Manage your conflict and manage your costs

A quick internet search will yield many definitions of “conflict,” and most of them sound something like this one from Merriam-Webster:

Con-flict  noun.  Strong disagreement between people, groups, etc., that results in often angry argument.

Hmmm … I’m guessing this is why conflict gets such a bad rap and is avoided by so many business leaders instead of being dealt with head on as a fact of life.

In its pure form, conflict is nothing more than a difference in position (viewpoint) and desired outcome (goal). And productive conflict—which describes when two or more individuals of differing viewpoints are nonetheless focused on resolving the same problem for the same reason—is healthy and not to be discouraged. When individuals engage in productive conflict, the outcome is better solutions, positive energy expenditure, and team building.

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On the other hand, unproductive or unmanaged conflict—which is best described as those sometimes petty and often ugly interpersonal disagreements from which nothing good ever comes—is stressful, damaging to relationships, and costly.

Here are some ways in which those costs impact your bottom line.

Absenteeism

Put simply, when employees don’t like their work environment, they find ways to avoid it. The most recent CCH study estimates that unscheduled absences cost businesses nearly $765,000 each year—and that’s in direct payroll costs only.

Disengagement

Avoiding pain is as natural a human instinct as breathing, and it’s only natural, therefore, that your stressed out employees would react to their contentious work environment by mentally checking out. And while you may be tempted to think that a warm body is better than none, ask yourself this question: how likely is it that the problems you and your customers need resolving will be sorted out by someone whose mind is not actively engaged in the process?

Legal fees

When conflict reaches a boiling point and lawyers get involved, legal fees aren’t far behind. The EEOC received 99,412 filings in FY 2012, and because employees often claim multiple types of discrimination per filing, these comprised nearly 170,000 complaints. Each one of those complaints warrants a response, and with some lawyers charging as much as $400 per hour, responses are an expensive proposition, indeed.

Turnover

The saying “Employees don’t leave jobs, they leave managers” has been repeated time and again for a reason. According to this PayScale infographic, 63% of employees cited “feeling connected to the organization” as a reason to stay with their current employer. Unmanaged conflict can eat at those connections quickly. And when a valued employee leaves your organization because of a combative culture it’s not good justification for all the associated turnover costs, such as lost productivity, overtime, and recruiting fees.

Stress

According to a 2011 study by the American Psychological Association (APA), nearly 36% of employees report feeling stress at work each day. Another APA study found that nearly 43% of all adults suffer health effects from stress and that in 2001, the median number of days away from work as a result of anxiety, stress, and related disorders was twenty five. All told, one study estimated that employers spend nearly $300 billion annually on stress-related costs.

What’s the takeaway? Conflict costs money. And while managing conflict can cost money, too (in terms of employee wages or possibly trainer fees) it costs a lot less than avoiding the problem—whether the issue is a bad manager, a faulty policy, a lack of process, or a lack of civility—and waiting for the fallout. Truth be told, you just can’t afford to believe otherwise.