The Unknown Cost of Conflict in the Workplace

February 7, 2020by Vanessa Rose

From gossip to claiming turf, retaliation, culture interventions, and recruiting, there is a lot of company time devoted to processing conflict in the workplace. From time spent away from the work to customer headaches and the dollars lost in between, it’s important for managers and business owners to understand the true cost of conflict in the workplace.

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The Cost of Conflict in the Workplace

Time spent on managing conflict may feel wasted compared to other more substantial duties, but once managers understand the cost of conflict in the workplace, their role should be clear.

The Actual Cost

While there are many prices to pay in order to manage disputes, let’s cut to the chase. The actual dollar cost of conflict in the workplace is higher than many would like to think. CPP Inc., the company that publishes the Myers-Briggs Assessment and the Thomas-Kilmann Conflict Mode Instrument, ran a study related to the cost of workplace conflict. While the study is from 2008 and costs may have changed since, the results are staggering. CPP Inc. found that U.S. employees spend 2.8 hours each week dealing with conflict which comes to $359 billion in paid hours (based on an average hourly wage of $17.95) in companies across the country.

Poor Morale

Other costs of relationship conflict in the workplace include poor morale and the lack of productivity that comes with it. This can attribute to chronic absenteeism and attrition, upping the ante on recruiting training costs. But poor morale can also spread quickly amongst a team of colleagues and create an angry environment with a “us vs. them” mentality that can make employees resistant to leadership and each other. Further escalated, this can begin to lead to theft, sabotage, and even violence given the right mix of things.

Interrupted Decision Making

Conflict tends to cloud the room and add to stress that may already be present. This, plus the sheer nature of conflict and our curiosity about it, can lead to a lack of effective decision making. With priorities and focus askew, employees and leadership alike might start making decisions based on the wrong metrics to satisfy their own anxiety, or simply because they’ve stopped caring about their input to the work.


One major cost of conflict in the workplace is how poor morale and decision making might lead to an overall shift in company culture, which may or may not include harassment coming from leadership or fellow employees. In conflict, people tend to take sides, and when this happens, it might make one person the target of frustration and anxiety felt on the team.

Legal Action

Harassment, as well as other issues that arise from conflict within an organization, can lead to legal action being taken. This can include lawsuits citing discrimination as well as workers’ compensation claims and it can cost the company a lot financially and also with regards to its reputation. This alone can be enough to spur on an employer to work toward managing or preventing conflict.

Stress-Related Medical Issues

No one’s job should make them sick, and yet in a conflict-heavy company where employees struggle with security, clear expectations, and without feeling as though they’ll remain physically and emotionally safe at the office, stress-related medical conditions can arise. This is not only unfortunate for the employee who has to take time off to tend to these needs, it can cost the company a lot in payroll and lost productivity.

Resolving conflict within an organization is more important than you may think. Tending to office disputes may seem like a waste of time, but the impact of ongoing or escalated conflict can be enormous. Contact Pollack Peacebuilding Systems today to get the right conflict resolution for your team.

Cost of Conflict in the Workplace

Vanessa Rose

Vanessa is a licensed psychotherapist and writer living in Los Angeles. When not on a mission for inner peace and conflict resolution, she enjoys making art, visiting the beach, and taking dog portraits. Always curious about self-improvement and emotional expansion, Vanessa also manages her own website which explores the unconscious and archetypal influences on how we eat, express, and relate.

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