What is conflict in the workplace really costing you?

By February 26, 2012Workplace Conflict

Googling the cost of conflict in the workplace will net you about 24,000,000 results, and just as many opinions.  We all know workplace conflict exists, and many of us do not deal with it in a proactive way, and I believe that the average business knows there is a cost, but not how much.  Conflict in the workplace is different than conflict in other areas.  Generally, people who work together rarely have any say in who they will work with (unlike the ability to choose one’s friends and partners), and will have to continue working together after a conflict.

Are you aware of the cost of conflict in your workplace and how it affects your organization’s effectiveness and productivity?  Before we look at the costs, let’s examine the various sources of workplace conflict:

  • Personality clashes
  • Poor leadership (ranked the #1 source in Canada and the UK)
  • Unreasonable or heavy workloads
  • Lack of role clarity
  • Poor or no performance management strategies or systems

As well, in very, very diverse organizations there can be cultural,and linguistic causes.  The CPP Global Human Capital Report – Workplace Conflict And How Businesses Can Harness It To Thrive (if you love statistics, check the report out here https://www.cpp.com/pdfs/CPP_Global_Human_Capital_Report_Workplace_Conflict.pdf) cites the primary causes of Workplace Conflict as:

  • Personality clashes – 49%
  • Stress – 34%
  • Heavy workloads – 33%
So what happens when workplace conflict remains unresolved?  The experience of poorly managed or ignored conflict will leave employees feeling alienated and powerless.  Organizations will see an increase in absenteeism, particularly stress related absences.  Employee disengagement will be obvious – employees who appear to be “retired in place”, don’t complete their work, or miss deadlines.  But workplace conflict that is not addressed, or is badly managed can have some pretty nasty less obvious consequences:
  • Sabotage against the organization, petty theft as one example.  When employees feel disconnected for the organization, their moral compass can become skewed.
  • Damage to the employer’s brand – big social media impact here.
  • No longer able to attract talent (see above).
  • Employee turnover.
  • Missed opportunities and lost business.
In the CPP Global Human Capital Report, the estimate is that the average employee can spend 2.1 hours a week on conflict issues, and other studies suggest that manager time spent on conflict can be 30-40% of their time (Thomas and Schmit, 1976; Watson and Hoffman, 1996).  If you’d like a quick and dirty look at what conflict might be costing you, try the following exercise:
  1. How much time/week, on average, do you spend dealing with workplace conflict (interpersonal, your own, organizational, etc.)? ____________ hours/week
  2. What is your hourly rate of pay? $__________
  3. Multiply #1_______ x #2___________ = $__________/week
  4. Multiply #3__________ x the number of weeks you work each year_____ = $________ total dollars spent by you, alone, in conflict management.
You alone.  This calculation only skims the surface of the cost of conflict in the workplace.  It doesn’t even begin to address the hidden costs (some of which we have discussed above):
  • Wasted time.
  • Reduced quality of decisions.
  • Loss of skilled employees (cost of turnover).
  • Lower employee motivation.
In my next post, we are going to examine the different styles that people use to address conflict, mediation in the workplace and how to deal with conflict in the workplace.  In the meantime, here is a very good article, written by Jennifer Lawler http://www.entrepreneur.com/article/207196



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