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Early intervention saves money: The impact of mediation on reducing the cost of workplace conflict

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Report on costs of workplace conflictEarly intervention into resolving conflict through workplace mediation works and can save costs.

Headline findings on costs of workplace conflict

In early May 2021, ACAS published an analysis prepared by Professor Richard Saundry of the University of Sheffield Management School and Professor Peter Urwin of the Centre for Employment Research, University of Westminster, entitled “Estimating the Cost of Workplace Conflict”.

As the report itself states, the headline statistics are startling – in total, the cost of conflict to UK organisations was £28.5 billion - the equivalent of more than £1,000 for each employee. Close to 10m experience conflict at work. Of these, over half suffer stress, anxiety or depression as a result; just under 900,000 took time off work; nearly 500,000 resigned, and more than 300,000 employees were dismissed.

They go on to state that “early intervention in conflict saves money, time and promotes better wellbeing, our analysis provides employers with a new reality check”.

Key messages from ACAS Report

The report emphasises three particular messages,

Firstly “conflict competence” is an essential ingredient in good management.

Secondly, there is a critical time to intervene, this is before conflict reaches formal workplace procedures.

Thirdly, while conflict can be very bad and damaging to people, as a business it can also be creative.

Does workplace mediation work?

The report will be of particular interest to those who practice and promote the benefits of workplace mediation. Surprisingly, only 5% of the respondents to the survey had taken part in some form of workplace mediation, whether internally or externally provided in 2018 to 2019. Nearly three-quarters of those who underwent mediation also reported that their conflict had been “fully or largely resolved”. Somewhat frustratingly, the report did not find any qualitative evidence giving feedback as to whether the participants found the process to be helpful and/or satisfactory.

Against the background of the finding that the largest proportion of the costs of conflict are connected to an ending of the employment relationship – either through resignation or dismissal, the report highlights that most workplace problems start with a clash of interests of a disagreement. At this point, they can often be resolved informally through discussion with the manager. If this is not possible or they are more serious, it may be necessary to involve other parties, such as HR or representatives. However, this “inevitably formalises the issue and it becomes more likely that there will be negative impacts in the form of presenteeism or possibly absence”. In this regard, mediation is regarded as a “semi-formal” mechanism, used when conflict was not resolved by more informal means.

The report recognised that the longer the resolution process takes, the more likely it is that the employees involved will suffer negative impacts, with consequential costs for the organisation. If mediation is engaged at an early stage, success is more likely, whereas if mediation is employed as a last resort, not only will costs have already escalated, but it is much less likely to be effective.

What is workplace mediation?

One of the interesting features of the report was a certain lack of clarity on the part of the respondents as to what constituted “mediation”. As the investigators state, workplace mediation is not (in the strict sense), an informal process – even if performed by internal staff mediators.  It follows a specific structure, requires trained, qualified mediators and is a challenging experience for participants.  ...Furthermore, within policy debates, mediation is seen as part and parcel of a desire to shift towards informal resolution.

However, of the 5% of respondents who stated that they had taken part in some form of workplace mediation, whether internally or externally, the report concluded that this figure seemed excessive and may be explained by respondents, assuming that formal facilitated discussions with managers and HR represent “mediation”.

What is the difference between workplace mediation and facilitated discussions?

The key significant difference between true workplace mediation and these facilitated discussions is what underpins the success of the process. An external mediator who is independent of the employer is more likely to be able to engage with the participants on a fully open and honest basis, centred around the underlying principle that all discussions between mediator and participants will be entirely confidential and not “what they feel their manager needs to hear”.

As indicated above, the following key points should be noted:

  1. Workplace mediation base success rate of 74%. It is possible that this figure may be even higher if the figures for independent mediators could be separated from those formal facilitated discussions with managers and HR, which the term is sometimes ascribed.
  1. The earlier that mediation is engaged, the more likely it is to be successful.
  1. Mediation is more likely to save costs when used as an initial alternative, as a formal procedure such as grievance and disciplinary procedures, rather than a process which sits alongside these.

To book a mediation

Further information

Online mediation - would it work for my clients?

Workplace mediation - What's that all about?

Resolving workplace conflict - Bash on or call someone in?

Help! When should I be using workplace mediation?

Why is mediation so important?