Workplace Conflict Is Expensive

July 5th, 2011 - Erin Johnston

ConflictAs businesses of all sizes strive to cut costs, many overlook the greatest preventable cost of all: workplace conflict. Businesses can positively impact general productivity and revenues, by addressing workplace conflict judiciously.

Conflict in the workplace is inevitable. Often it is not uniformly defined or recognized by employers, and may even be mistaken as normal competition among co-workers. However it is most certainly not the same thing, although competition can contribute to the underlying conflict.

Many business owners and managers do not recognize the presence of workplace conflict until the issue has intensified to such a degree that nothing short of an employee resignation or termination can resolve the problem.

Meanwhile the ongoing presence of workplace discord has likely cost even the smallest employer thousands of dollars.

Ongoing conflict in the workplace costs employers in many ways: loss of employee productivity, increased presenteeism and absenteeism, and increased turnover. It is also likely that some employers experience increased health costs as a result of the stress caused by unresolved conflict. Many business owners and managers may remain blissfully unaware of the conflict until an employer is vulnerable to litigation. Revenues can also be affected as customers avoid working with the employees or representatives of businesses who demonstrate high levels of conflict or poor communication.

Some Facts About Workplace Conflict:

  • Workplace conflict is a decisive factor in more than 50% of employee departures
  • Employee turnover results in costs related to recruiting training, lower productivity of new hire, and secondary morale effects on managers, peers and subordinates
  • Unresolved, workplace issues can end up in litigation, easily costing a company $50,000 to $100,000 in attorney fees and taking 3 to 5 years to settle
  • Conflict significantly increases personal stress levels
  • The total value of lost work time due to stress is estimated to be over $1.5 billion annually

Proactive efforts to reduce the presence and impact of workplace conflict, such as employee training and the development of programs that effectively respond to conflict as it occurs, profoundly impact a employer’s bottom line.

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This entry was posted on Tuesday, July 5th, 2011 at 2:55 pm and is filed under Conflict Resolution, Employee Benefits, Team Building, Workplace & Business Conflict. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

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