Rise in workplace conflict set to cost businesses billions

Workplace conflicts are set to increase as the economic downturn deepens, costing businesses billions of pounds a year, experts have warned.

Robert McHenry, chief executive at business psychology firm OPP, has warned that as workloads swell, budgets tighten and more jobs are cut across industries, workplace stress levels will heighten, leading to increased disputes between colleagues.

His warning comes as an OPP survey, published jointly with the Chartered Institute of Personnel and Development (CIPD), found that poorly managed conflicts at work cost British employers more than £24bn a year.

McHenry said: "Workplace conflict is nothing new. But in the context of the current economic downturn, businesses could see steep rises in conflict as workloads increase, budgets shrink and stress levels rise. The fact that there are too few managers in British business with the insight to handle it effectively could cost us dearly."

The report, Fight, Flight or Face It, found that more than 370 million working days were lost in 2007 alone as a result of personality clashes, heavy workloads and stress at work, causing the average UK employee to spend more than two hours a week dealing with conflict.

The study surveyed thousands of staff in nine countries across three continents, in businesses of all sizes and in all sectors. Half (49%) felt that personality clashes and warring egos were the number one cause of workplace conflicts - factors requiring close management in tough economic times.

Linda Holbeche, director of research and policy at the CIPD, urged employers to make conflict management an integral part of leadership and management training. She said: "Conflict is an inevitable part of the workplace and can be very damaging and costly if not managed properly. Managers must be able to identify the early signs of conflict and intervene and diffuse situations before they escalate if teams are to work productively and harmoniously."

The research also found:

• 54% of employees want managers to address underlying tensions before they escalate into conflict.
• 58% of employees who have had relevant training now look for win-win outcomes from a workplace conflict.
• In countries where such training is more prevalent, positive outcomes from conflict are far more common.
• 27% of employees have seen disagreements involving personal attacks or insults.
• 16% have actually seen conflicts lead to people being fired.