Workplace conflict costs employers £30 billion

Workplace conflict costs employers nearly £30 billion per year, according to figures published by the Advisory, Conciliation and Arbitration Service (Acas).

The research, published in the organisation’s Estimating the cost of workplace conflict report, focused on figures from 2018-19. It found that such was the impact of workplace conflict – defined as including everything from informal, formal and legal processes, as well as the cost of sickness absences and resignations – that each employer paid out the equivalent of £1,000 for every working Briton.

Among the expenses, the highest was found to come from resignations (at a cost per year to employers of £11.9 billion), followed by disciplinary dismissals (£10.5 billion).

By comparison, the cost to businesses from sickness absence was substantially less, at ‘just’ £2.2 billion.

Susan Clews, Acas’s chief executive, described the findings as “startling,” saying it meant close to 10 million people experienced some form of conflict at work during the period measured.

She said: “Of these, over half suffered stress, anxiety or depression as a result; and just under 900,000 took time off work.”

The figures showed that nearly half a million people resigned, and more than 300,000 employees were dismissed.

Although Acas said anecdotal evidence suggests the Covid-19 (Coronavirus) pandemic has  suppressed conflict during the past 12 months, according to Clews the data proved that it was now essential for employers to implement so-called ‘conflict competence’.

She added: “There is a critical time to intervene. This is before conflict reaches formal workplace procedures, since at this point there is a greater likelihood of resignations, presenteeism and sickness absence.”

All-told, the report found the vast majority of employees who experienced conflict stayed with their organisation and just 5% resigned as a result.

Acas discovered a slightly higher proportion of respondents reported taking time off as sickness absence (9%). However, despite this, it still revealed 40% reported being less motivated and more than half (56%) reported stress, anxiety and/or depression.

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According to Acas, there are an average of 374,760 formal grievances each year. The approximate cost in management time of a formal grievance is estimated at £951, giving a total cost across the economy of £356 million.

There are around 1.7 million formal disciplinary cases in UK organisations each year. The estimated average cost of each disciplinary case is approximately £1,141 – resulting in an economy-wide total cost of £2 billion.