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Conflicts cause costs – a fact that every manager is familiar with. However, the amount of these conflict costs is often underestimated. This blog contains a simple
calculation method and my suggestion to resolve the conflicts, not only for social reason but also from an economic point of view.
Every single controller and cost accountant may forgive me: conflicts costs can easily be calculated, if you ignore the need for perfectionism and allow your experience to come forward. In my opinion, the assessment of the costs should not be about calculation down to the last cent. Instead, put your emphasis on estimating the cost incurred, which can be significantly reduced by implementing appropriate intervention measures.
Let us start with a simple calculation example. Assuming, that there are conflicts looming in your marketing department. Your manager (salary level 5.500 per month) and four employees (average salary 3.000 per month) spend an average 17% of their working time on resolving the “disagreements”. During this particular time they are not the productive workers you want them to be and cannot entirely give attention to the company and their goals.
(5.500 x 14) + (4 x 3.000 x 14) = 245.000 personnel costs per year.
245.000 x 17% = 41.650 conflict costs per year.
Those who do not consider this amount to be essential, please be aware that the conflict costs correspond to the annual salary of one employee (3.000 x 14 = 42.000)!
It is worth solving the conflict. You find numerous providers on this market, who dedicate their work to this topic in form of mediation and / or team building sessions. These instruments are crucial and useful, however, they have one decisive disadvantage: they are slow acting and time-consuming in terms of their implementation.
The good news is, that even small intervention steps in regards to internal communication show an immediate impact and can decrease your conflict costs significantly. Remember, a reduction of non-productive time by only 5% saves you costs in the amount of 12.000,-!
Decide to take a different path than your competition. Start now with improving your company’s internal communication. As communication trainer I am more than happy to support you every step of the way.
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