The Cost of Unresolved Workplace Conflict

Consider this example…

Assumptions (all on the conservative side):

    • Two professional employees @ $40,000/yr each.
    • Engaged in a conflict that goes unresolved for 4 weeks.
    • Both parties waste 2hrs/wk on the conflict (hallway discussions, distractions, etc.).
    • Other conservative estimates for the cost of reduced decision quality, etc.
    • Conflict eventually addressed by redesigning the work flow so that the employees do not interact on a regular basis.

This simple conflict could cost the business a staggering $50,000-$60,000!

How much does unresolved or poorly addressed conflict cost your business?

Look at these amazing statistics:

“Unresolved conflict represents the largest reducible cost in many businesses, yet it remains largely unrecognized.”

– Dana, Daniel (1999). Measuring the Financial Cost of Organizational Conflict. MTI Publications and Slaikev, K. and Hasson, R. (1998). Controlling the Cost of Conflict. Jossey-Bass

 “78% of managers are suffering from work-related stress, 52% have experienced harassment, 46% have seen an increase in conflict at work.”

– Roffey Park [online], Failure to manage change heightens stress, harassment and conflict at work, survey reveals, Jan. 05

“Employees who rate their managers as ‘sensitive’ miss an estimated 3.7 days of work, whereas employees whose managers are rates as ‘non-sensitive’ miss approximately 6.2 days of work.”

– MacBriade-King, J.L., and Bachmann, K. Solutions for the stressed-out worker. The Conference Board of Canada,1999

“The math isn’t complicated. A complaint that escalates to a lawsuit can easily cost $50,000 to $100,000 and take three to five years to settle. It doesn’t stop there.”

– Taylor, Robin,Workplace tiffs boosting demand for mediators. National Post Mar. 17, 2003

“According to a nationwide study, the average jury verdict in wrongful termination cases is over $60,000 and companies lose 64% of the cases.”

– Bureau of National Affairs, Without Just Cause: An Employer’s Practical Guide on Wrongful Discharge, 1998

“Corporations that have developed collaborative conflict management systems report significant litigation cost savings: Brown and Root reported an 80% reduction in outside litigation costs, Motorola reported a 75% reduction over a period of six years, NCR reported a 50% reduction and a drop of pending lawsuits from 263 in 1984 to 28 in 1993”

– Ford, John, Workplace Conflict: Facts and Figures, [online] Mediate.com website, July 2000

“Chronic unresolved conflict acts as a decisive factor in at least 50% of departures. Conflict accounts for up to 90% of involuntary departures, with the possible exception of staff reductions due to down sizing and restructuring.”

– Dana, Dan, [online] The Dana Measure of Financial Cost of Organizational Conflict, 2001

“A team-member’s commitment to the team and the team mission can decrease if intra-team conflict remains unresolved. …if unhealthy conflict goes unresolved for too long, team members are likely to leave the company or use valuable time to search for alternatives.”

– Barnes-Slater, Synthia and Ford, John,[online] MGH Consulting,Measuring Conflict: Both The Hidden Costs and the Benefits of Conflict Management Interventions, LawMemo.com, 2005

“Tension and stress reduce motivation and disturb concentration. A loss of simple productivity of 25% (doing things other than work related activities, such as discussing the dispute, playing computer games, finding reasons to get out of the area) reduces an average work week to fewer than 20 hours…”

– Cram, James A. and MacWilliams, Richard K.[online] The Cost of Conflict in the Workplace, Cramby River Consultants, date unknown

In a study of 50,000 Canadian employees nationwide Health Canada found that “the greater the number of sources of stress reported in the social environment at work, the greater the likelihood of reporting more than 10 days off as a result of ill health.”

– Health Canada, Workplace Health System,no.3, 1998

“Employees who report the following sources of stress are more likely than others to be absent for six or more days…interpersonal relations; job control; and management practices”

– Health Canada, Canadian Fitness and Lifestyle Research Institute. Workplace Health System, no.3.1998