The Conference Board of Canada predicts a labour shortage of nearly one million employees by the year 2020. Though not all agree whether there is a serious impending labour shortage in Alberta, many companies are increasingly concerned about how they will continue to attract and retain employees as the bulge of Baby Boomers enter their retiring years. How your organization handles conflict could be a major factor in your quest to seek out and retain quality new hires. There are tools available which can help you assess the cost of conflict within your organization, and ensure you make good decisions about how to improve your conflict resolution systems.
The American Institute of Stress cites reports that occupational pressures and fears are “far and away the leading source of stress for American adults and that these have steadily increased over the past few decades.” http://www.stress.org/occupational-stress-part-1/ . The cost to organizations and individuals adds up to hundreds of billions of dollars annually. And the number one cause of stress in the workplace? Poor interpersonal interactions are a major contributor, and the resulting indirect damages are hard to measure.
Assessing the cost of conflict must be considered from several different angles, reviewing both the indirect costs and the direct costs. Direct costs may include such measurable items as:
- Sick and stress leaves
- Sabotage, theft and damage
- Hiring as employees leave
Indirect costs may reflect on your company’s reputation. Do you have hidden hiring costs because prospective employees are turning down opportunities based on a poor reputation? In his book Workplaces that Work, Blaine Donais describes indirect costs to conflict, and provides a tool for measuring all costs. The indirect costs include:
- Manager time
- HR time
- Employee time
- Productivity costs
- Reputation costs
Presenteeism may be difficult to measure and may not even be apparent. According to the Canadian Mental Health Association (Ontario), http://wmhp.cmhaontario.ca/workplace-mental-health-core-concepts-issues/issues-in-the-workplace-that-affect-employee-mental-health/presenteeism presenteeism may cost employers up to 7.5 times greater than absenteeism in productivity loss. Formally presenteeism is described as the phenomena when employees go to work with ill health, experience lack of concentration or focus, and suffer from productivity loss. Their presence in the workplace may lead to interpersonal conflict and increased stress which affects others’ productivity as well.
These underground or indirect impacts on productivity may have a huge cost that is directly measurable against your bottom line. Costs are evident when managers spend increasing time resolving conflict with their employees; an employee shows a measurable drop in productivity; there is an increasing number of sick days or the water fountain gossip time becomes longer and longer. The hidden cost is to your reputation: your reputation as conflict-incompetent may affect your ability to attract and retain new hires.
How conflict-competent are you? The battle cry of the disgruntled employee centres on the concept of fairness.
“It is unfair, why does he get more overtime hours than I do?”
“It’s unfair, she is always late, and you’re not doing anything about it.“
The perception of fairness is a measure of conflict competence within an organization. And yes, fairness can be measured. Blaine Donais (www.workplacefairness.ca) has developed a Fairness Cost Analysis tool which can be used to put a price tag on conflict. This tool is one way you can put a price on low employee engagement and build a sound business case for taking steps to improve.
Consider the systems you have in place for addressing conflict within your organization. For example: are employees free to approach managers outside the chain of command through a formalized open door policy? If so, do managers receive adequate training in resolving disputes? Do employees know about the policy? Were employees involved with the development of the policy, and are they included in ongoing evaluations?
Another example of an aspect of your conflict resolution system is managerial decision making. Do you have firm and transparent policies in place for addressing such common concerns as tardiness, and sick days? Are these policies administered consistently through all departments and at all levels of your organization?
Your conflict resolution system may include conflict coaching, training, peer mediation and an ombuds office as well.
With your options for resolving conflict in mind (your “conflict management system”) how would you rank your organization on the following questions on a scale of 1-5:
- How accessible is the system to every employee in the workplace?
- How well does the system protect the legal rights of the participants?
- Has there been appropriate stakeholder consultation throughout development, implementation, and monitoring of the system?
- How cost effective is it?
- How well does the system encourage individuals to resolve their own conflicts?
- Do you have adequate facilities and services to support it?
- How well does the system improve itself through self-evaluation and system change?
Likely these questions will provoke some thought for you about your current approaches to conflicts and how effective they are. Now take things one step further and imagine ranking your organization against those in a comparable market sector and industry. How do you rank?
Imagine the possibilities. Your fairness ranking becomes a topic for discussion in the most compelling job interviews, and you are able to attract and retain employees because you know, and you can prove, that you treat them fairly, and have the systems in place to address conflict when it comes up. You can make a sound business case for investing in effective conflict management practices.
Marjorie Munroe, C.Med., W.F.A. is a consultant, mediator and trainer with the PULSE Institute and the Co-Director of the Alberta branch of the Workplace Fairness Institute.