The True Cost of Resolving Work Disputes

resolving work disputes

Conflicts in the workplace are common and to a degree, unavoidable, especially in high stress environments. However, even for small trivial disputes, the hidden costs involved in resolving work disputes can be surprisingly high. 

According to ACAS, the UK conciliation service, resolving work disputes can cost employers £28.5bn each year. (Roughly £3000 a year for each person involved in a conflict). 

Throughout 2018 and 2019 businesses spent a total of:

  • £10.5bn for disciplinary dismissals. 
  • £11.9bn on resignations.
  • £2.2bn on absences related to disputes. 

Is the Money Being Spent Working?

With all this money being spent, an employer should hope that these measures are working. However, statistics here are a mixed bag. 4 out of 5 employees on average agreed to take action in response to conflict yet only a quarter would discuss the issue with the other person involved. 

Further statistics from ACAS would show that a little over 50% of workers would discuss these issues with their managers. However, informal discussions here still costs employers roughly £231m each year. 

Formal Grievances

The cost for a business owner for a formal grievance is roughly £951, which for the entire UK equates to around £356m. Where disciplinary proceedings follow, it costs the economy a further £2bn. 

Resignations and Dismissals 

Resignations and dismissals make up for the largest proportion of costs related to workplace conflicts in the UK. Legal action related to ending employment relationships throughout 2018 and 2019 came to £282 million each year with an extra 264m spent just on legal fees alone. Compensation for employees would cost employers around £225m each year. 

How Can Employers Reduce These Costs?

A simple method of avoiding these costs for employers resolving work disputes to do so early before they result in any terminations of employment or legal action. This requires employers to have strong leadership and foster an environment of good communication so that arguments can be discussed easier and don’t grow out of hand. 

Employers should also consider staff training, especially for managers on dealing with conflicts effectively. They should also make sure that all employees are aware of work policies, especially for where it relates to larger issues such as bullying and harassment.

You can read more about the statistics in this article that are provided by ACAS, here. 

For any enquiries regarding handling disputes, and for more HR advice, contact us.