Conflict cost measuring and modelling are essential for our 21st Century businesses to be fit for purpose. After all, what gets measured, gets managed.

How many of us though actually record the time we spend on conflict management – whether within our HR teams or the wider business? Do any seek to attribute notional cost values per employee involved in conflict management processes?

In our experience few do. Where attempts have been made to measure the costs, some may not be measurable accurately or at all, for example, lost productivity or lower output otherwise, or unconnected or invisible sickness days or decisions to leave the organisation by key employees who have been disheartened by the conflicts and the management of them.

Even those costs which are more visible such as external legal costs per tribunal or court claim, do not tell the whole story. The average cost per tribunal claim it is suggested, is at least £20,000. Adding to this item a notional sum for time spent by the business and HR and perhaps internal legal stakeholders can quickly see the cost per conflict extend to £50,000. Factor in unquantifiable costs such as lost productivity or impact on team morale and performance, and the overall final costs can be staggering.

By attempting to measure typical costs, businesses will be better informed to look at alternative approaches to managing and resolving conflicts and save considerable time and money in the process.  What is clear in our experience is the need for every business, to measure their own conflict costs, regardless of their business size, administrative resources, tribunal claims incidence or staff turnover.

Six reasons why conflict costs should be measured are:

1. Why avoid doing so any longer? It is an essential element to your budgeting and cost management processes and so should be regarded equally as say your staff costs;
2. Only by analysing conflict costs, can informed decisions be taken as to whether change is warranted in the approach to their management;
3. The objective must be to reduce your conflict costs, year on year; every saving made goes straight to the bottom line after all;
4. By measuring costs, we get to see where we can improve and how we can avoid the same mistakes next time – through training, changes in procedures and approach;
5. We can learn where our systems, processes and procedures are not working effectively for us and where we need to change our approach;
6. Our people deserve it. Every employee wants to do a good job, to feel valued at the end of each day and be treated fairly in everything they do, so by interrogating and analysing where we have experienced or witnessed conflict together, we immediately offer them improvements in our culture and our working relations for the future.

There is no credible business case against measuring our people costs in all key areas where reasonably achievable. We target and measure key successes after all – for example, sales achieved, customers introduced, services sold. So why not conflict costs?

At Hexagon Mediation, we are sure of one thing: measuring your costs will allow you to adapt your approach to future conflicts: our message here is mediation can save the considerable time and other costs incurred on managing disputes in the workplace as well as legal disputes. Do contact us to learn more:

Michael Farrier

Hexagon Mediation

(07980) 804216