Blog: The real costs of conflicts in the workplace and cost-effective solutions

My third blog in the series about mediation was always going to be about conflict in the workplace – and where mediation fits in as a solution to such conflicts. And then, as if by magic, ACAS releases a fascinating report called ‘Estimating the costs of workplace conflict’  and it practically wrote my blog for me.

The ACAS report really is a good read.  Fortunately, I have read so that you don’t have to!  The figures involved are startling, but not, I would say, wholly surprising.

The cost of conflict

The main headline is that the estimated total cost to UK organisations of conflict at work is £28.5 billion annually (which equates to more than £1000 per employee).  Nearly 10 million employees report that they have experienced conflict at work with close to 5 million reporting that conflict caused them stress, anxiety and/or depression. 900,000 took time off, 500,000 resigned and 300,000 were dismissed.  Those are some pretty big numbers.

The costs themselves can be broken down into four main categories:

  1. Costs of resignation, sickness absence and presenteeism (ACAS defined this as ‘working whilst ill’)
  2. Costs of informal resolution (including either internal or external mediation)
  3. Costs of formal procedures – grievances, disciplinaries, appeals etc.
  4. Costs of litigation (including management time, legal fees and compensation/settlement agreements)

There are also the ‘hidden’ costs which, to be fair, are much harder to put a figure on. These tend to be impacts to well-being, workplace culture, and the costs to wider society.

It is very clear from the report that whilst there are costs to using informal resolution, the costs to an organisation of conflict take a major hike upwards when an employee resigns or is dismissed.

The ACAS report echoes my comments in my first blog on mediation; that workplace relationships are much harder to save when formal procedures have been instigated (by which I mean grievances, disciplinary, sickness and poor performance processes).

Conflict in the workplace

Conflict theory is a fascinating topic.  For what it is worth, in my experience, where you get humans, you get conflict. It is just a fact of life (and the workplace) and not something that should be necessarily viewed negatively or an indication that there is something wrong with your organisation. Much good can come out of conflict, particularly where it is resolved quickly in the form of stronger workplace relationships, creative approaches to building solutions etc. Conflict isn’t confined to the typical manager/employee relationship, it arises  between peers and at both senior management and director levels.

Mediation is rarely used but highly successful when it is

It surprised me that only 5% of employers indicated that they had undertaken workplace mediation in order to resolve their conflict. This tends to suggest that most organisations move from informal resolution (i.e. talking to your manager or maybe HR) straight to grievances/disciplinaries without considering mediation. This is a missed opportunity as in  74% of cases using a mediated approach, this had in fact resolved their workplace dispute. That is a pretty good success rate by anyone’s reckoning. Obviously, there is a cost to the workplace for mediation (whether internal or external), but if it saves a workplace relationship, that has wider implications for a better workplace AND it saves money in the long-term.  That’s a no-brainer to me. It’s arguable that mediation costs would be a ‘good investment’ for businesses as they may reduce the longer-term negative impacts of workplace conflict.

Tips for reducing the costs of conflict in the workplace

Whilst you are not always going to have a conflict-free workplace, these are my top tips for reducing the costs to your organisation:

  1. Invest in management training that trains your managers to be people managers.  Too often people are promoted because they are good at their jobs – not because they are good with people. When I was a Saturday girl at Boots back in the 1980’s, their policy was that only pharmacists could be store managers. I have to tell you, they were great pharmacists, but they were not good managers.  ACAS talks about managers needing ‘core people sills’ in order to have quality interactions with their staff.
  2. Ensure that issues are dealt with as quickly as possible – either with informal resolution or through using poor performance procedures where there are performance issues. All too often managers fail to address performance issues and then ending up ‘managing someone out’ or they start a process far too late and get accused of bullying, harassment or discrimination.
  3. Ensure your organisation is ‘conflict competent’. By this I mean that managers are properly trained in conflict resolution and how to handle difficult conversations. Also consider using mediation as it both works and it avoids that jump straight to grievances and disciplinaries. (see my previous blog for details of the benefits of mediation)
  4. Ensure employees have a voice and representation. Lack of communication or lack of avenues to raise issues is a major source of conflict in any organisation.

Finally, it is the case that conflict has been suppressed during the pandemic as people had other things to worry about.   As people return to work after a lengthy furlough period or things just return to a more normal situation, conflicts are likely to re-emerge. Issues such as restructuring, economic pressure and uncertainly, the fact that some organisations have furloughed staff on 100% pay whilst other employees have worked their socks off will leave many people feeling unsettled and sometimes aggrieved.  I anticipate a high volume of conflicts in the coming 6-12 months.

Do you feel a workplace conflict bubbling that may benefit from mediation? I’d be happy to have an exploratory conversation.  Please email me: or call our office on 0117 325 0526.

Next time I am going to write about the types of workplace issues that work best with mediation – and those that don’t.