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Workplace conflict may be frustrating, but is it worth the incredible effort required to tackle it? Authors Craig Runde and Tim Flanagan suggest taking a close look at the financial and human costs of not being able to reduce conflict — a problem they call “conflict incompetence.”

In their book, Becoming a Conflict Competent Leader, Runde and Flanagan write that “when conflict is mismanaged, costs mount. Some out-of-pocket costs like absenteeism and lawsuits are relatively easy to see and compute. Others, like poor decision-making, lost opportunities and diminished quality of working relationships, can prove more costly, but they are more difficult to quantify.”

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

No. 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.

No. 2: Employee turnover. When conflict is severe or ongoing, employees are likely to seek a better place to work, particularly when the job market is strong. According to Runde and Flanagan, “the replacement cost of finding, training and bringing a new person up to speed can often exceed the annual salary of the employee who leaves. It certainly costs more than addressing conflicts in the first place so employees do not get frustrated and leave.”

No. 3: Grievances, complaints and lawsuits. If problems are handled effectively from the start, many issues can be resolved informally at 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.

No. 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.

No. 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. As Runde and Flanagan point out: “A significant number of these assaults come from disgruntled customers, patients, coworkers and employees. The emotional toll on the targets of the violence as well as on their coworkers can be enormous and can increase the costs associated with retention, absenteeism and health care.”

No. 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 poorer quality decision-making.

No. 7: A poisoned workplace. Conflict causes all sorts of unpleasant emotions. 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.

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