The Cost of Workplace Conflicts

Posted: June 2, 2021

ACAS, the employment conciliation body, has recently released a report regarding the cost to UK employers of workplace conflict. The report analysed data collected by the Chartered Institute of Personnel and Development and estimates, conservatively, that conflict cost employers £28.5 billion during the period of 2018 to 2019 – Estimating the costs of workplace conflict | Acas.

The figures include costs relating to formal and informal complaints associated with workplace conflict, legal processes, sickness, presenteeism, absenteeism, as well as the cost to businesses for resignations and equate to approximately £1,000 per employee within the UK.

While the pandemic is likely to have suppressed conflict in the short term, due to remote working and furlough, the return to the workplace is likely to unearth previous conflicts as well as generating new ones.

Key Points

The report details the following key points:

  • Over one third of respondents had experienced conflict, either in an isolated incident or an ongoing relationship.
  • Most employees stay within an organisation following conflict with approximately only 5% resulting in resignations, however those employees subsequently were often absent from work, suffering with poor mental health and/or reporting lower levels of motivation and therefore productivity.
  • One in five employees who are involved in a workplace conflict will not take action.
  • The highest costs to a business relate to ending employment contracts, with approximately £10.5 billion being spent on disciplinary dismissals and £11.9 billion on resignations.

Currently, the average award made by the Tribunal for an unfair dismissal claim is £10,812. This is in addition to the legal fees, management time and other costs the business has incurred to the date of the Tribunal as well as risks to the employer’s reputation.

Conclusion

The report places emphasis on early intervention when a conflict arises as well as taking action to address employee issues such as capability and poor performance.

We can advise you on how to minimise such risks with practical tips, therefore, please contact our employment team if you have any employment concerns.

Louise Jordan, Trainee Solicitor, Simkins LLP

Victoria Willson, Partner, Simkins LLP