How much is the high cost of unmanaged conflict costing your organization

Frustrated guy with his smart phone to his ear and his other hand on his forehead while he is looking at his laptop

Unmanaged conflict has a significant impact on morale, turn over, and the bottom line. What if you could collaborate constructively instead? Conflicts, disputes, conflict resolution, dispute resolution and healing are key elements to address for effective leadership. Exploring the costs, employees leaving, ongoing implications, your challenges as a leader, and the implications on trust, are things you can address going forward. This article takes a fresh look at this issue and provides you with tools to help you, your team, and your organization. By managing conflict, it is possible to reduce wasted resources, enhance relationships, and be more profitable.


The costs of unmanaged conflict


Unmanaged conflict has a direct impact on the mental health of your employees. This results in greater absenteeism, greater turnover, and the perception of your organizational reputation. In short it costs you productivity, customers, and retention. Great organizations recruit, hire, and retain the best employees. With unmanaged conflict time is lost gossiping, not focusing on work, poorer communication, potential violence, and potential litigation. In today’s world it has nearly become a regular news item about violence in the workplace. None of this is good. You have to manage conflict. Exploring this further take a look at the high cost of just turnover.




People do not simply leave organizations. Rather they leave poor managers. Poor managers generally do may not manage conflict well and can even be the source of conflict in the workplace. This article provides a host of statistics for your consideration. According to Gallup 51% of workers are looking to leave their current job.

The cost of replacing new employees is 30% to 50% of their annual pay. The cost of replacing mid-level employees is 150% of their pay.

The attrition rate of disengaged employees is 12X higher than engaged employees on an annual basis. Clearly, turnover costs are high. Addressing the reasons behind turnover are critical to uncovering the root of the problem. There are other costs to consider too.


Ongoing implications


Here are other costs to consider associated unmanaged conflict:

  • Recruitment,
  • Onboarding,
  • Training,
  • Loss of key personnel,
  • Distractions, and
  • Severance.

Unmanaged conflict may be short term, a festering issue, and in some cases, it can have been ongoing for years. Without developing trusting relationships, open communication, and taking action it is not possible to truly understand the problem. If not addressed, unmanaged conflict can result in workplace violence and potential litigation. Additional statistics indicate:

  • 44% of employees report losing an hour or more per day due to stress
  • 37% of employees report losing 15 to 30 minutes or more per day due to stress
  • Stress is impacting 80% of the workforce.

As a leader the question is, what can you do?


Challenges as a leader


Do not assume. Many employees do not bring their concerns to their leadership. Employees may be reluctant to bring this to your attention. Employees may feel they may be assumed to be a complainer or that you simply do not want to hear and address the situation. What can you do? Build connecting relationships with your people, team leads and managers. Managers may not have been trained on what to look for or how to proceed if they find conflict issues in the workplace. The issue may be systemic in that there is no policy or procedures on how these types of issues should be addressed. What is the impact? Continued unmanaged conflict. What are the implications on trust?    


Implications on trust


Trust is one of the foundational elements associated with taking advantage of The Collaboration Effect.  The Collaboration Effect enhances relationships, resources, and results by fostering trust.

Trust is a key factor for high performing organizations.

By connecting relationships with employees, and listening actively by checking your assumptions, being curious, and suspending judgment, you may be surprised at what you might find. To restore trust there are concrete actions you can take.


Actions you can take


Conscientious, proactive managers address workplace conflict timely. They acknowledge the situations for starters. Next, they keep an open mind and encourage dialogue to further understand the situation. By being open and

objective managers are there to support the parties involved in neutral terms.

They will need support to from mentors, peers, and their leadership. This should be a corporate wide issue.

A good listener helps the parties in context. This may allow the parties to look at the situation differently. The focus should be on the problem.

Be tough on the problem and gentle on the people.

Behind every position is at least one interest. Work on uncovering interests with the parties. Interests are the seeds for solutions.

Everyone should be encouraged to take responsibility for their part of the problem and their actions.

The focus should be on the future and what “we” are going to do to address this concern.

Help the parties to understand that indeed this is an emotional issue. That may be part of the problem. Emotions need to be addressed.

This leads into forgiveness.

Only by forgiving others can parties move on.

Forgiveness involves acknowledgement of what took place with the broken trust. Forgiveness should be done without blame. Rather this is an acknowledgement of what happened, what was learned, and what can be applied in the future. The attempt is to avoid this from happening again.

Only then is it possible to move forward.


Follow up activities


The ultimate skill set to assist others is mediation. Would a talented experienced mediator help you? Would mediation training help? Explore your needs and assess appropriate actions. Learning and applying mediation techniques that focus on not only mediation, but also on workplace conflict will make a significant difference in the future. The implications are with all of the areas addressed above.

About the author

Mike Gregory is a professional speaker, an author, and a mediator. You may contact Mike directly at and at (651) 633-5311. Mike has written 12 books (and co-authored two others) including his latest book, The Collaboration Effect: Overcoming Your Conflicts, and The Servant Manager, Business Valuations and the IRS, and Peaceful Resolutions that you may find helpful. [Michael Gregory, ASA, CVA, MBA, Qualified Mediator with the Minnesota Supreme Court]