy.

We can all recognise the scenario of being far too busy and needing extra fee earners. A new recruit arrives, the workload is spread and you breathe a sigh of relief. There is a real danger that all you have done is defer the problem for a month or two and it will return to bite you. This is bad management.

Firms are now confronted with a wide range of legislation and regulations that require strict compliance. The new employee must be immediately assimilated into the regime. Has the employee been trained on money laundering? What is their knowledge of health and safety issues? Are there urgent training requirements?

The preparations should commence before their arrival. Firms should draft a written job description for the new employee, which sets out their job purpose and key tasks. Do not forget communications with existing staff. You should circulate an email or memo around the firm informing all staff of the new appointment, their intended role and starting date.

After their arrival the new employee must immediately be briefed on the firm’s procedures and policies. This will not be achieved by the gradual exposure to the firm’s working practices. There is no substitute for a formal induction procedure. This will be a standard programme which the new employee will undertake containing standard items on a checklist. Any areas for immediate action or training should be noted and monitored.

Office Manual – general
A representative of the firm (e.g. the office manager) should sit down and take the employee through the office manual. They should also be given a copy of the manual to take away and read. Key areas that should be discussed are:

Appraisal systems
Accounts procedures
Money laundering procedures
Telephone and voicemail procedures
Email policy (including internet and intranet usage)
Levels of authority – signing letters, requesting cheques, handling cash, expenses etc
Organigram – explain the structure of the firm and where everybody fits in
Disciplinary and grievance procedures
Holiday and sickness policies
Client complaint procedures
IT systems

The employee should gain an understanding of the firm’s risk management and practice management procedures. This is the starting point for their assimilation into the firm’s culture.

Office Manual – department

A representative of the department (e.g. department head) should take the employee through the department procedures. Key areas that should be discussed are: -

File audits
Precedents
File management
Diary systems – explain precisely what to enter, where and why
Their role, where they fit, objectives, targets, business plans etc.
Insurance – explain the circumstances for notification of potential claims and the procedure

Reduce the exposure to risk by identifying the risk areas they are exposed to and explaining the risk systems they should apply to reduce that exposure.

During their initial period with the firm you should conduct regular discussions with the new employee. Do they have any concerns? What don’t they understand? What training is needed?

The induction procedure should apply to all categories of employee from the lateral hire partner to the new office junior. Remember that the actions of all staff can lead to complaints and claims, not just the actions of fee earners. New employees are unknown quantities and their assimilation into the business must be managed. Do not forget to include temporary staff or staff who are returning from extended periods of leave for example maternity leave, sabbaticals or long term illness. Do they need updating? Have procedures changed?

This managed introduction will also create a good impression on the new recruit. First impressions are important and the retention of good staff is vital for the future health of the business. A good induction process will assist in making the new employee feel part of the team. It will indicate that the firm has good management procedures.

New staff, new ideas and new skills are essential ingredients in a growing business but do not forget to manage the risks as well.

The Underwriter’s Concern

Negligence claims come from staff, partners and directors. It is vitally important to obtain a written disclosure from new recruits of any claims they have been involved in. How else can you really know what you are taking on? This is even more important for new partners coming from another partnership if you agree to indemnify them under your insurance for their personal liability arising from a previous partnership.

January 2006

Surveyors

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