This informative webinar looks at the cost of workplace conflict on UK businesses, the causes of the conflict and practical ways to reduce it.

1. Reducing the Cost of Conflict:
A Practical Guide
A People Resolutions webinar in
partnership with HubCap Digital

2. Objectives
 To examine the Cost of Conflict to individual organisations
and UK businesses and to the economy as a whole
 To look at the causes and effects of workplace conflict
 To identify practical ways to reduce the cost of conflict
within organisations

3. Conflict Panel
Linda Hoskinson Lindsay Soulsby Helen Ross
Director, Head of Director Assessment Specialist
Practice, People People Resolutions People Resolutions
Resolutions

4. How much of a problem is
Workplace Conflict?

5. The stats...
 Conflict within British business costs over
£33 billion per year, every year
 Over 80% of this cost is the damage
incurred by business as a consequence of
disputes (£27bn), rather than the legal costs
(£6bn)
 80% of disputes have a significant impact
on the smooth running of business
Source: CEDR, 2006

6. What is conflict?
How about:
Negative behaviour which occurs when
people’s concerns appear incompatible
‘Unmanaged conflict is the largest
reducible cost in organisations today, and
the least recognised.’ Dan Dana

7. Causes of Conflict
Each organisation will have a different range
of typical issues:
 Conflict may be about tasks
 Conflict may be about individual behaviours
 Conflict may be between teams
 One response might not suit all
40% of all grievances are related to
relationships between colleagues
(PRL Research – Oct 2010)

8. Conflict Spectrum
Differences: Unresolved Differences :
Concerns:
• Are enjoyed • Are destructive
• Are used to • Create • Focus on
Collaboration good effect undercurrents people, the Conflict
• Are resolved • Tension past
constructively • Resentment • Create divisions
Co-operation • Focus on • Potential for • Negatively Negative
issues, the conflict, affect decisions Behaviour
future escalation or and
• Bring people constructive productivity
Harmony together resolution • Undermine Fighting
• Create better relationships
decisions

9. So, how much is conflict
costing your organisation?

10. Conflict Survey
In October 2010 we carried out a conflict survey to determine:
 Conflict prevalence
 The impact on performance
 Organisational culture
 Managerial and HR conflict management
capability
122 responses from HR professionals in the UK
45% of this sample were either HR managers or HR directors

11. At a high level what does this mean in terms
of HR time?
47% of our sample spend up to 10% of their week dealing with conflict
25.8% spend up to 20% of their week dealing with conflict
=
Over a quarter of HR professionals are spending 5 - 8 hours per week
(46 working days p.a.) on conflict
=
£8,644 - £10,000 per annum per HR colleague
Now, let’s take this to the next level!

12. There are many additional associated costs...
Tangibles Intangibles
Grievances Motivation
Tribunals Employee Satisfaction
Absence Culture
Engagement Working Environment
Turnover (early and normal) Loyalty
Training and coaching Commitment
Underperformance Teamwork and morale
EAP services
Whistleblowing investigations
Disciplinary Cases
Productivity loss for HR, direct
participants and wider
team/departments
Compromise Agreements
Engagement
Leadership

13. From a quick glance at the tangibles, the
costs start to escalate
Activity Volume Average Unit Cost Total Cost
Grievances 35 £2,500 £87,500
Tribunals 3 (lost) £18,000 £54,000
10.6 days (50% relating
Absence £150 £7,155,000
to stress-related factors)
Turnover 5.4% £3,000 £764,640
Total: £8,061,140
Public sector organisation with 9,000 FTE

14. So, how do we move forward...
Current State Gap Future State ROI
33% of completed Investigation & Reduction in £68,000
internal Report Writing reinvestigations by
investigations skills training for 40% = £80,000
needed to be 24 managers @ cost saving
reinvestigated £12,000
owing to poor Future cost now
evidence gathering £120,000
and inefficient
reporting at a cost
of £2,000 x 100
investigations
£200,000

15. Reducing the Cost of
Conflict: A Practical Guide

16. Our Approach

17. Conflict Reduction Cycle
Current & Future
State Analysis
Identify Cost of Gap
Redesign and
and complete
Monitor
business case
Evaluate Implement Change

18. Reducing the Cost of
Conflict: Planning

19. Avoid jumping to the solution too quickly...
 Once you know what
conflict is costing your
organisation the next step
is NOT to jump into
solutions, but step back:
 You need to understand
what is causing the
conflict ...

20. Complete an assessment to get to the key issues...
Our Conflict Assessment measures four factors:
1. Conflict Amount - how regularly conflict occurs (hot-spotting conflict
areas)
2. Conflict Type:
 Channels through which conflict occurs
 Conflict across and within levels
 Behavioural manifestations
3. Organisational Conflict Management - how the organisation addresses
conflict
4. Individual Conflict Management – employees’ confidence to deal with
conflict in relation to organisational policy and process

21. The Process
Initial consultation
Survey analysis, MI, policy review
Qualitative investigations
Report and recommendations
Implementation

22. Reducing the Cost of
Conflict: Prevention

23. So, where are we...
We’ve:
 Identified the ‘current state’
 Formed robust analysis as to why
it’s happening
 Calculated ROI based on the gap
between the current and future
states
Now we’re ready to determine how
best to move forward…

24. Prevention through...
There are many ways in which to help prevent workplace
conflict. Often through a combination of the following:
 Learning – webinars, face to face, e-learning
 Coaching
 Performance and People Management
 Organisational Development
 Effective Communication
 Environment and Psychological contract
 Framework – policies/procedures/systems and processes
 Culture – is this aligned to the future of your business?

25. Reducing the Cost of
Conflict: Resolution

26. Resolution through...
Informal
Performance
1:1s Mediation Learning Coaching
Management
Formal
Mediation Investigation Assessment Disciplinary
Post Formal
Performance
Mediation 1:1s Coaching Learning
Management

27. Reducing the Cost of
Conflict: Evaluation

28. Evaluation and Measurement are critical...
 Numbers are your friend not your
enemy
 Ensure you capture good quality MI so
are able to effectively evaluate your
conflict management initiatives
 Review your data on a regular basis to
determine what’s working well and
what’s not
 If it’s not working well, be prepared to
re-evaluate and change

29. Summary
Cost the
issue
Determine
Change or
why it’s
reinforce
happening
Implement
Evaluate
change
and
based on
Measure
ROI

30. Thanks very much for your time
From the team at
People Resolutions and Hub Cap Digital