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The Financial Toll of Conflict in the Workplace



Workplace conflict is stressful, but is it really worth the time and resources for your company to tackle it?


The short answer: a resounding YES. It is estimated that American companies lose 359 BILLION dollars a year due to the direct and indirect impact of conflict in the workplace; the financial toll of diminished work performance, low employee morale, increased absenteeism, preventable lawsuits, higher healthcare costs, and rising employee turnover (Picincu, A, 2019). Let’s break this down a bit further:


  • Wasted Time: CPP CPT Inc., the company that publishes the Myers-Briggs Assessment and the Thomas-Kilmann Conflict Mode Instrument, ran a study related to the cost of workplace conflict in 2008 and found U.S. employees spend 2.8 hours each week dealing specifically with conflict!


  • Loss of Productivity: A HubSpot report found that lost productivity costs U.S. businesses a shocking 1.8 trillion dollars yearly.


  • Lawsuits: According to the EEOC, the average cost of an employee lawsuit is $250,000, with the out-of-court settlement averaging about $40,000 with 10 percent of wrongful termination and discrimination cases result in a 1 million dollar settlement. Not only that, but litigation costs have been rising 8% a year since 2008!


  • Employee Turnover: Studies predict that every time a business replaces a salaried employee, it costs 6 to 9 months’ salary on average. Built-In.com reports the average cost to replace an employee is $1,500 for hourly employees, 100 to 150% of an employee’s salary for technical positions, and up to 213% of an employee’s salary for C-suite positions (https://www.peoplekeep.com/)


  • Absenteeism: According to the CCH Unscheduled Absence Survey, absenteeism takes billions off the bottom line. The nation’s largest employers estimate that unscheduled absenteeism costs their businesses more than $760,000 per year in direct payroll costs, and even more when lower productivity, lost revenue, and the effects of poor morale are considered (“CCH 2007 Unscheduled,” 2007).


  • Health Costs: The World Health Organization (WHO) Global Burden of Disease Survey estimates that stress-related disorders are the second leading cause of disabilities. Individuals with stress and related disorders experience impaired physical and mental functioning, more work days lost, increased impairment at work, and high use of health care services (Kalia, 2002).


Bottom line: the impact of unresolved and unaddressed conflict can last years and cost thousands. Conflict resolution is a worthy investment in your company’s future.

Dr. CK Olivieri Blackmore is a licensed psychotherapist, social psychologist, divorce mediator, conflict resolution specialist, author, professor, and entrepreneur with over 15 years of experience with clinical issues pertaining to the queer/LGBTQIQA community.


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