Unfortunately conflict within the workplace is inevitable. With an increase in diversity within workplaces in terms of  personalities, needs and expectations, there becomes an increase in potential workplace conflict. Consequently, it is important to have a ground understanding of the potential issues that can arise within conflict in the workplace and more importantly the cost this can have on businesses and employees.

Before going into the consequences of conflict, it must be said that a little bit of conflict, as long as it’s not disrupting workplace satisfaction and decreasing productivity, can be a good thing. It can foster healthy workplace attitudes and provide opportunities for creativity, collaboration, and improvement. However, let it be known that this conflict needs to be restricted to a minimum, in order to avoid  potential organisational and interpersonal costs, which are discussed in detail below.

The most obvious consequence of conflict in the workplace is the cost of productivity and morale of employees. When conflict arises at work, the amount of time spent on resolving the issue takes time away from employees designated tasks and thus signifies wasted work opportunities and decreased  productivity. In addition, the morale of employees and surrounding bystanders are also affected negatively by conflict and thus workplace satisfaction is reduced. This can also lead to increased turnover of staff in extreme cases. In a study run by CPP Inc. commissioned on workplace commitment, U.S. employees were found to spend on average 2.8 hours per week dealing with conflict in 2008. This amounts to approximately $359 billion in paid hours, or the equivalent of 385 million working days. Meanwhile surveys by The Centre for Creative Leadership and Eckerd College in St. Petersburg Florida, indicate that managers spend between 20-40% of their time dealing with conflict.

The CPP study also showed that 25% of employees said that avoiding conflict led to sickness or absenteeism. Likewise, nearly 10% reported that workplace conflict led to project failure while more than a third of employees  said that conflict resulted in someone leaving the company. This can cause tremendous financial losses for a company despite being something that can be easily managed and resolved. Increased number of sick days has an obvious financial burden on an organisation including the cost of finding people to cover shifts and paying for absent sick employees.

In addition to absenteeism, research shows that employees have an increased likelihood of experiencing a myriad of mental and/or physical health disorders as a result of unresolved workplace hostility. Furthermore, the study showed that employees who were involved in negative interactions then had reduced employee performance. This directly impacts on the organisations potential for profit. The effect of workplace conflict can also negatively contribute to the company’s corporate image and reputation.  Workplace conflict that’s left unchecked can create a contentious workplace climate that permeates the entire organisation with negative ‘characterisations’ which can put off potential customers from dealing with the organisation. This again, limits potential revenue.

In addition to the direct costs of dealing with conflicts, opportunity costs also arise. The opportunity cost signifies the lost opportunity of an employee who is unable to provide value to the company through focusing their energy on creation and innovation, because their time is spent attempting to resolve a conflict issue. Employees are fixated so much on fighting and winning the battle, they fail to realise that during this time they are causing an opportunity cost to him/herself and their company. Continuity costs are also another factor to take into consideration. These costs are associated with being stuck in the past and include the toll that’s taken on loss of relationships and community.

As indicated from this research, a workplace that suffers from ineffective conflict management has extensive costs to the organisation such as decreases in productivity, organisational health and a hostile working environment. Consequently focusing on minimising conflict can help decrease the time and energy that’s spent dealing with conflict and save an organisation from incurring significant and unnecessary costs.

If you or your organisation feel that you are suffering from organisational costs due to ineffective conflict management or have a desire to further your knowledge on managing difficult behaviour in the workplace, sign up to VM learnings latest 1 day program: CLEAR Choices. CLEAR Choices  aims to provide clients with more effective ways to resolve and avoid conflict in the workplace, so that they can focus their time and resources on growing and improving their organisation. For further information on the program, feel free to email us on enquiries@vmlearning.com.au or call 61 (07) 3215 8888. Otherwise feel free to look at the program outline on our website by clicking here