Listen to this article
Conflict can arise within any organisation, no matter how harmonious it may be. In industries
such as policing, family services, health and some customer service areas the risks of
personnel displacing or acting out the conflicts or tensions they face on the job are
significant. This is known as parallel processing. (Kennedy, AIM).
How much does workplace conflict cost your business? If you can’t answer that question,
you are not alone – it’s a cost that organisations rarely measure. David Liddle (2021),
reviewing recent research, however, suggests that they probably should. A report published
by Acas, ‘Estimating the Cost of Conflict’, suggests the UK’s conflict bill adds up to a
staggering £28.5bn per year; that’s an average cost of £1,000 (AUD $1885.69) per
employee, and importantly £3,000 (AUD $5654.39) for each employee involved in the
Of course, it’s not just the pure financial cost of conflict (legal fees, compensation awards,
settlement agreements) that need to be taken into account. There are a significant
organisational and human costs too.
The hidden costs of conflict
The process of recruiting and training new employees is not only time-consuming but costly. In fact, estimates show that the cost of replacing an employee can be as much as 50 – 60% of their annual salary. Unfortunately, workplace conflict is a substantial contributor to employee turnover and staggeringly, staff turnover within the first 12 months of employment.
On average, every Australian employee takes off between 8-9 unscheduled days of leave each year. Raleigh (2021) notes that absenteeism related to conflict is more like an average of 21 days. Employees who feel unsupported at work or are facing conflict which they don’t expect to be resolved effectively, are much more likely to call in sick. The snowballing effects of absenteeism include loss of productivity, increased workloads, low morale and poor work quality.
Lost productivity (also known as presentism)
Although difficult to calculate, lost productivity is perhaps the largest hidden cost of conflict in the workplace. Losses in productivity arise for a range of reasons, from disengaged employees who underperform, to time wasted by managers in conflict management scenarios, to absenteeism and staff turnover. Raleigh (2021) determines that of the 56% of employees involved in conflict, 85% have the potential to exhibit presentism as they don’t have time off. This data is reaffirmed by the self-reported effects of presentism on productivity. The Queensland Government research shows over 65% of employee performance problems are the result of strained relationships rather than a lack of skill or motivation.
Cost of informal resolution
According to Raleigh (2021) 49% of respondents did not attempt any in-house resolution, and of the respondents who discussed the conflict issue with their Manager, HR or Trade Union representative only 43% described their incident as either fully or largely resolved. Interestingly, 74% of respondents participating in external formal mediation stated having their conflict fully or largely resolved (Raleigh 2021).
Cost of Formal procedures
Where conflict spiralled into formal procedures, costs were more than three times those associated with informal resolution (Raleigh 2021).
Common Conflict Themes
There are often behaviours which inadvertently create dissention in the workplace. These can be circumvented by awareness and addressing these when they come to you attention.
Skipping the Chain of Command
Marlene Chism (Smart Brief, 2021) suggests that team members often go behind their Managers back to influence others (Either higher up or other colleagues). It is important to address this directly with the person involved, and also the recipient of the influence, to encourage transparency.
Organisational change can be a precursor to employees feeling insecure. This according to Marlene Chism (Smart Brief) can be due to a promotion, a new boss or company merger. Insecurity encourages employees to seek reassurance. Senior Managers might feel that new leaders are seeking advice too frequently. In this situation the temptation can be for telling, rather than investing time in coaching (Smart Brief).
It is common for employees to be chosen for their performance success and technical expertise. A common complaint heard by Marlene Chism (Smart Brief) is Managers accused of bullying behaviour. This may not be highlighted by performance indicators. How to navigate this can be challenging. Marlene Chism from Smart Brief suggests two questions to consider before a discussion with your Manager:
- What is the person doing that they should not be doing?
- How does this behaviour affect our culture, teamwork, productivity and results?
When you have these answers, you will be in a better position to address the behaviour rather than the person.
Models of Conflict
One essential quality that all managers need to develop is a strong sense of self-awareness. Managers need to acknowledge their own biases, trigger points, and preconceptions, otherwise it’s difficult to rise above them to identify what the actual problem is.
