Recommended Insights
Recommended Insights

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.

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 Management, Emotional Intelligence, Listening to Understand, Psychological Safety & Trust, and more.

SUBSCRIBE

Subscribe to our eNewsletters to get the latest on cutting-edge, leadership insights & research.
March 10, 2020
Leading Effectively Staff
About the Author(s)
Leading Effectively Staff
This article was written by our Leading Effectively staff to help you and your organization's leaders at every level. Want more content like this? Subscribe to our emails to get the latest research-backed articles, webinars, insights, and news about leadership development solutions sent straight to your inbox.

Related Content

Why (and How) to Confront Problem Employees
Leading Effectively Articles

Why (and How) to Confront Problem Employees

Have a difficult colleague? Confrontation may seem scary, but when done correctly, it leads to positive outcomes for everyone involved. Here’s how to get the best results.

More
6 Tips for Leading Through Conflict in the Workplace
Leading Effectively Articles

6 Tips for Leading Through Conflict

Inevitably, leaders have to manage conflict — either between direct reports or with a colleague. These 6 tips will guide leaders through resolving conflict in the workplace.

More
The 7 Costs of "Conflict Incompetence"
Leading Effectively Articles

The 7 Costs of “Conflict Incompetence”

When workplace conflict is mismanaged, costs mount, many of which are difficult to quantify. In order to identify the real cost of conflict in your organization, consider these 7 factors.

More
Betrayed in the Workplace? 7 Steps for Healing
Leading Effectively Articles

Betrayed in the Workplace? 7 Steps for Healing

A teammate takes credit for your work. Even minor betrayals at work can eat away at us. Here’s how you can begin to heal when trust is broken, and how to prevent it from happening again.

More

Please update your browser.

CCL.org requires a modern browser for an enhanced and secure user experience. Internet Explorer is no longer supported or recommended by Microsoft. The Center for Creative Leadership recommeds that you upgrade to Microsoft Edge or similar.

Brave

Chrome

Edge

Firefox