The cost of workplace conflicts - and how to avoid them
It is easy to see how workplace conflicts can have a significant and long-lasting impact on both employers and the employees. However, a recent publication by impartial employment conciliation and arbitration service ACAS, attempts to show the true value of the impact of workplace conflict in the UK.
The recently published report estimates that 485,800 employees resign each year as a result of workplace conflict. It suggests that the cost of hiring new employees to replace those lost comes to £2.6 billion each year, and further associated costs from resulting lost output amounts to a staggering £12.2 billion, as new employees take time to reach the productivity levels of their predecessors. Furthermore, the costs associated with sickness absence resulting from workplace conflict is estimated to cost UK employers some £2.2 billion each year and it suggests the total costs arising from workplace conflicts overall amounts to an eye-watering £28.5 billion (https://www.acas.org.uk/costs-of-conflict).
The report makes clear something that those involved in HR and Employment Law have long been aware of; workplace conflict can have an extremely detrimental and enduring impact on both employers and employees. The report attempts to quantify this, and the results demonstrate that workplace conflicts are best avoided at all costs. Where this is not possible, steps should be taken to ensure that a conflict is not allowed to fester or escalate further and action is taken to mitigate the undeniable damage that can result. Danielle Lister, Head of Employment law at Chattertons Solicitors in Lincolnshire, considers how workplace conflicts might be avoided or mitigated:
- Communication is key – effective communication is paramount in avoiding or resolving workplace conflicts. Sometimes, misunderstandings arising from miscommunications are inevitable from time to time. Encouraging effective communication throughout an organisation can avoid grumbles escalating into a full blown conflicts, and so employers should consider how they communicate with their employees, and how they encourage employees to communicate with one another. Where a problem does arise, the sooner the conflicting parties can reach the point of effective communication, the higher the likelihood of the situation being resolved. Clear communication should be encouraged at all levels; this is particularly the case in the current environment, when many employees are working remotely which can lead to feelings of isolation and lack of team cohesion. In addition, a lack of face to face communication provides a substantial opportunity for misunderstandings to occur, such as with email communication when context and tone is entirely a matter of interpretation for the recipient. On a basic level, and particularly whilst remote working is prevalent, employers should encourage communication that fosters positives relationships and use a variety of means which best suits the needs of their business, for example via regular team meetings, weekly catch ups or daily check-ins. There should also be an agreed level and method of communication that all parties understand and adhere to.
- Clear workplace policies and procedures – Employers should ensure they have clear (and legally compliant) workplace policies and procedures in place. Ideally, these will cover all aspects of workplace life to allow for all eventualities. Policies should make clear what the employer's position is on a variety of different topics which will help create certainty and provide guidance in the event that a dispute arises. Employees should be clear about who to report their concerns to if they feel the need to take matters further. Ensuring a clear and up to date grievance and disciplinary policy are in place should encourage resolution if a problem does arise, whilst ensuring the business is complaint with its legal responsibilities towards its employees. Disciplinary policies that focus on conciliatory outcomes, such as learning and avoiding blame (where possible), are also recommended.
- Contracts of Employment – Many employers still operate without effective (or sometimes, any) Contracts of Employment in place. Not only is this a breach of the Employment Rights Act 1996, but failure to have Contracts in place which govern the employment relationship can cause significant problems if a conflict arises. This can lead to uncertainty and the escalation of disputes, which sometimes are impossible to resolve other than via the courts or an Employment Tribunal process. Failure to have appropriate Contracts of Employment in place can also lead to a higher financial penalty being awarded against an employer in the event a successful Employment Tribunal claim is pursued by an aggrieved employee.
- Consider workplace mediation – Mediation can be an effective tool for resolving disputes in the workplace. For many scenarios, having an independent third party assist in mediating the issue can bring a fresh pair of eyes and a new perspective to a problem, which can help dispel grievances before they become unresolvable. Whilst Mediation can be an excellent way to resolve certain issues, it may not be appropriate for all situations for example, in cases of alleged discrimination or harassment or where the parties conflicting views become too entrenched.
- Take advice – It is advisable to take legal advice as early as possible when a workplace conflict arises. Depending on the situation, employers have a variety of responsibilities to take action in certain situations and early intervention is often likely to be key. Even if the dispute is between two employees rather than with the employer directly, the employer can be held vicariously liable for the actions of their employees in certain circumstances and so any workplace conflict presents a potential significant risk to a business. An adviser can work alongside a business to help resolve the problem before a situation escalates. If a resolution is not possible, employers should always ensure they are adhering to their responsibilities to take appropriate action in line with applicable Employment law. Doing so will help prevent legal claims against the business, or will assist in mitigating the effects if an Employment Tribunal claim is subsequently brought.
The ACAS report makes an interesting observation in that suggests conflicts are likely to have been suppressed during the COVID-19 pandemic, when people have been away from work. However, it suggests with the impending return of employees to the workplace in coming months, coupled with a variety of other factors such as insecurity, rapid change and economic pressure, suggests it is likely that workplace conflicts will re-emerge. With this in mind, employers should be thinking about what steps they might be able to put in place now to avoid future workplace conflicts, or mitigating the effects on the business if problems do arise.
If you require any assistance or advice in respect of workplace conflicts or any other Employment law matter, please do not hesitate to contact a member of our Employment Law team: