The Cost of Workplace Conflict

Often, when managers consider the "costs" of conflict, they speak of costs associated with, not surprisingly, legal fees and monetary settlements and awards related to litigation.

While these costs are significant, there are numerous other financial and human costs that affect the corporate "bottom-line" long before the commencement of litigation. These include:

"Presenteeism"

When conflict erupts, employees spend extensive amounts of time (1) furthering/intensifying the conflict, (2) responding to the conflict; (3) discussing/gossiping about the conflict, and/or (4) engaging in personal strategies to cope with or minimize the adverse effects of the conflict. This is paid time, yet very little work is being performed. This is called "presenteeism" in that, unlike absenteeism, employees physically report for work but do not meet the needs or expectations of the workplace because of the conflict.

Ineffective Communication

When there is conflict in the workplace, communication amongst staff or between staff and management often becomes halted and ineffective, particularly when certain employees disengage with others and refuse to speak to them, or at best, communicate curtly and ineffectively. Such strained communication can adversely affect workplace and public safety, where clear, direct and immediate communication is of utmost importance.

Absenteeism

Workplace conflict often escalates to the point where individuals who are faced with or are forced to "witness" ongoing, unmanaged conflict take sick leave, and eventually, file for long-term disability benefits as a result of "stress-induced" illnesses such as depression, high blood pressure and anxiety-related disorders. These employees needs to be replaced; either with existing employees who have to work additional shifts, or new employees who have to be "trained-up". As a result, the organization incurs costs related to overtime, recruitment and training. During the "interim adjustment period", productivity suffers.

Difficulties with Attraction and Retention

Often the most competent, productive employees choose to resign rather than deal with ongoing workplace conflict. Their knowledge, expertise and daily contributions to the workplace walk out the door with them. When they leave, they share their experience with workplace conflict with others outside the organization. Over time, the workplace develops an "institutional reputation" for workplace conflict/dysfunction and it becomes increasingly difficult to fill vacancies or maintain a stable workforce. Workplace Threats and Violence. At the more extreme level, certain employees take matters into their own hands, and engage in acts of violence. When debriefing critical workplace incidents, employees and management often speak of a prior history of workplace conflict that had been left unattended.

Litigation Costs

Employees who remain at a conflict-ridden workplace eventually file workplace harassment complaints, human rights complaints and/or grievances under a collective agreement. Employees who choose to leave may sue for constructive dismissal, claiming an intolerable atmosphere that constitutes a "fundamental breach of employment expectations or obligations": if successful, they will be awarded damages as if they had been wrongfully terminated.

 

In order to prevent or, at least, minimize the ongoing and escalating costs of workplace conflict, it is important for all workplaces, small and large, non-unionized and unionized, to take an immediate and pro-active approach to the detection, diagnosis and treatment of workplace conflict.