Conflict—that is, conflict which is unrecognized or ignored—is costly; in fact, it could be robbing you blind.
When many people talk about the costs of conflict, they mention things like lawyers, court costs, and time lost in meetings, and they are right; a rather small court case can involve costs running into six figures, and trying to stay out of court can also be expensive. But, most businesses don’t realize how much “normal” conflict—the day to day disagreements, misunderstandings and frustrations that are a part of everyday life—are costing them.
Taking a positive, proactive approach to conflict can save you money, and sometimes actually make you money. However, conflict which is left on its own is like dry-rot; it grows and it’s destructive.
Many managers will fail to recognize much of the conflict that exists in the workplace, because for the most part it remains internalized or manifests itself in other ways. It is conflict, nonetheless—and it impacts relationships, performance and profitability.
Conflict exists whenever there is disagreement or where there are unrealized expectations. It could be a disagreement with company policy, a co-worker, or a manager’s tone of voice. It could be a perception of being unappreciated, or that someone else is over appreciated. I have heard it said that ambiguity—where employees are forced to guess about expectations and attitudes—is actually the largest single source of conflict in the workplace. Sometimes this hidden conflict will grow into an overt conflict between people, but often they lead to other problems not immediately associated with conflict: absenteeism, lower production, employee theft, or turnover.
In a recent study attributed to CPP, Inc., it was estimated that “U.S. companies spend more than 2.8 hours per week addressing workplace conflict, which equates to approximately $359 billion in paid hours in 2008.” The study further reported that 33% of employees have suffered “personal injury or attacks” while resulting in illness or absence from work for 22% of employees. In the UK, the Centre for Effective Dispute Resolution (CEDR) estimated that conflict costs companies £33 billion every year.
And I don’t know that these figures even begin to include losses due to undetected conflict. Just consider the cost of turnover due to unhappy employees: I’ve seen estimates that turnover costs range from 75-150% of the employee’s annual salary. And here’s the thing: all employees leave due to some kind of conflict. Granted, some things you can’t change (like the need to relocate for non-work reasons, career changes, etc.); however, many things you can change, or at least talk about. Then there are those who don’t leave—but spend their time quietly poisoning everyone in the office with gossip and complaining.
What about the work that suffers because of bad attitudes, communication failures, or ambiguity about what or how things should be done? What about illness due to job stress?
The question that business owners and managers need to ask themselves is this: How much is undetected conflict costing me? The follow up question should be, What can I do to reduce this negative conflict? Survey results indicate that only about 1/3 of managers feel able to deal with conflict; and employees’ view of managers’ abilities is even lower.
The good news is that studies show a correlation between a reduction in negative conflict (not all conflict is bad) and training in how to handle conflict.
Now, rather than get stuck in thinking that training can merely reduce the hidden costs related to conflict, what if conflict training could actually produce positive benefits?
What is conflict training worth to your organization?
