You Won’t Scale Your Company if the Office Is a Combat Zone
Updated: Apr 14
Conflicts within an organization can prevent it from reaching its full potential. Here’s why it hurts the bottom line and how to fix the problem.
Did you know 85% of all employees deal with workplace conflict at some point and 36% of U.S. workers deal with conflict consistently? Personality conflicts, workplace stress, and heavy workloads are the central causes of workplace disputes and can lead to a toxic environment if you don't handle them efficiently.
Naturally, I hear about conflict often in my coaching calls, and this is when I put my “business therapist” hat on and dig into my toolbox for communication tools, tips, and strategies.
Since conflict is often a time-consuming activity where employers are left carrying the financial burden due to missed hours or even workdays and employee turnover, I am keen to resolve these issues fast.
Conflict is costing you money
Employee conflict in the workplace is sure to hurt any business financially. Whenever workers spend their time dealing with conflict, rather than working on the tasks assigned to them, it costs the company money.
Research reveals the average American employee spends 2.8 hours per week dealing with workplace conflict. Seriously. That’s the equivalent of nearly one-and-a-half workdays per month spent navigating the social environment within the organization rather than working. Businesses looking to scale up cannot afford to lose those hours.
Your workers are avoiding work
The problem goes beyond employees wasting time at work, however, as many use sick days to escape ongoing or potential conflicts. Information suggests that 25% of employees miss work at least once per year because of conflict with a boss or co-worker.
A client of mine just recently had his most highly compensated employee take a leave of absence for a few weeks for personal reasons. During this employee’s absence, other members of the team noticed more got accomplished while he was away. So, was this leave for personal reasons due to a conflict with the CEO or other co-workers?
From a financial standpoint, absentee employees cost companies an annual average of about $3,600 for hourly workers and $2,650 for those on salary when factoring in wages, replacement workers, and administrative costs. Many of those missed days are a method of conflict avoidance, and the added costs make it difficult for a company to thrive.
Your employees are quitting
On top of employees missing workdays, internal conflicts can reach the stage where one or both individuals want to quit the organization. Such turnover exponentially increases employee costs in recruiting, hiring, training, and severance, not to mention the sunk costs of hiring and training the departing employee. Entrepreneur magazine put the cost of one lost employee as high as $70,000, depending on the industry. That is a lot of money to hand over for entirely preventable reasons.
What you can do to help
Is workplace conflict hindering your business? If so, here’s what you can do to help prevent it. There are steps you can take to keep employees happy and defuse workplace conflicts before they reach their breaking point.
Establish a strong workplace culture
It all starts with building a workplace culture that prioritizes employee engagement, keeping all members of the team on task as much as possible. It’s why the Rockefeller Habits checklist – renowned for helping companies scale up by establishing focus, discipline, and vision – leads off with habits meant to foster engagement, accountability and communication:
• Team members understand each other’s differences, priorities and styles.
• The team meets frequently (weekly is best) for strategic thinking and execution planning.
• The team is able to engage in constructive debates and all members feel comfortable participating.
Retreats, workshops, and seminars are also a great way for a company to establish and strengthen the culture within its leadership team. Very often these retreats have team-building activities to help a team foster healthy communication, engage in healthy conflict and debate ideas to improve the company.
And, using behavioral-profiling tools, like DISC, gives team members an objective, reliable means for understanding and describing one another, which provides two powerful benefits. First, it increases the likelihood team members will admit their weaknesses and strengths to one another. And, by providing team members with a common vocabulary for describing their similarities and differences, you make it safe for them to give each other feedback without feeling they are making accusatory or unfounded generalizations. I have often observed how previously guarded team members more comfortably call out one another’s strengths and weaknesses.
A management approach that builds trust and rewards good work can help, because people want to feel appreciated, and many leave because of the boss, not the company. So, strive to be an employer that workers want to work for, rather than one they can't wait to escape. Also, employees who receive steady recognition from their managers are five times more likely to stay at a job, and when you manage their workloads effectively, they are eight times more likely to stay.
Do an organizational assessment
You'll want to assess your organization to make sure you have the right people in their ideal roles. Ask yourself this question: Would you enthusiastically rehire every person within your organization for his or her current job?
If not, it’s time to start making some changes to your hiring process.
Since the majority of workplace conflicts are personality based, look for red flags that could lead to issues in the future. You'll never get this aspect 100% right, but don't be afraid to dig into reasons why job candidates left their previous employers. We use DISC along with the tools from Brad Smart’s Topgrading® and Geoff Smart’s Who, which significantly improve the hiring process and drastically reduce the odds of a mis-hire. Using these hiring processes, you can often spot behavioral patterns, because if an individual has encountered personality conflicts with co-workers in every past position, you can assume this person is part of the issue.
Put your best foot forward
Whether you’re looking to scale your business or planning your exit strategy, leaving it in the best possible shape is advantageous to you, your management team, and your employees.
The Goldhill Group has spent more than 10,000 hours coaching business owners, leadership teams, and sales professionals, turning struggling organizations into seven-figure success stories. Contact us today to learn how we can help you lessen the effects of conflict in your workplace.