What do work based conflicts cost your business?

ARTICLES > NEWS > What do work based conflicts cost your business?
By Rebecca Brown
June 8, 2021

A striking report was published last month by ACAS, documenting the cost of work based conflicts. It is estimated to be around £28.5bn every year; on average around £1,000 for every employee!

The cost is calculated by the handling of work based conflict to the organisation, for example: legal fees, employee absence and resignations.

Conflict Management Report Stats

  • It is estimated that an average of 485,800 employees resign each year because of conflict.
  • The cost of recruiting replacement employees amounts to £2.6 billion each year, whilst the cost to employers of lost output as new employees get up to speed amounts to £12.2 billion.
  • A further 874,000 employees are estimated to take sickness absence each year as a result of conflict, at an estimated cost to their organisations of £2.2 billion.
  • The majority of employees who experienced conflict stayed with the organisation and just 5% resigned as a result.
  • A slightly higher proportion of respondents reported taking time off as sickness absence (9%). However, 40% reported being less motivated and more than half (56%) reported stress, anxiety and/or depression.
  • 1 in 5 employees take no action in response to the conflict in which they are involved, while around one-quarter discuss the issue with the other person involved in the conflict. 
  • It is estimated that there are an average of 374,760 formal grievances each year. The average cost in management time of a formal grievance is estimated at £951, giving a total cost across the economy of £356 million.

ACAS Chief Executive, Susan Clews, said:

“A failure by employers to deal with conflict early can be costly to businesses and our study estimates that these costs add up to nearly £30bn a year.

Poor conflict management can also cause staff stress, anxiety or depression and impact workplace productivity. There’s a clear benefit to everyone in handling problems as early as possible.

While our main findings relate to just before the pandemic took hold, our report reveals potential for increased conflict as organisations try to adapt to new changes after COVID-19.”

Findings from the report now suggest that as industries are beginning to return to a “new normal” and employees are starting to work in an office environment once again, conflicts are likely to take place that were perhaps suppressed during the pandemic.

Conflict can quickly have a knock-on effect, leading to stress and anxiety which can impact productivity. At Businessynergy, our advice to clients dealing with any type of conflict is to act in a timely and effective manner to avoid any form of escalation.

We help organisations with all aspects of work-based conflicts and disputes. For more information on how Businessynergy can help you: https://businessynergy.co.uk/services/conflicts-disputes/

For the full report conducted by ACAS visit: Estimating the costs of workplace conflict | Acas

Further reading…

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