Reducing the Cost of Conflict: A Practical Guide A People Resolutions webinar in partnership with HubCap Digital
Objectives To examine the Cost of Conflict to individual organisations and UK businesses and to the economy as a whole To look at the causes and effects of workplace conflict To identify practical ways to reduce the cost of conflict within organisations
Conflict PanelLinda Hoskinson Lindsay Soulsby Helen Ross Director, Head of Director Assessment Specialist Practice, People People Resolutions People Resolutions Resolutions
The stats... Conflict within British business costs over £33 billion per year, every year Over 80% of this cost is the damage incurred by business as a consequence of disputes (£27bn), rather than the legal costs (£6bn) 80% of disputes have a significant impact on the smooth running of business Source: CEDR, 2006
What is conflict?How about:Negative behaviour which occurs when people’s concerns appear incompatible‘Unmanaged conflict is the largest reducible cost in organisations today, and the least recognised.’ Dan Dana
Causes of ConflictEach organisation will have a different rangeof typical issues: Conflict may be about tasks Conflict may be about individual behaviours Conflict may be between teams One response might not suit all 40% of all grievances are related to relationships between colleagues (PRL Research – Oct 2010)
Conflict Spectrum Differences: Unresolved Differences : Concerns: • Are enjoyed • Are destructive • Are used to • Create • Focus onCollaboration good effect undercurrents people, the Conflict • Are resolved • Tension past constructively • Resentment • Create divisionsCo-operation • Focus on • Potential for • Negatively Negative issues, the conflict, affect decisions Behaviour future escalation or and • Bring people constructive productivityHarmony together resolution • Undermine Fighting • Create better relationships decisions
So, how much is conflictcosting your organisation?
Conflict SurveyIn October 2010 we carried out a conflict survey to determine: Conflict prevalence The impact on performance Organisational culture Managerial and HR conflict management capability122 responses from HR professionals in the UK45% of this sample were either HR managers or HR directors
At a high level what does this mean in terms of HR time?47% of our sample spend up to 10% of their week dealing with conflict 25.8% spend up to 20% of their week dealing with conflict =Over a quarter of HR professionals are spending 5 - 8 hours per week (46 working days p.a.) on conflict = £8,644 - £10,000 per annum per HR colleague Now, let’s take this to the next level!
There are many additional associated costs... Tangibles Intangibles Grievances Motivation Tribunals Employee Satisfaction Absence Culture Engagement Working Environment Turnover (early and normal) Loyalty Training and coaching Commitment Underperformance Teamwork and morale EAP services Whistleblowing investigations Disciplinary Cases Productivity loss for HR, direct participants and wider team/departments Compromise Agreements Engagement Leadership
From a quick glance at the tangibles, the costs start to escalate Activity Volume Average Unit Cost Total Cost Grievances 35 £2,500 £87,500 Tribunals 3 (lost) £18,000 £54,000 10.6 days (50% relating Absence £150 £7,155,000 to stress-related factors) Turnover 5.4% £3,000 £764,640 Total: £8,061,140Public sector organisation with 9,000 FTE
So, how do we move forward...Current State Gap Future State ROI33% of completed Investigation & Reduction in £68,000internal Report Writing reinvestigations byinvestigations skills training for 40% = £80,000needed to be 24 managers @ cost savingreinvestigated £12,000owing to poor Future cost nowevidence gathering £120,000and inefficientreporting at a costof £2,000 x 100investigations£200,000
Reducing the Cost ofConflict: A Practical Guide
Avoid jumping to the solution too quickly... Once you know what conflict is costing your organisation the next step is NOT to jump into solutions, but step back: You need to understand what is causing the conflict ...
Complete an assessment to get to the key issues...Our Conflict Assessment measures four factors:1. Conflict Amount - how regularly conflict occurs (hot-spotting conflict areas)2. Conflict Type: Channels through which conflict occurs Conflict across and within levels Behavioural manifestations3. Organisational Conflict Management - how the organisation addresses conflict4. Individual Conflict Management – employees’ confidence to deal with conflict in relation to organisational policy and process
The ProcessInitial consultation Survey analysis, MI, policy review Qualitative investigations Report and recommendations Implementation
So, where are we...We’ve: Identified the ‘current state’ Formed robust analysis as to why it’s happening Calculated ROI based on the gap between the current and future statesNow we’re ready to determine howbest to move forward…
Prevention through...There are many ways in which to help prevent workplaceconflict. Often through a combination of the following: Learning – webinars, face to face, e-learning Coaching Performance and People Management Organisational Development Effective Communication Environment and Psychological contract Framework – policies/procedures/systems and processes Culture – is this aligned to the future of your business?
Evaluation and Measurement are critical... Numbers are your friend not your enemy Ensure you capture good quality MI so are able to effectively evaluate your conflict management initiatives Review your data on a regular basis to determine what’s working well and what’s not If it’s not working well, be prepared to re-evaluate and change
Summary Cost the issue DetermineChange or why it’s reinforce happening Implement Evaluate change and based on Measure ROI
Thanks very much for your time From the team at People Resolutions and Hub Cap Digital