Acas report – Estimating the cost of workplace conflict

26 May 21 by Charlotte Ashton
Workplace conflict

Workplace conflict is costing UK employers a staggering £28.5 billion, according to a recent Acas report.

Published by Professor Richard Saundry, from the University of Sheffield Management School, and Professor Peter Urwin of the Centre for Employment Research, University of Westminster, they  estimate that the cost of workplace conflict is an average of £1,028 per employee. Our senior solicitor, Charlotte Ashton, delves into the detail…

Alongside the shocking £25bn figure, the Acas report goes on to state that management of conflict is a key issue for organisations and “underlines the link between employee wellbeing and organisational effectiveness”.

Key findings from the report include:

  • An estimated 485,500 employees resign each year as a result of conflict
  • There are an estimated 374,760 formal grievances each year – costing an average of £951 in management time each
  • Approximately 1.7 million formal disciplinary cases are held each year – at an estimated cost of £1,141;
  • And the number of employees dismissed each year is around 428,000 – which results in a staggering figure of £13.1 billion in terms of recruitment and replacement costs.

The approximate costs to employers make for sobering reading and show that managers cannot afford not to take steps to ensure that workplace conflict is managed effectively.

Many employers focus on whether their actions in a situation will result in an Employment Tribunal claim, however, this report highlights that there is an escalation process with unresolved conflicts, and costs mounting as the matter progresses. This indicates that employers should take a keen interest in the early stage of workplace conflict, in order to try and manage issues where the costs are low.

The report goes on to explain that investment in effective and early resolution may have a significant return, and that organisations should place greater emphasis on repairing the employment relationship. Additionally, it acknowledges that often the tempting solution for managers is to fire employees or manage them out of a business but this brings with it the hidden or unclear costs of recruiting someone to fill the gap caused by such a decision.

Finally, emphasis is placed on having connected HR practitioners who understand and can work closely with managers, employees, and representatives.

It is important that employers seek expert assistance as soon as possible to firstly understand their options – and how best to proceed – but also manage costs and the situation effectively. If you are experiencing circumstances in which you require specialist employment law advice, please get in touch via our contact details below.

 


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Post by Charlotte Ashton

Senior solicitor, ESP Law Ltd

Charlotte has over 10 years’ experience in all aspects of employment law. She trained in-house with a large UK company, covering 45,000 employees, and moved to private practice on qualification. Charlotte enjoys helping growing companies understand their legal obligations and has given training and presentations to start up entrepreneurs, and business students, at a local University. Charlotte also specialises in business immigration law for the UK and has helped employers obtain sponsor licences in order to recruit from outside the UK.