By Carol J. Sutton

To create a workplace in which engagement, loyalty and high-performance thrive, the executive suite has much to gain from turning to human resources professionals. Although the lion’s share of responsibility rests with senior management, HR can add great value in many substantial ways: not the least of which is advising, guiding and providing training to managers to reduce workplace conflict.

Targeting Workplace Conflict
In fact, unresolved conflict may well be the single largest reducible cost in many organizations.  Evidence from various studies reveal that up to 30 per cent of a typical manager’s time is spent dealing with conflict. Further, some estimates show that Fortune 500 senior HR executives spend up to 20 per cent of their time not just on conflict-related matters, but in actual litigation activities.

For the purposes of this article, I am talking about conflict as a serious disagreement over needs or goals. The situation may be characterized by a spectrum of behaviours, including gossip, avoidance, verbal abuse, passive/aggressive communication, and hostility. Some people react to the conflict by “forgetting” to return phone calls; others file complains, grievances or lawsuits. At the far end of the spectrum lies physical violence.

Some costs are easier to attribute to conflict than others. For instance, theft and sabotage are direct, although not always simple to link to a specific conflict or individual. Other factors are more nebulous, but may still be calculated as you will see below.

Uncovering Hidden Factors
However, even before understanding the actual costs of workplace conflict, HR professionals can help their employers by instituting resolution processes and providing basic training that equips managers to deal with the inevitable differences and disagreements that exist within any group of people.

Being able to cite quantitative and qualitative data about the subject confidently further enhances HR’s credibility as a business partner. Some of the costs are manifest long before legal assistance becomes inevitable; for instance:

• Think about the amount of time conflict steals from real work. Multiply the average number of hours each person spends involved in unproductive participation in the conflict (e.g. distracted time, thinking/worrying, analyzing it with colleagues, etc.) by the number of people involved;
• Multiply the number of such hours per person by the pro-rated wage/salary of each one; and
• Don’t forget the cost of replacing employees (hourly and professional/managerial), both those who voluntarily left (at least in part) due to the conflict, and those whose employment was terminated.

If possible, estimate the amount of work flow, job design, reporting relationships’ change, or otherwise unnecessary structural changes made to accommodate the individuals in conflict. Add those figures, plus the value of the decisions affecting the business that were influenced by the conflict—both negative implications and lost opportunity costs.

A Costly Conflict Scenario
Here’s one possible scenario: the situation involves two people, each of whom is paid $70,000 a year, their manager who earns $100,000 and an HR manager who makes $80,000 annually. During the six months of this conflict, the organization has lost 50 hours of productivity for each of the two employees—e.g. two days absence each and many hours of avoiding each other, talking to others about the conflict, and simply stymied through a lack of motivation.

The manager has spent 12 hours trying to handle the situation; the HR manager has put 10 hours into researching policies, providing advice to the manager and the two primary conflict participants, and informing senior staff about the issues. Five other employees (with an average annual wage of $50,000) have lost 15 hours each on avoidance, absence due to stress, gossiping, etc.

A conservative estimate for the cost of this conflict—based solely on wages/salaries, no benefits or perks—is $9,676.00. The longer the conflict is allowed to continue, the greater the accumulated costs, even though they may not all show up directly on the balance sheet.

Now, consider that a basic conflict resolution awareness and skill-building training program would have set the organization back approximately $600 for each of the two principals and their manager. That’s $1,800.00—a savings of some 80 per cent thus far.

The Positive Impact of Conflict
Conflict often affects other aspects of working life too such as absenteeism, turnover and grievance filing. If you can quantify these in your organization, you will be able to show the added value of human resources interventions, such as training and performance management programs.

To deal with conflict, managers and other employees need to be able to talk about their differences. Without a conflict management vocabulary and training in how to separate the personality from the problem, most people will avoid the discussion until circumstances are so far advanced that dire results are about the only ones possible.  This is particularly unfortunate because dealing well with conflict can make a big contribution to organizational effectiveness and productivity.

When people share their differences, viewpoints and techniques—respectfully—they create a crucible in which new ways of being and doing things may be fashioned. Well handled, conflict can be a creative force for good!

Carol J. Sutton is presenting What to do When Conflict Knocks at the Legal Symposium 2017 in Vancouver on January 26. For more information on this and other professional development opportunities, please visit HRMA’s online calendar.

Carol J. Sutton, Cert.ConRes. is a conflict resolution professional and organizational communication specialist who coaches, trains and facilitates programs that enable clients to move beyond management into leadership roles; to generate stronger results through teamwork, and to increase inter-personal communication effectiveness in the workplace.