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  • David Toll

What is the cost of conflict to your business and what do you do about it?

Updated: Jul 13, 2022

Conflict within the workplace is common. People will not always see eye to eye on issues, some are poor communicators, some are more competitive than others, some don’t like to be told about different ways to approach a task and sometimes people just don’t like each other. Any of these reasons plus a host of others, can be the cause of conflict between people in the workplace. But is there a problem in having conflict between people working within the same organisation and does it have a negative impact on the business? If so can that impact be quantified and are there ways to do something about improving the situation?

What is conflict? Any workplace disagreement or issue which disrupts the flow of work.

The productivity commission in Australia has estimated the cost of workplace conflict to be in the order of $ 36 m per year. Conflict consists of bullying /harassment, personal attacks


What can be the cause of workplace conflict? ‘personality clashes’ and ego differences, stress, heavy workloads, workplace culture


What is the cost? Time to resolve a conflict. Time involved in a conflict (estimated to be 2.1 hours per week per employee, sickness/absence, project failure, staff moving from the organisation or business unit, mental health (stress and its associations)

‘Bullying’ is generally accepted as being repeated and unreasonable and which creates a risk to the health and safety of people within the workplace. A bully can be a supervisor, subordinate or a colleague

Fair Work Act 2009 applies in most cases and has in fact been extended in certain places where shocking examples of bullying have resulted in the death of somebody experiencing the bullying. Common law remedies also exist along with anti discrimination legislation, workers compensation or OHS legislation.

Conjecture exists about the prevalence of bullying internationally but a 2012 AWB study found that of a sample group of 5743, 6.8% of the adult employed workforce experienced bullying in the past 6 months. The Australian Public Service Commission reported that 17% of respondents to a survey indicate they had been subject to harassment or bullying in the preceding 12 months. [1]

The financial cost of bullying alone is estimated to be between $6b billion and $36 billion pa. Admittedly that is a large variance is predicated upon assumed prevalence rates obtained in studies conducted in 2002. Perhaps a more insightful and useful measure is one where it is estimated that each employee spend about 2.8 hours a week in conflict situations (which is broader than just bullying as per the above definitions). That’s about a week per month, per employee; a quarter of your staff’s time is taken up with engagement in workplace conflict. What does that look like in your bottom line?


[1] Australian Public service Commission 2014a, P.239. cited in performance benchmarks of Australian business regulation, March 2010. www.pc.gov.au/inquiries/completed.

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