How to Avoid the High Cost of Conflict

Conflict costs – a lot.

Every day, workplace conflict drains productivity and morale from American companies. The drama usually plays out on small stages. Research indicates most workplace conflict is rooted in ego-driven disputes rather than in large-scale clashes of mission and strategy.

Typically, the problems arise from skirmishes among the ranks, triggered by personality differences, stress and heavy workloads accompanied by thin resources, rather than from the clashes of titans made famous in books and movies.

Litigation is the most clear-cut financial consequence of unresolved workplace conflict. One regional mediation center (1) estimates that 50% of employers have been sued by an employee. With each legal action, a company faces tens of thousands of dollars in legal fees, plus the cost of hours that staff and executives must spend in depositions, legal consultations, mediation or court.

Other direct costs are less dramatic but more widespread.

CPP Inc., the company that publishes Myers-Briggs and other personality and performance assessment tools, conducted a broad-scale study (2) of workplace conflict and its impact, and found that 85% of workers experience conflict directly or indirectly at work. In a given week, U.S. workers lose 2.8 hours of productivity from coping with conflict on the job.  About a quarter of employees have witnessed on-the-job conflict, and the same number have either been sick or called in sick due to conflict. 

The CPP study estimated the total of working days lost in the US due to conflict to be 385 million annually. 

Out-of-pocket costs add to the lost time. Only those directly involved actually know the expense of fixing a problem or compensating a client or customer for a conflict-related mistake or failure. 

Other indirect costs – like reductions in morale or the excessive intra-office chatter that often accompanies conflicts -- are deceptive because they are difficult to measure, but they’re widely felt.

About a quarter of Americans attribute work absence to either a workplace conflict or a conflict-induced illness. A study (4) by Health Advocate, a consulting firm that mediates insurance and healthcare issues on behalf of consumers, found that stress – with workplace conflict being one contributor – causes a million Americans a year to take time off from work, at a cost of $602 per employee.

A silver lining can be found, however, in the nature of most workplace conflict: If it erupts between two people, chances are it can be resolved between two people. Programs such as the Creighton University Master's In Negotiation and Conflict Resolution approach conflict as a key professional development skill for corporate leaders and as an opening for organizations to convert a common negative dynamic into a positive force.

Researchers and consultants agree that disarming workplace conflict is less about avoiding it and more about reframing it as a win-win-win: a win for each of the two involved individuals and for the organization.

Conflict resolution, though, doesn’t have to be a win for someone or a draw. It can be seen as a constructive process that helps people understand each other’s point of view or opens the way to fresh thinking about a topic or problem. 

Accomplishing a constructive resolution starts with shared values and a shared mission. Those two factors realign the conflict from a head-on process to a side-by-side journey that mitigates the costs of an escalating dispute.