How much is conflict costing your company
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By: Lizzy-Ann

It is interesting to discover how much unnecessary cost is being accrued by businesses as a result of conflicts. Conflicts, as we all know, is inevitable especially in working environments where a high level of interdependency exists in the achievement of organizational goals and objectives, and it is therefore of utmost importance that businesses take time to discover the impact of conflicts on their operations to take proactive measures to prevent and manage conflict to avoid or reduce cost.

Conflict is hidden, but has high cost. Its cost is hidden in your salary budget in the form of wasted time. It is hidden in your recruiting budget in the form of unnecessary turnover. It is hidden in the consequences of poor decisions that result from a decision-making process contaminated by power contests and many other additional factors that when measured unravels how expensive it is to be in conflict.

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Conflict in the workplace typically involves differences of opinion, style, or approach that are not easily resolved. These can lead to hurt feelings and altercations among employees.

It may occur between co-workers, or between supervisors and subordinates, or between service providers and their clients or customers.

Conflict can also occur between groups, such as management and labour, or between whole departments.

However, some conflicts reflect real disagreements about how an organisation should function. If the winner of the conflict happens to be wrong, the organisation as a whole could suffer.

No matter the form or nature of the conflict, conflict at the workplace cost money. Most times, people just look at conflict at face value and only consider its effect on the relationship of the disputing parties. But the conflict has a tremendous loss on an organisation if time is spent to quantify it.

To start with, conflict leads to wasted time, and time is money. Organisations employ and pay employees for their time, so when the time is wasted, it is the organisation’s money that is being wasted. When you calculate the time employees spend arguing unproductively over their differences, when work time should be spent doing something productive, you realise that a huge cost just goes down the drain because every unproductive hour spent amount to money wasted for no work done.

Another effect of conflict at the workplace is bad decisions. Employees at various levels make decisions on the job and some decisions are simple and may not have much impact as those made by key employees that can have significant financial consequences. An uninformed decision is usually a bad one. So when there is a conflict between a decision maker and an information source, the decision maker cannot trust the coworker to provide objective and accurate information while the co-worker’s resentment or ill feeling can also cause him to withhold or distort relevant business information. As a result, their conflict contaminate the decision making process making it either unreliable or subjective.

Another crucial effect of conflict is the loss of talented employees. Organisations invest in employee skills by paying a premium salary and training and development to ensure that the right talent, skills and competencies needed for the job is attained. Apparently, when conflict occurs over a period, and employees find their effort frustrated, most organisation’s best talent look out for exit options as they find the working environment uncomplimentary especially for employees who have high career ambitions.

According to some exit interviews organized by renowned Workplace Conflict expert, Dr Dan Dana to explore departing employees underlying reasons for quitting their jobs revealed that unresolved conflict amounted to at least 50% of voluntary departures and conflicts account for up to 90% of the cause of involuntary terminations with the exception of some staff reduction due to downsizing, mergers and restructuring. A lot of employees leave their jobs to avoid conflicts.

This situation also leads to unnecessary restructuring in organisations as managers sometimes are forced to restructure the design and flow of task to reduce interaction between conflicting employees.

So with all these factors looming over conflicts at the workplace,  considering the cost, stress and even eventual collapse if not properly managed, it is essential that organisations do more research and factor conflict when putting their annual budget together to lay more prominence on deliberately developing strategies for managing conflict.

Every organisation must have a conflict management strategy, which must be embedded in the organisation’s structure and culture, and the competencies of workers to resolve and prevent workplace conflicts. Conflict management skills revolve around making sure everyone feels heard and respected while negotiating a mutually beneficial solution that everyone involved can accept. It does not necessarily involve pleasing everyone or removing any and all disagreement, but the goal of conflict management is to make sure that any disagreement remains productive and professional.

Because of all the costs above, conflict management becomes a critical strategic function of every organisation and should be an intentional and conscious one not left to chance because the unnecessary costs and increased risks of conflicts are too enormous to ignore.

So what is your company’s strategy for managing conflict? You can checkout

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ADR Daily is a specialized news portal with a focus on providing authentic news, information and research analysis on Appropriate Dispute Resolution (ADR), Human Resource Management (HRM) and Industrial Relations Management (IRM) in Ghana and beyond. This platform serves as an information resource base for the progress of the ADR, HRM and IRM industries, and seeks to promote professionalism in ADR practice by supporting a network of ADR professionals within and across nations and continents. ADR Daily keenly encourages the mass adoption of ADR mechanisms, particularly negotiation, mediation and arbitration for the resolution of disputes in all spheres, through the publication of industry news and information, as well as by deploying innovative awareness creation engagements.