Policy briefing by Professor Richard Saundry shows £28.5 billion yearly cost of workplace conflict in the UK

The paper, titled The Cost of Conflict at Work and Its Impact on Productivity, estimates that conflict at work costs the UK around £28.5 billion per year, which is around £1000 on average for every UK worker; and suggests that about 9.7 million employees experience conflict at work in the UK each year. The study is based on previous research conducted by Professor Saundry and Professor Peter Urwin, Professor of Applied Economics at SOES, and was funded by the Advisory, Conciliation and Arbitration Service (Acas). 

The costs associated with workplace conflict include informal resolution or early intervention, mediation, loss of productivity, time off work, formal procedures, dismissal and resignation, and litigation.

The study explains why early intervention and investment in managerial skills are the key to bringing those costs down. It aims to convince leaders and policymakers to take the issue more seriously, as research shows that poor management damages organisational and economic performance, and the consequence of managerial failure is workplace conflict. It also argues that policy should be rebalanced away from litigation  and the tribunal systems towards resolving conflict within organisations.

Several recommendations emerged from the analysis, suggesting that organisations should improve recruitment and performance management practices; ensure that managers are trained in conflict management; and focus on managerial capability as a core component of government policy.

Talking about the research, Professor Saundry said: “Our analysis shows that investment in effective and early resolution designed to repair the employment relationship may have a very significant return. Too often organisations fail to address and resolve problems with performance or behaviour and instead resort to dismissal or managing staff out of the organisation. The costs of replacement and bringing new employees up to speed are often hidden or at least opaque.

“The scale of these costs means that it makes much more sense to develop sound recruitment and performance management strategies to avoid such problems in the first place. But perhaps most importantly, managers need to have the core people skills to be able to have quality interactions with their staff and to have difficult conversations when necessary.”

Find out more about research degrees at the University of Westminster.