THE COST OF WORKPLACE CONFLICT
THE COST OF WORKPLACE CONFLICT

24 May 2021

Getting embroiled in a workplace conflict is a stressful and time-consuming process. If it does not get resolved and the problem escalates and ends up going to a Tribunal or Court, not only do the stress levels increase but so do the costs.

This has been highlighted in a report called Estimating the Costs of Workplace Conflict, published by the Advisory, Conciliation and Arbitration Service (ACAS) which showed that workplace conflict costs UK employers just under £30 billion a year, which is around £1,000 for every employee.

The figures in the report, published on 11th May, 2021, are based on the total cost to organisations in handling workplace conflict and include informal, formal and legal processes, plus the cost of sickness absences and resignations.

In addition to the disruption of having to deal with workplace conflict, it can also be a significant drain on productivity. According to ACAS, out of the 9.7 million employees who experienced conflict at work from 2018 to 2019, more than half suffered stress, anxiety or depression and just under 900,000 people took time off work, costing businesses and other organisations an estimated £2.2 billion.

It goes without saying that absenteeism can hugely affect the bottom line of a business which has to absorb all of these costs, arrange cover and deal with the fallout. This can also impact on the quality of work, continuity and general morale amongst staff. ACAS has invented the word ‘presenteeism,’ which is used to refer to employees who are physically at work, but not mentally engaged.  ACAS estimate that this issue costs around £2.3 billion a year in lost productivity.

ACAS, which aims to improve relationships between employers and employees, also notes that close to half a million employees resigned and over 300,000 were dismissed in a 12-month period. This alone can be very demotivating for the rest of the work force.

ACAS Chief Executive, Susan Clews, said: “A failure by employers to deal with conflict early can be costly to businesses.

“Poor conflict management can also cause staff stress, anxiety or depression and impact workplace productivity. There is a clear benefit to everyone in handling problems as early as possible.”

Echoing these comments, Gill Brown, who heads the Employment Law team at Phillips, said: “The ACAS report shows that employers need to take employee relations very seriously.   It is the case that the main findings of the ACAS report relate to the period before the pandemic took hold, which means there are now even greater challenges to employers and employees and an even greater potential for conflict as organisations come out of the lockdown and adapt to new ways of working.”

“Having clear and appropriate policies and procedures in place and training managers on how to deal with complaints and conflicts early and effectively can often avoid hefty financial costs as well as other consequences that risk damaging employment relationships. It is important that these policies provide clarity for everyone by setting out: (i) what is expected of employees; (ii) what is and is not acceptable behaviour; and (iii) how an employer will respond to violations.  This will ensure consistency and transparency.”

“Post-pandemic workforce stability will be key in allowing businesses to bounce back so early intervention to resolve all forms of conflict or dispute could not be more important.”

Whether you are an employer or employee, if you would like advice on these or any other matters please contact Gill or any member of the employment law team by emailing [email protected] or calling 01256 845605.

Alternatively click here to go to our contact page.

 

Disclaimer

This article is current at the date of publication set out above and is for reference purposes only. It does not constitute legal advice and should not be relied on as such. Specific legal advice about your specific circumstances should always be sought separately before taking any action.

Have more questions?
Our expert solicitors are here to take the worry off your hands.
Please call us or email and we’ll get back to you as soon as possible.
News
PHILLIPS LAW ACTS ON THE GRANT OF THE NEW AA HEADQUARTERS AT PLANT, BASINGSTOKE
PHILLIPS LAW ACTS ON THE GRANT OF THE NEW AA HEADQUARTERS AT PLANT, BASINGSTOKE

Phillips Law is delighted to have advised Mactaggart Family & Partners and Longstock Capital Limited on a multi-million-pound agreement for lease with The AA to move their headquart ...

More
Deliveroo worker status judgment: implications for employers
Deliveroo worker status judgment: implications for employers

In our January update we reported on the Supreme Court decision in the long running dispute between Deliveroo and the unions representing many of its riders. You can read the full Judgm ...

More
New right to unpaid leave for carers
New right to unpaid leave for carers

From 6 April 2024 carers will have a day one right to request one week’s unpaid carer’s leave per year. Draft regulations for the Carer’s Leave Act 2023 provide the detail on this new r ...

More
Employment Update – January 2024
Employment Update – January 2024

Welcome to the new year! As we embark on 2024, it’s crucial to stay informed about the latest developments in employment law. Here’s a snapshot of key updates and changes th ...

More
Phillips Law advise Nordic Design House on the acquisition of their first UK showroom in London
Phillips Law advise Nordic Design House on the acquisition of their first UK showroom in London

Phillips Law is delighted to have advised Nordic Design House on the acquisition of their first UK showroom in Clerkenwell, London. Nordic Design House is a renewable furniture design c ...

More
Three Promotions – October 2023
Three Promotions – October 2023

We are delighted to announce three well-deserved promotions within our firm. Sian Lias and Lisa Perry have been promoted to the position of Legal Director in the Wills, Trusts and Proba ...

More