The Cost of Conflict: $359 Billion | Weatherhead

The Cost of Conflict: $359 Billion

Posted 3.8.2012

by James Van Doren


     No one likes conflict.  OK, almost no one.  But since people invariably see things differently and have different values and beliefs, conflict is a normal part of our lives, including our business lives.  Conflicts can be real or imagined.  In fact, while you might think it takes at least two for conflict to arise, I’d argue that it only takes one person perceiving a conflict for it to be so.  

      The costs of conflict to business (and to people) are enormous. A 2008 CPP report indicates that, on average, employees spend 2.8 hours per week dealing with conflict.  That’s not too bad, right?  Until you consider that 2.8 hours per employee per week adds up to approximately $359 billion dollars in paid time.  Furthermore, of the employees surveyed, approximately 25% said that avoiding conflict meant they skipped out on work due to illness, or simply to avoid the situation.  The costs may be even higher when you consider lost productivity of managers dealing with conflict,  impaired performance of other employees who may be dragged into or affected by the conflict, employee turnover, and mistakes made by employees who are distracted by conflict situations.  Not to mention potential litigation costs if the issue becomes serious enough!

      It is not all doom and gloom, however.  While some level of conflict is inevitable, the costs are not, as long as the organization is willing to invest in conflict management training.  The return on investment for conflict management training is fairly easy to calculate.  A Law Memo article  provides some formulas for determining the ROI and payback period of conflict management training.  The authors calculate ROI as performance improvement minus the cost of training divided by the cost of training (PI – C /C).  The payback period formula they provide is similarly straightforward.  They multiply the cost of training by 52 weeks, dividing that by performance improvement (C X 52/PI).  The challenge, of course, is determining the baseline amount of time a particular employee or group spends on conflict.  That said, it is important to note that some organizations may feel that conflict management training is justifiably important based solely on a corporate culture and values perspective.  This is because the human costs of conflict are not always so easy to measure in dollars and cents.  But just because those costs aren’t easy to measure doesn’t mean they aren’t there.

      Whatever the reason for instituting conflict management training, there are a variety of options and approaches.  Some training will focus on a negotiation- or mediation-style approach to conflict management.  This can be useful when the conflict is overt and not overly emotionally charged. Such conflicts may happen with suppliers, customers, or other institutional entities, like unions.  For other types of conflict we may consider non-traditional approaches.  Issues like personality conflicts or conflicts that stem from perceived threats to oneself, one’s job, etc., can benefit from tools learned in advanced leadership training like Emotional Intelligence.  Other interpersonal conflicts stem from uncertainty or from a cause that’s  not clear or not one-dimensional; these can benefit from tools and approaches learned in “positive conflict management” programs.  Positive conflict management programs typically seek to reframe conflict as an opportunity to understand different goals and views—and to find common ground, ultimately making things better.  Conflict is reframed as an opportunity for positive change and growth.  This type of conflict management may use approaches garnered from the positive psychology movement or from Appreciative Inquiry, a positive change methodology.

      Regardless of the type of conflict management training you or your organization pursues, the many benefits are clear.  If you want to see your productivity increase, if you’d like to see absences and negative emotions decrease, or if you’d just like a happier, healthier workforce, then conflict management training could be a big step in the right direction.  It just takes the willingness to invest a little time and a little effort.  And the right program.

Weatherhead Executive Education offers a variety of programs that can build conflict management expertise.  We have classes in our Communication and Professional Skills series that provide excellent skill building.  Additionally, we offer the Emotionally Intelligent Leader Certificate for increased leadership effectiveness.  Finally, we offer a conflict management course designed to provide a variety of positive approaches to understanding and mediating conflict.

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