Have you ever taken a step back and looked at your business and tried to quantify exactly how much time and money is being wasted on managing conflict and trying to keep the peace?
Throughout my commercial career I have seen countless workplace or employment disputes. From allegations of bullying, various types of harassment (sexual, racial and religious), acts of general misconduct (and a few of gross misconduct), general clashes of personality types, matters I can only define as “internal politics” and the list goes on….
(And these are just those which I consider matters of “internal conflict”! Let us forget for a moment issues that involve clients, customers, suppliers etc)
Typically organisations have dealt with such matters of internal conflict utilising a fairly similar route to resolution:
- Got a problem? Go to your manager and hope it can be resolved informally.
- If not resolved, then follow the disciplinary or grievance procedures.
- Got a problem with your manager? Go to their manager or directly to HR.
- Got a problem with HR? Go see the CEO/MD.
Problem with the CEO/MD?! Go and see HR!
At the end of the day, if unresolved, an employee ultimately has three choices – take it on the chin and learn to deal with it, resign and leave, or take the matter to an employment tribunal.
Did you say Employment Tribunal?! That is when the alarm bells usually ring, but by then it could well be too late to resolve the issue amicably.
Did you know? The cost to an employer of losing an employment tribunal for unfair dismissal is up to the equivalent of one full years salary, or just over £80,000 (whichever is the lesser of the two).
That said, one claim in 2017/2018 for unfair dismissal was over £400k! (There are circumstances where the £80k or annual salary calculation does not apply)
Oh and this does not include the costs of going court (fees and solicitors) and any additional compensation the court orders you as an employer to pay. So you can realistically add on a further £5-10k.
And what about the intangible costs?!
Statistically, the average manager spends 20% of their time dealing with problems. What?! Yes, almost 20% of each of your managers time is spent dealing with problems and taking their attention away from managing, building and growing your business. That is an average of a full day of work per week! Per Manager!!
Step back and consider the implications of this, and ask yourself…..“What is the true cost to my business?!”
- It is not just their salary, but what about the cost of legal advice for disputes headed for a tribunal of some sort?
- What about the cost of actually going to court?
- What about the loss in profitability that would have been gained if your managers were not dealing with disputes?
- And the knock on effect of the loss of business from all those individuals that person manages?
- What about the cost of employees taking time off either for stress-related sickness due to the disputes?
- Or the cost of suspending someone, potentially covering their roles or just losing out on their productivity for this period?
- What about the potential cost of a loss of clients. Forget for a moment about the loss in new business you may have gained, but what about the loss of existing clients who are getting diminishing levels of customer service?
- What happens if the people at the centre of the dispute leave either voluntarily or are fired as a result?
- What if the manager dealing with it leaves?
- What if other members of the team leave s a result of seeing their colleagues involved in a tribunal, or simply not being managed effectively as their manager is dealing with employment issues? The cost of recruitment can have another staggering cost in terms of time and money.
I could go on but sure you get this idea! It is very hard to narrow down the true cost of negative workplace issues, but I’ll bet it is far greater than you could have imagined!
So what is the answer?!
(I’ll give you a hint, it begins with an “M” and ends in “ediation” but find out how in Part 2!)