• Published February 10, 2023
  • 3 Minute Read
LEADING EFFECTIVELY ARTICLE

The 7 Costs of “Conflict Incompetence”

The 7 Costs of "Conflict Incompetence"

What’s the True Cost of Conflict?

Workplace conflict may be frustrating, but is it worth the incredible effort required to tackle it? Take a close look at the financial and human costs of not being able to reduce conflict — a problem known as “conflict incompetence” — for the answer.

As noted in our guidebook on resolving conflict, when conflict is mismanaged, costs mount. Some out-of-pocket costs like absenteeism and lawsuits are relatively easy to observe and calculate, but other costs, like poor decision-making, lost opportunities, broken trust, and diminished quality of working relationships, can prove more costly but are more difficult to quantify.

7 Factors That Make Conflict Costly

To identify the real cost of conflict in your organization, consider the following 7 factors:

1. Wasted time.

How much management time is wasted on conflict rather than addressing more productive issues? Remember to factor in lost productivity when employees spend time complaining to coworkers about the conflict.

2. Employee turnover.

When conflict is severe or ongoing, especially when there’s a sense of betrayal in the workplace, employees are likely to seek a better place to work, particularly when the job market is strong. Don’t underestimate replacement costs. The cost of finding, training, and bringing a new person up to speed can often exceed the annual salary of the employee who leaves (particularly if they were a high-potential). It certainly costs more than addressing conflicts in the first place so employees don’t get frustrated and leave.

3. Grievances, complaints, and lawsuits.

If problems are handled effectively from the start, many issues can be resolved informally at a much lower cost. If problems are ignored or not handled well, then the conflict spirals out of control and requires third-party intervention, requiring more time, effort, and cost.

4. Absenteeism and health costs.

Employees often stay away from work to avoid dealing with conflict or to delay a confrontation. Others may take time off to address the physical and emotional stress of conflict. Health care costs, in connection to stress-related illnesses, are part of the price of conflict incompetence.

5. Workplace violence.

Conflict can escalate out of control. The National Institute of Occupational Safety and Health estimates that more than one million workers are assaulted each year at work, and a significant number of these assaults come from disgruntled customers, patients, coworkers, and employees. The emotional toll can be enormous and can increase the costs associated with retention, absenteeism, and health care.

6. Poor decision-making.

Destructive conflict disrupts the organization’s ability to function effectively. People begin to lose their energy and creativity. They pull back, stop sharing information, and take fewer risks. The result can be less collaboration across boundaries and poorer quality group decision-making.

7. A poisoned workplace.

Conflict causes all sorts of unpleasant emotions and reduces the sense that you’re in a psychologically safe work environment. Anger, fear, defensiveness, negativity, hurt, and embarrassment, combined with misunderstanding and distrust, will lower morale and strain relationships.

By increasing your conflict competence, you can make yourself and your organization more productive. Learn our tips for calming conflict in the workplace.

Ready to Take the Next Step?

Upskill your team so that they’re more competent at reducing the cost of conflict with a customized learning journey using our research-backed modules. Available leadership topics include Boundary Spanning, Conflict Resolution, Emotional Intelligence, Listening to Understand, Psychological Safety & Trust, and more.

  • Published February 10, 2023
  • 3 Minute Read

Based on Research by

Harold Scharlatt
Harold Scharlatt
Former Manager, Design & Delivery

Harold was responsible for the quality of design and faculty delivery for all programs and all non-programmatic client work. During his career at CCL he also served as Portfolio Manager for Groups, Teams, and Organizations and was the campus lead for the Organizational Leadership practice. Harold is the author of Resolving Conflict: Ten Steps for Turning Negatives to Positives and the guidebooks Influence: Gaining Commitment, Getting Results and Selling Your Ideas to Your Organization.

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About CCL

The Center for Creative Leadership (CCL)® is a top-ranked, global, nonprofit provider of leadership development and a pioneer in the field of global leadership research. We know from experience how transformative remarkable leaders really can be.

Over the past 50 years, we’ve worked with organizations of all sizes from around the world, including more than 2/3 of the Fortune 1000. Our hands-on development solutions are evidence-based and steeped in our work with hundreds of thousands of leaders at all levels.