The time employees spend on Facebook, Twitter and other social networking sites, instead of doing work, is reportedly costing British businesses £1.38 billion a year.

In a survey of 1,460 office workers, fifty-seven per cent said they used social networking sites in the office for personal use.

On average, those employees spent 40 minutes on the sites every week, which equates to just under a full working week of productivity being lost each year. The £1.38 billion loss to industry was calculated using the national average wage and the amount of people in office work.

But the businesses themselves were part of the problem, with over three quarters not having set any guidelines on the sites, according to the survey, conducted by research firm TNS.

IT services firm Morse, which commissioned the survey, highlighted the reputational risk of failing to set a social networking usage policy. High profile firms often experienced reputational damage when employees went online and posted sensitive or disparaging information, it noted.

Over a third of office workers admitted they had seen sensitive information posted on social networks, but 84 percent still maintained it was up to them what they post online.

The survey also highlighted potential dangers around URL shortening, popular with Twitter users because of the low number of characters allowed in status updates. Not being able to see the original website address potentially leaves businesses open to phishing scams, malware and computer viruses, it said.

“The popularity of social networking sites such as Twitter and Facebook has grown considerably over the last couple of years, however with it has come the temptation to visit such sites during office hours – it’s not just a lunch break thing,” said Philip Wicks, consultant at Morse. “When it comes to an office environment the use of these sites is clearly becoming a productivity black hole.”

But he also noted that with the right policies in place, the business use of social networks “can help facilitate closer ties with employees and customers”. To ban the sites completely would be “a bit draconian”, he said.

A recent EIU study and discussion showed that with 3G phones like the iPhone and strong network access across the UK, policies are defunct as your workers have access in their pocket. Instead a more mature relationship with your workforce is likely to prevent major damage to the organisation.