Squabbles in the organization are natural. That’s what leaders get when the workforce is diverse. People have different opinions, methods, and ideas. These may even clash with those of the management.
But there’s also a good reason must do everything to resolve these issues, even if it means going through mediation and arbitration services. Workplace conflict is costly.
The Real Costs of Workplace Conflict
How expensive is workplace conflict? A study by the CPP Incorporated revealed that industries could lose as much as over $350 billion in paid hours. That’s equivalent to nearly three working hours per week.
But what makes it costly? The following factors may help explain:
1. Workplace Conflict Is One of the Leading Causes of Stress
In the data curated by the American Institute of Stress, at least 40% of workers revealed their job was either very or extremely stressful. Over 20% of them considered their work as their primary stressors.
Of the many possible reasons, 46% complained about the workload. Interestingly, though, 28% cited people issues as their main workplace stressor. In fact, it beat trying to achieve a work-life balance.
While stress is part and parcel of jobs, a significant or prolonged one caused by less-controllable factors like workplace conflict is severely harmful. For one, studies show a strong correlation between stress and health problems.
In a survey, about 13% of workers claimed they suffered from headaches, while about 30% revealed dealing with back pain. Long-term stress increases the risk of obesity and chronic illnesses.
People who are under a lot of stress, mental health struggles, and burnout are more likely to develop a weaker immune system. They are, therefore, more susceptible to infections that will eventually lead to absenteeism.
Circadian refers to absenteeism as a bottom-line killer because of the enormous costs associated with it. An unplanned absence of an hourly worker, for instance, could mean losing $3,600 annually.
2. Conflict in the Workplace Can Increase the Risk of Aggression
Workplace violence is a lot more common than organizations believe. The Bureau of Labor Statistics once cited that, in 2018, at least 20,000 workers in the private sector experienced some form of trauma due to nonfatal workplace violence.
Meanwhile, the National Safety Council shared that over 15% of deaths in the workplace in 2016 might have been due to violence.
The feeling of aggression can stem from a variety of sources. Some employees may feel they are being abused, and engaging in violence is a form of self-defense. Others simply want revenge.
Many workers may be suffering from silent rage. As the reports suggest, at least 25% of these acts of violence remain unreported. As the tension and anger rise, they may eventually release it by hurting others.
In some cases, stress is to blame. In one of the surveys, around 2% of the worker respondents said it triggered them to strike someone.
3. Conflicts Can Increase Attrition Rates
As the saying goes, if one cannot take the heat, they need to get out of the kitchen. While some employees resort to violence, others don’t. Instead, they leave—and this can be detrimental for the business, especially if the person is a prized talent.
People Keep shared that the cost of a high turnover rate among low-paying jobs may be equal to over 15% of the employees’ annual salary. Therefore, a business may have to spend around $3,000 replacing a retail worker who used to earn $10 an hour.
However, the percentage soars to a staggering 213% when executives leave. Hiring a new CEO who might have been earning $100,000 may cost the organization at least $213,000.
Companies also end up spending more money the longer the position remains unfilled. On the lower end of the scale, it may be worth almost $2,000 a month per vacant job.
The problem is, higher positions take a much longer time to fill. Replacing a CEO, for example, may last for six to 12 months as opposed to only 2 months for other types of work.
4. Conflicts Create Disengaged and Unhappy Employees
Disengaged workers are often less productive and efficient. Their mistakes, inability to meet quotas, and poor performance can already translate to thousands of possible losses. But that’s not all.
Some can be actively disengaged, and these are the people who can incite more chaos and conflicts in the workplace. If they succeed, they can encourage disengagement among engaged workers.
Most of all, disengaged employees are unsatisfied, unhappy employees. Not only are they likely to become chronic absentees or underperforming workers, but they’re likely to damage the reputation of the company. They may eventually share their experience with others as a way of coping with the problem.
Businesses can pursue many ways to reduce costs while increasing productivity and performance. These strategies may include paying more attention to and eliminating workplace conflict before it goes out of hand.