Workplace Conflict: The Price of Addressing It Versus the Cost of Doing Nothing


Workplace Conflict: Inevitable but must be managed effectively to avoid significant impacts on health and productivity.
Hidden Costs: Employees spend an average of 4.34 hours weekly on conflicts, leading to over 200 hours annually of lost productivity per employee, resulting in financial losses.
Proactive Measures: Investing in conflict resolution, like training and workshops, improves communication, productivity, and employee retention.
Addressing workplace conflict
JAMS Pathways Editors

Workplace conflict is an inevitable aspect of any organization, but how it is managed can make a significant difference. Many companies hesitate to take proactive measures, such as addressing conflicts as they arise and implementing preventive strategies, due to budget concerns. However, the choice between addressing conflicts head-on or letting them fester can dramatically impact the overall health and productivity of your team.

The Hidden Costs of Workplace Conflict

Workplace conflict often starts as a minor disagreement but can escalate into serious issues that affect the entire organization. The 2022 “Conflict at Work” research from The Myers-Briggs Company provides a stark illustration of the impact. According to the study, employees spend an average of 4.34 hours per week dealing with conflict at work. For those deeply entrenched in conflicts, this translates to over 200 working hours per year—equivalent to five weeks of lost productivity per employee. Consider what could be accomplished with those five extra weeks of productive work. For an organization with employees embroiled in ongoing conflicts, the lost time and productivity can accumulate quickly, leading to significant financial losses.

The Financial Cost

Let’s examine an example of a bustling sales department of a large corporation. The pressure to meet quarterly targets was immense. Sarah, a top-performing sales executive, found herself overwhelmed by the increasing demands. She started missing deadlines, which in turn affected the entire team's performance. The constant stress led her to snap at colleagues during meetings, creating a tense atmosphere.

Initially, the management attributed the missed targets to market conditions and increased competition. However, the underlying issue was Sarah's stress and its ripple effect on the team. Over time, this stress-induced conflict resulted in several team members requesting transfers to other departments or looking for new jobs, further destabilizing the team's performance. Had the company addressed the signs of stress early by providing support and resources, the cascading conflicts and associated financial losses could have been mitigated.

The Human Cost

Beyond the financial impact, workplace conflict takes a toll on employee morale, trust in leadership and overall engagement. Continuous conflict can create a toxic work environment where employees feel undervalued and stressed.

High levels of stress and low morale can lead to increased absenteeism and a higher turnover rate, exacerbating the problem. This affects not only organizational health, but also team collaboration and workplace harmony.

The Price of Addressing Workplace Conflict

Addressing workplace conflict proactively requires an investment of time and resources and sometimes external professionals. However, the benefits far outweigh the costs. Here’s an example of a company that took action to address its conflict.

Proactive Measures

A midsize manufacturing company was grappling with high turnover and low productivity due to ongoing conflicts between the production and sales departments. Production employees felt that sales teams were making unrealistic promises to clients, leading to unmanageable workloads and frequent disputes.

Recognizing the need for intervention, the company's leadership engaged the help of a third party to facilitate conflict resolution workshops. The process began with surveys and interviews to understand the root causes of the conflict. This was followed by training sessions where employees from both departments learned effective communication and negotiation skills. Through role-playing exercises and facilitated discussions, employees began to understand each other's perspectives and work toward common goals. Over the next few months, the company saw a significant improvement in the work environment. Productivity levels increased, and the turnover rate dropped as employees felt more valued and understood. The strategic conflict management approach not only improved operational efficiency, but also enhanced employee retention and overall organizational health.

Comparison and Summation

Taking a look back at these two examples, the large corporation that let conflicts simmer under the surface suffered significant financial losses and a damaged team dynamic. In contrast, the proactive approach taken by the manufacturing company led to improved communication, higher productivity and reduced turnover. The ultimate cost savings of addressing conflicts early and effectively far outweigh the expenses incurred by letting conflicts go unresolved. Proactive conflict resolution fosters employee productivity, enhances workplace harmony and contributes to the overall health of the organization.

How JAMS Pathways Can Help

JAMS Pathways offers a wide range of conflict solutions tailored to your specific needs. In some cases, a one- or two-day training program or keynote presentation can put an organization on the road to a better future; in other cases, a multi-phased approach, featuring a mix of surveys, interviews, facilitation, workshops, planning sessions and training, may be more appropriate. Its facilitators’ work often focuses on building communication and negotiation skills, as well as navigating background and behavioral differences among stakeholders. Before starting any program, they work with you to understand your culture and identify the best fit for your situation. All of JAMS Pathways’ programs are live and fully customized, run by facilitators with the soft skills and knowledge to help your team collaborate and problem-solve.

How JAMS Pathways Stands Out from the Competition

JAMS Pathways is part of JAMS, the world's largest private provider of alternative dispute resolution services. With over 40 years of experience, JAMS understands how internal and external conflicts can disrupt operations and impair business results. That’s why it formed JAMS Pathways—to provide an alternative approach that helps avoid or resolve conflict before it boils over. Its facilitators are some of the most qualified dispute resolvers in the industry and are leaders in fields such as mediation, communications, psychology and negotiation. Its team is trained to listen, foster dialogue and help your team envision and implement responses that work for you. Choosing JAMS Pathways signals to your stakeholders that problems are being taken seriously and are in very capable hands.

Costs will vary depending on whether you select a one-and-done training or a multi-phased program of conflict prevention and resolution, but its team will work closely with you to create a program that serves your organization’s needs at a price you can afford. This approach can save your company money in the long run by preventing extensive losses due to unmanaged conflict. By focusing on dispute management and strategic conflict management, you can achieve significant cost savings and operational efficiency.

The cost of doing nothing about workplace conflict is high—both financially and in terms of employee well-being. However, by investing in proactive conflict resolution with a third-party conflict resolver such as JAMS Pathways, organizations can enhance morale, boost productivity and reduce turnover. Prioritizing conflict resolution is not just a smart business decision; it’s essential for creating a thriving, resilient organization.

This page is for general information purposes. JAMS makes no representations or warranties regarding its accuracy or completeness. Interested persons should conduct their own research regarding information on this website before deciding to use JAMS, including investigation and research of JAMS neutrals.
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