The cost of conflict and how to prevent it



We all know that conflict at work can impact people emotionally, including anger, regret, confusion and frustration. But it can also have very real financial implications for an organization, as illustrated in the examples below.

In one situation, what started out as healthy competition between departments grew in to bitter hostility, to the point where the two teams were not even allowed to associate with one another. Eventually neither team knew what the other was doing, which is when a very costly mistake was made: both teams ordered the same expensive piece of software, unaware their order was actually a duplicate. This is when the company decided it was time to step in to resolve the issues.

In another example, one employee became so emotionally affected by conflict that, on the advice of her doctor, she took extended stress leave. It was almost two years until she felt able to return to work. During this time the company had to hire two new employees to cover her responsibilities in her absence. The cost to the company was huge: not only the continued pay the employee received while on stress leave, but also the cost of two new employees.

Conflict also has hidden costs. According to a US study in 2008 commissioned by CPP Group, the average employee spends 2.1 hours per week dealing with conflict. This equates to lost productivity when little to no real work is done.

If not dealt with early enough, as conflict festers the company may need to take drastic measures including restructuring of reporting structures or even of the physical workspace.

The financial impact of excessive stress can include extended stress or sick leave, as well as associated health benefits such as Employee Assistance Programs (EAPs) and counselling. If employees choose to leave a workplace because of conflict, the cost of turnover can be significant. According to a 2005 study by Warren Shepell, the total value of lost work time due to stress in Canada is approximately $1.7billion per year.

Imagine also the loss of creative ideas, quality decision making and productive teamwork.

If left unchecked, conflict may also draw the attention of customers and clients who, in turn, may choose to take their business elsewhere.

The longer conflict continues, the greater the financial impact to all concerned—employees, teams and organizations. Resolving conflict as quickly as possible will therefore limit both the emotional and financial damage. Preventing it in the first place though is far less costly.

As a manager, how can you help prevent conflict becoming damaging?

  • Deal with conflict immediately: avoid the temptation to ignore it. However, if the situation escalates or you are upset, allow yourself a brief moment to collect your thoughts (take a short break, go for a walk or just count to ten). This will help you think more clearly, be more articulate and appear less emotional
  • Be open: if people have issues, they need to be expressed immediately and not allowed to fester
  • Practice clear communication: articulate thoughts and ideas clearly
  • Practice active listening: focus on what people are saying, paraphrase, clarify and ask questions
  • Focus on building positive relationships
  • Focus also on yourself: think about how you can change your behaviour to eliminate conflict at work. Lead by example
  • Separate people from issues: don’t allow conflict to become personal. Stick to facts and issues
  • Focus on actionable solutions: don’t dwell on what can’t be changed
  • Encourage different points of view: encourage honest dialogue and the expression of feelings
  • Always look at things from both sides. Ask people for their point of view
  • Don’t look for blame: encourage ownership of the problem and seek solutions
  • Be respectful: treat colleagues as you would like to be treated
  • Be trustworthy: live up to your word, even when difficult. Once trust is broken it is almost impossible to regain
  • Keep team issues within the team: talking outside allows conflict to build and fester, rather than being dealt with directly
 

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