The cost of workplace conflict: employee wellbeing, organisational effectiveness and the pandemic

ACAS estimate that on average workplace conflict costs UK employers £1,000 per employee per year; from 2018 to 2019, 9.7 million people experienced conflict at work; and over half of these individuals suffered stress, anxiety or depression as a result. ACAS highlight the link between employee wellbeing and organisational effectiveness and recommend investment in effective and early resolution designed to build positive employment relationships.

Introduction

The ACAS report, Estimating the costs of workplace conflict was published on 11 May and draws on a 2019 Workplace Conflict Survey conducted by the Chartered Institute of Personnel and Development (CIPD).

Key headlines

• 9.7 million people experienced conflict in 2018 to 2019, including either an isolated dispute or incident of conflict; and/or an ongoing difficult relationship over the 12 months prior to the survey.

• The estimated average annual cost of conflict to UK employers is just over £1,000 per employee.

• More than half of employees who experienced conflict reported stress, anxiety and/or depression.

• 40% of employees who experienced conflict reported being less motivated.

• While the vast majority of those who suffer from stress, anxiety and/or depression due to conflict continue to work, ‘presenteeism’ has a negative impact on productivity with an annual cost estimated between £590 million and £2.3 billion.

• Sickness absence resulting from workplace conflict is estimated to cost UK employers £2.2 billion each year.

The Report also referred to anecdotal reports and research which suggests that conflict was suppressed during the height of the pandemic and that conflict will be more likely as organisations adapt to a new normal and problems suppressed during the crisis start to rise to the surface, requiring effective organisational responses.

Recommendations

The analysis of the report concludes that workplace conflict costs, and investment in effective and early resolution designed to build positive employment relationships may have a very significant return.

The report recommends in particular that organisations:

• place much greater emphasis on repairing employment relationships in the event of conflict;

• act at early points to address issues of capability and poor performance;

• approach disciplinary issues with a focus on learning and avoid blame;

• ensure quality interactions between managers and staff.

Conclusions

Since March last year workforces have experienced change at an almost unparalleled pace and more adapting and changing is to come, but even now employees may not yet be feeling the full impact of these changes. This ACAS Report therefore provides a very timely reminder of the cost of conflict to organisations and the value for money that can be achieved by investing in your workforce culture and approach.

Stone King can assist organisations to introduce and implement approaches aimed at avoiding workplace conflict. As well as supporting organisations to manage potential conflict scenarios, we provide training, including bespoke training tailored to specific employee groups, on subjects including wellbeing and inclusion.