The Cost of Conflict to Employers

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Can the cost of negativity and conflict be more than employers imagined? Learn the best techniques to avoid possible adverse effects that may cause you to lost employees and business.

Conflict in and of itself is neutral.  How we respond to conflict is either positive or negative.  Positive conflict is functional and can be the differences that help employees to collaborate successfully to innovate and create new approaches that are beneficial to their own and their organization's success.  Whereas, negative conflict is seen as dysfunctional, often where employees are not able to agree, and the outcome often results in negative attitudes toward one another sub-optimizing individual and organizational performance.

Unresolved negative conflict in the workplace is stressful for employees and it can impact customers in ways that is ultimately financially costly.  The cost of negative and unresolved conflict to employers is higher than you might imagine, and the results can damage profits as well as the infrastructure of a business.  In a national research study I conducted, it was found that struggling through a major economic downturn, a lot of American workers who kept their job were forced to cope with long hours, low pay, and shrinking benefits that increased employee stress levels.

Let’s look at just how expensive conflict can be for an employer.

Blame Game

Learn more about the cost of conflict to employeers

When employees are continually confronted with negative conflict in their daily jobs, they naturally start to dread coming to work.  This can mean more “mental health days” away from work and it can mean that employee performance rates suffer.  Instead of focusing on their tasks at hand of taking care of business, employees get focused on the problems they are confronting.  Trying to deal with conflict becomes more of a ‘blame game' mentality where one employee blames others.


Each of us deals with conflict in our own way.  Avoidance is a popular technique that can result in higher absentee rates and a lackadaisical performance.  Other employees may blow-up, losing their tempers yelling at each other, potentially causing everyone else in the office to feel awkward and stressed.  When one or more employee is dealing with negative conflict, they aren’t dealing with it on their own — everyone who works with or around them must deal with it in one way or another.  Representing the largest – and often most intense – area of conflict, personality clashes are problematic for organization leaders regardless of the size of their organization.

Increased Turn-Over Rates

Unhappy employees are not likely to stay with a job for very long, even if the benefits and the pay are attractive.  The implications of such turnover can be more than one might believe.  Literature and my experience supports the cost of losing one employee ranges from 30% to 150% of the workers’ annual income depending on the job of employee quitting (hourly or salary worker). 

Some conflict is expected but one will only deal with negative conflict for a certain period of time before they have had enough and quit. And, if one quits for a reason that is related to unfair treatment, they may decide to try to sue the company for wrong doing.  Leaders of new, smaller companies often believe they are immune to such legal matters, yet it can cost tens of thousands of dollars for an out of court settlement and potentially even more should it go to court.

If you find that your employee turn-over rate is much higher than normal and there is no explanation, look at how your staff interacts with one another.  Take a proactive approach to ensuring an open and trusting organizational culture is cultivated.  Chances are, there is at least one employee, or group of them, not working well with others spoiling things for everyone else.

You can handle employee conflict by educating your team members about ways they can eliminate negativity such as how to better handle employee differences through small group discussions, counseling, scheduling, job transfers, or providing opportunities for people to openly communicate their grievances one-on-one to get issues resolved.  In the event that this doesn’t work, don’t be afraid to ‘unhire' one or more employees before they do lasting damage to your company and you end up being an employer no one wants to work for.

The Damage to Your Brand

Your brand can suffer as a result of long-term unresolved negative conflict in a variety of ways.  The most common way is through your employee’s unprofessional interaction with the public.  Unless they are incredibly skilled at handling conflict without letting it seep into their dealings with customers, chances are there will be times when they may snap yelling at customers when they are stressed or fail to handle a situation properly.

This means you may not only lose that customer, but what they have to say about your company can also be damaging.  Remember, word of mouth advertising is incredibly powerful — and it works both to your advantage or disadvantage. 


The cost of negative conflict is much higher than most imagine.  Do what you can to manage workplace conflict. If you spot a problem in your organization, stop it immediately before it adversely affects your business.  There needs to be processes in place for employees to better learn how to manage and cope with the effects of negative conflict.  The best way I found to deal with such conflict is with a preventive incremental gains approach constantly working to create an organizational culture where communication is open between employees at all levels in an environment of trust and respect. Take care of your employees and they will take care of you!

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Dr. Rich Schuttler

Dr. Rich Schuttler

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About Dr. Rich

Dr. Rich is a mentor for executives, faculty, and students around the world in a variety of professional leadership and management settings. 

He is a customer driven, quality focused, innovative and engaging international public speaker, educator, business consultant, mentor and author with over 20 years of expertise.

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