Gill Dix, head of workplace policy, at the Advisory, Conciliation and Arbitration Service (Acas), discusses the true cost of conflict in the workplace, and why handling it quickly and correctly is so important for employers and employees alike A lmost ten million people experience conflict at work every year. It can manifest in different ways, including: ● minor disagreements between colleagues ● fuller relationship breakdowns ● legal procedures including employment tribunal claims. sense of morale in a team, presenteeism (employees continuing to work when unwell) or unexplained sickness absence and resignations.
information on these top line figures and how they’re calculated is set out in Acas’s research paper, Estimating the costs of workplace conflict . The findings show the value of businesses (along with the support of organisations such as Acas) urgently resetting the dial on the way they perceive conflict in their workplace and how they manage it.
Poorly handled conflict comes at a heavy cost to UK business: £28.5 billion each year – the equivalent of more than £1,000 for every employee, or just under £3,000 for every individual involved in conflict. More
Some effects are less visible, like conflict impacting on the underlying
The cost of conflict explained at a glance Cost of resignation, absence and presenteeism
£11.9 billion £2.2 billion £0.59 billion £14.7 billion £0.12 billion £0.14 billion £0.25 billion £0.36 billion £2.0 billion £10.5 billion £12.8 billion £0.28 billion £0.26 billion £0.23 billion £0.77 billion £28.5 billion Annual cost
Resignations Sickness absence Presenteeism Total Cost of informal resolution Informal discussion with human resources (HR), line manager and / or unions Workplace mediation Total Cost of formal procedure Employee grievances Disciplinary cases Disciplinary dismissals Total
Cost of litigation Management time Legal representation Compensation Total Total cost of conflict
It’s important for organisations to engage early with all areas of conflict.
Conflict is a natural part of the workplace relationship. It’s when it’s poorly handled, or left to escalate that costs begin to become more problematic. In the simplest terms, costs in the early stages are relatively small, but begin to rise
where conflict resolution is sought via formal procedures including disciplinary procedures, investigations or formal grievances. These are important stages in any organisation’s conflict management approach, since procedures offer a level of
certainty about how to tackle any conflict which has been too difficult to resolve informally. However, we know only too well that in some instances, formal procedures kick in as the first means of addressing the problem, rather than as the final resort.
| Professional in Payroll, Pensions and Reward | February 2023 | Issue 87 46
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