The costs of workplace conflict

In May 2021 Acas published a report on the estimated cost of workplace conflict prepared by Professor Richard Saundry of the University of Sheffield Management School and Professor Peter Urwin of the Centre for Employment Research, University of Westminster. 

A link to the full report can be found here

The report starkly underlines the importance and benefits of effective conflict resolution in the workplace. It states for example that: 

  • the cost of conflict to UK organisations was estimated to be around £28.5 billion;
  • close to 10 million people experienced conflict at work. Of these, over half suffer stress, anxiety or depression as a result;
  • just under 900,000 people took time off work; 
  • nearly half a million people resigned;
  • the cost of recruiting replacement employees is estimated to amount to £2.6 billion each year whilst the cost to employers of lost output as new employees get up to speed amounts to £12.2 billion;
  • more than 300,000 employees were dismissed; and
  • the total cost of management time spent dealing with potential and actual litigation is estimated at £282 million each year with a further £264 million spent on legal fees and that £225 million in compensation is awarded against employers per year.

Interestingly whilst many people, understandably, focus on the costs of litigation, the report shows that those costs were outweighed by the conflict related costs of absence, reduced productivity, resignations and dismissals. The report therefore stresses the importance of organisations investing in management training and putting conflict resolution systems in place.  

The report was prepared before the coronavirus pandemic and it noted that conflict has been supressed during this time. As we continue into the uncertain unfolding pandemic situation, it is perhaps more import than ever for employers to take early and timely advice into workplace issues.

At Markel we have a dedicated team of inhouse solicitors and barristers to advise you on workplace issues.  Markel clients who have access to our Legal Advice line can also take advice from our employment lawyers regarding workplace conflict, grievance and disciplinary issues.  Additionally, further employment guidance, template policies and letters can be found on the Markel Law Hub.