The business and human cost of conflict at work

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Adrian Wakeling, Acas senior policy adviser

Adrian is a senior policy adviser at Acas and is part of a team responsible for informing the future strategic direction of Acas and influencing the wider debate on the value of employment relations.

New research on 'Estimating the costs of workplace conflict' published last week by Acas found that conflict involving individuals at work costs UK businesses an estimated £28.5 billion a year. 

As Acas's head of research Cat Smith explained in her blog on the workplace conflict report, it's the very first time that the cost of workplace conflict has been systematically estimated, and broken down into its component parts. Some of the findings should make us think again about how we manage and learn from conflict.

The cost of informal resolution

Things like having a quiet word with your line manager – make up a small part of the total (£250 million). This inevitably begs the question: why do we not talk sooner to resolve problems?

The cost to the economy of resignations

The cost to the economy of resignations is huge, at £11.9 billion. Many of the estimated 485,000 people who resign do so as a result of stressful disciplinary procedures and others resign without anyone spotting there was any problem.

It's worth remembering that the biggest impact of conflict is on mental wellbeing (around 5 million employees reported stress, anxiety and/or depression). My guess would be that includes employees, line managers and senior staff.

The cost of the legal involvement

Acas advisers often report that employers are most anxious to avoid the legal stage in any dispute, but this cost is relatively low (£770 million), compared to the total cost of formal internal procedures (£12.8 billion).

Our analysis shows that the ideal time to act, at least from a cost perspective, is before you get to the formal stage.

Conflict is about people

Perhaps the most important statistic in 'Estimating the costs of workplace conflict' found that almost nearly 10 million people experience conflict at work each year. This ranges from relationship breakdowns with colleagues or managers right through to tribunal hearings and everything in between, including presenteeism and sickness absence.

If the pandemic has taught us anything it's that we all have our own story to tell – whether it's about shielding, childcare, working on the front line or being furloughed.  

To hear and understand these stories takes you a long way towards preventing many forms of latent conflict from rising to the surface; which is why the role of line managers is so critical. As the report highlights: "'conflict competence' is an essential ingredient in good management and it has a positive impact on organisational effectiveness and performance."

However, not all conflict can or should be managed away, no matter how skilled your managers are.

Conflict is both good and bad

This brings us to the paradox at the heart of how we think about conflict, which often prevents us from learning from it as well as attempting to manage it. This is because conflict can be both a force for good and bad.

Bad conflict

'Bad conflict', like sexual harassment should be managed and all attempts made to avoid it. This includes having the right policies in place, as well as promoting the right values. But if employment law is broken then employees have a right to seek redress and this cannot be seen as inherently bad.

In an ideal world, employment law acts as a safety net but we live in the real world and enforcement is a critical part of natural justice.

Good conflict

'Good conflict' can help challenge prevailing thinking or management practice. It is the kind of conflict that we should be informed by. For example, there are some significant changes we would all like to see in UK workplaces – particularly around equality and diversity.

The need for these changes has been re-enforced by the unequal impact of the pandemic, which was particularly hard for ethnic minorities, women and carers. Cultural change often takes time and conflict can offer reminders of what still needs to be achieved.

The best way to spot the signs of bad conflict, and channel good conflict is through the use of effective voice mechanisms – so that people are able to have their say without resorting to formal action or taking sick leave.

If this new report does not make you take conflict seriously, nothing will

The analysis, undertaken by Professors Peter Urwin and Richard Saundry, was based on data collated by the CIPD pre-pandemic, but it has some important lessons for us all as we attempt to rebuild and/or readjust our working lives.

The report says that conflict was "suppressed during the height of the pandemic" – and suggests that increased homeworking and a heightened sense of solidarity may be contributory factors.

It's reasonable to speculate that conflict is on the way back. This is certainly one of the findings of separate research carried out by Professor Richard Saundry into 'The impact of COVID-19 on employment relations in the NHS' in HR magazine.

It's also backed up by analysis of our helpline data which indicate that calls concerning disputes dipped significantly during the first lockdown, remained suppressed, but are on the way up again.

It's in everyone's interest to take conflict seriously because it's always telling you something about an individual's experience of work, a manager's skills and an organisation's core values.

For me the secret is to reflect on, and analyse, incidents of conflict in UK workplaces from the earliest 'latent stage', right through to formal and legal resolution processes.

The challenge is to decrease the level of formal conflict by intervening early, to put it on the agenda at senior management levels and to promote the value of so-called soft management skills.