Unmasking the £28.5 Billion Workplace Conflict Puzzle
Image credits: Afif Ramdhasuma / Unsplash
‘Mastering Conflict’ Event; Transform conflict into collaboration in leadership, conflict isn’t just a challenge; it’s an opportunity.
At the heart of every conflict lies a chance to grow — but it requires the right approach, the right skills, and the right mindset.
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Workplace conflict, an age-old issue, has recently been spotlighted for its financial implications on the UK economy. A comprehensive 2021 report by Acas revealed a staggering annual cost of £28.5 billion due to workplace disputes, equating to just over £1,000 per employee or nearly £3,000 for each person involved in conflict situations. This figure unveils the significant, yet often overlooked, economic burden that workplace disputes impose on businesses.
In the span of a year (2018-2019), an estimated 9.7 million employees encountered some form of workplace conflict. Surprisingly, a majority of these employees choose to stay with their organisation, with only 5% resigning due to conflicts. However, the impact on their well-being and productivity is profound, with 40% reporting decreased motivation and over half experiencing stress, anxiety, or depression.
The financial repercussions for employers are multifaceted. The cost of replacing employees who resign because of conflict is around £2.6 billion annually, with an additional £12.2 billion lost as new hires acclimate to their roles. Sickness absences related to conflict further cost organisations £2.2 billion. Presenteeism, where employees continue to work while suffering from conflict-induced stress or mental health issues, translates to a productivity loss valued between £590 million and £2.3 billion.
Efforts to address and resolve conflicts also come with their own price tags. Informal discussions to tackle conflicts cost UK organisations an estimated £231 million each year. Workplace mediation, though participated in by only 5% of respondents, costs around £140 million annually but has a significant success rate, with 74% of cases being fully or largely resolved.
Acas report the critical need for businesses to adopt more proactive and effective conflict management strategies. Investing in early resolution processes, employee support systems, and a culture that promotes open communication and mediation could significantly reduce costs. Moreover, fostering a positive workplace environment where conflicts are addressed promptly and constructively can enhance employee well-being, motivation, and productivity, contributing to the overall health of the UK economy.
The £28.5 billion annual cost of workplace conflict is not just a number—it's a wake-up call for organisations to rethink their approach to conflict management. By prioritising the well-being of their workforce and adopting strategies to mitigate and resolve conflicts efficiently, businesses can not only save on costs but also create a more productive, and resilient workplace.
A leader’s role is to serve as a stabilising presence during conflicts, steering their teams through challenging periods. At Versed, we support leaders going through period intense conflict. If you would like to learn more about Versed's 1:1 conflict coaching, click here.