This also means being aware of how you react, both physically and emotionally, to situations involving conflict. According to the Thomas Kilmann Model of Conflict, the most common responses to approaching conflict include:
- Avoidance: When someone recognizes conflict in a situation and decides to disengage from the problem
- Accommodation: Also referred to as yielding, it occurs when a conflict is resolved, but an individual’s needs aren’t met. If an individual is consistently accommodating, resentment may affect the relationship.
- Compromise: When two parties of equal power agree to a resolution
- Collaboration: Working with others to find a solution in which everyone has their needs met
Avoiding a conflict, for example, might be effective when the issue is minor, but it isn’t prudent when a major conflict arises. Each response has a place, but you need to understand your reactions in the context of which method is most effective.
Strategies for Conflict Resolution in the Workplace
Marlene Chism, from Smart Brief concludes that conflict in the workplace is inevitable. Many leaders see conflict as problematic, whereas conflict is not the problem, mismanagement often is. In fact Dr Mark Fotohabadi from the Forbes Council agrees and suggests that successful conflict resolution can empower organisation with renewed culture to reach optimal performance.
How to set the scene for conflict resolution
Even though workplaces are unique universally, Dr Fotohabadi explains that when people’s personalities, assumptions, histories and culture occupy the same space it is inevitable they will clash. How organisation deal with these conflicts matter.
Steps that will help to maximize potential success of conflictual issues include:
Being prepared is key to conflict resolution confidence. Resolving conflict is only the latter half of the battle. Preparation should involve collecting information surrounding the dispute, and linking into consideration of potential biases, cultures, and assumptions.
Listening to all parties without jumping to solutions too quickly is also helpful to limit bias and assumptions. Active listening involves listening with engagement and repeating key elements of what has been said to ensure that both parties have agreed understanding.
Being impartial is a crucial element to conflict resolution. In leadership you should not display any opinion which favours one party over another.
After hearing the conflict background from all parties you can then move to a meeting with all parties to the dispute present. The Indeed Editorial Team in fact suggest this should be on neutral ground (perhaps a separate meeting room) and also have present an independent party who can separate facts and feelings.
Dispute Meeting Strategies
Set the tone by exploring the purpose of the meeting, and your role as an impartial facilitator. Dr Fotohabadi adds that all parties need to be heard confidentially, so the parameters of confidentiality is best explained in detail. Then all parties are given an opportunity to explain the conflict from their own perspective. When you have a sense that all parties have been heard equally, you can then move to resolution options.
Optimal Resolution Success
The Indeed Editorial Team describe that brainstorming potential solutions be a collaborative experience rather than solutions imposed. Parties sharing their thought is key to success. If parties have a sense that solutions are imposed they will potentially disengage. Then when a particular solution is agreed to, it is important to get acknowledgement from each party.
When these strategies are unable to resolve the conflict.
When conflict remains unresolved a referral to Access Wellbeing Services (AWS) offers a value for money alternative to costly legal avenues for all parties.
Conflict Management processes may be of a facilitative, advisory, determinative nature or, in some cases, a combination of these. AWS utilises the facilitative model of conflict management and offers Mediation. The role of the Mediator is to assist the parties to identify the pertinent issues and then to process endeavours to reach an agreement on some or all of the issues. When mediation is deemed inappropriate, others possible solutions will be offered.
For enquiries regarding AWS Conflict Management Service please call AWS on 1300 66 77 00.
Chism, M (2021). Common workplace conflicts and their solutions. Smart Brief.
Fotohabadi, Dr. M (2021). Becoming Part Of The Solution: The 5 Rs Of Optimal Organizational Culture, Forbes Business Council:
Indeed Editorial Team (February, 2021). 5 Effective Conflict Resolution Strategies.
Kennedy, Dana. Australian Institute of Management:
Kilmann, R. H. (2021) Thomas-Kilmann Conflict Model:
Liddle, David (2021). Opinion:
Queensland Government (2020) Updated Web page:
Raleigh, N.C., (July 29, 2021) (GLOBE NEWSWIRE) — Workplace Options (WPO), a global provider of integrated employee wellbeing solutions:
https://www.acas.org.uk/new-acas-report-estimates-workplace-conflict-costs-employers-nearly-30-billion-a-year key findings from its wellbeing study.