The proliferation of social networking websites and facilities in the workplace can help both employers and employees in business, a think tank asserts.

Speaking on behalf of Orange Business UK, Peter Bradwell from independent think tank Demos says that there are clear benefits in the areas of innovation and idea development, although companies must overcome initial difficulties and challenges in using networking sites.

He continues: "There are some real challenges that relate to the trust between the employees and organisations and the monitoring or regulation of the way people use these tools."

Despite this, Mr Bradwell says that if the right balance was struck between workers and their bosses, both can reap the rewards of increased productivity through such online facilities as Facebook and MySpace.

According to the Network Citizens: Power and Responsibility at Work report carried out between Orange Business and Demos, closer relationships between clients and business contacts helped companies flourish.

In a recent survey of SMEs for Connect, the two most important benefits of outsourcing were guaranteed response times and allowing in-house IT staff to concentrate on more strategic issues.