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Employee Mediation: A Cost-Effective Approach to Workplace Conflict

Employee Mediation

Workplace conflict is pervasive and costly. According to a survey by the Society for Human Resource Management (SHRM), 60 percent of human resources professionals reported that their organizations experienced workplace conflict at least once a month. A study by CPP Inc. found that employees in the United States spend an average of 2.1 hours per week dealing with workplace conflicts, which translates to approximately $359 billion in paid hours annually.


According to studies conducted by Accountemps and the American Management Association, the primary causes of workplace conflict include:  


  • Differences in work styles and personalities (49 percent)

  • Stress (34 percent)

  • Workload (33 percent)

  • Poor communication (26 percent)

  • Conflicting work priorities (41 percent)

  • Egos (28 percent)

  • Poor communication (27 percent)


The Human and Financial Costs of Workplace Conflict

Workplace conflict has a significant impact on our ability to be productive. The CPP Inc. study estimated that workplace conflicts result in a 29 percent decrease in employee productivity. Research published in the International Journal of Business, Humanities, and Technology highlighted that unresolved workplace conflicts can lead to increased absenteeism, reduced motivation, and decreased job satisfaction among employees.


Of course, reduced productivity has a direct impact on an organization’s bottom line, but that is not the only cost. Workplace conflict also has a direct impact on employee engagement and retention. A Gallup study revealed that 65 percent of employees who experienced frequent conflicts at work were actively disengaged, making them more likely to seek employment elsewhere. According to a study by the University of Tennessee, workplace conflicts also lead to employee turnover, absenteeism, and litigation expenses. Additionally, workplace conflicts can lead to work stoppages or strikes, further impacting organizational productivity and revenue.

Watch: Resolving Workplace Conflicts Through Employee Mediation

Reduce the Costs of Workplace Conflict with Employee Mediation

Employee mediation is a valuable tool that can help resolve conflicts and improve workplace relationships. Wherever humans gather, conflicts are inevitable, but how they are managed can make a significant difference in employee satisfaction, productivity, and overall organizational success. Employee mediation offers a structured and collaborative approach to resolving disputes, and its benefits extend far beyond just resolving immediate conflicts.


Six Benefits of Employee Mediation

Creates Space for Open and Transparent Communication. One of the primary benefits of employee mediation is that it provides a neutral and confidential space for parties involved in a conflict to discuss their issues. Unlike traditional methods where conflicts are often escalated to HR or management, mediation empowers employees to take ownership of the situation and work towards finding mutually agreeable solutions. This confidentiality encourages open communication and honesty, as employees feel more comfortable expressing their concerns without fear of reprisal or judgment.


Cost Effective. Employee mediation is a cost-effective alternative to formal grievance procedures or litigation. Resolving conflicts through mediation can save organizations significant time and resources that would otherwise be spent on lengthy investigations, legal fees, and potential settlements. By addressing conflicts early and effectively, mediation helps prevent issues from escalating into larger and more costly problems that can impact employee morale and productivity.


Supports Positive Connections in the Workplace. Another key benefit of mediation is its focus on preserving relationships and fostering a positive work environment. When conflicts are left unresolved or poorly managed, they can lead to strained relationships, increased tension among team members, and decreased collaboration. Mediation aims to promote understanding, empathy, and respect among employees, creating a foundation for healthier and more productive working relationships.


Empowered Problem-Solving. Mediation encourages parties to explore creative and flexible solutions that meet their individual and mutual underlying interests and needs. Unlike formal disciplinary actions or one-size-fits-all solutions, employee mediation allows for personalized and tailored agreements that are mutually beneficial. This collaborative problem-solving approach can lead to win-win outcomes where both parties feel heard, respected, and satisfied with the resolution.


Create a Culture of Peaceful Conflict Engagement. Employee mediation also supports organizational growth and development by fostering a culture of peaceful conflict resolution and communication. When employees see that conflicts are handled constructively and fairly, they are more likely to address issues early on rather than letting them escalate. This proactive approach can prevent conflicts from becoming chronic or recurring, promoting a more harmonious and productive work environment.


Supports Professional Development. The skills and techniques learned during mediation sessions, such as active listening, empathy, and negotiation, can benefit employees beyond resolving specific conflicts. These skills contribute to improved communication, teamwork, and leadership abilities, enhancing overall employee effectiveness and job satisfaction.


Employee mediation offers numerous benefits to organizations and employees alike. From resolving conflicts efficiently and cost-effectively to promoting positive relationships and fostering a culture of collaboration, mediation plays a vital role in creating healthier and more productive workplaces. By investing in mediation programs and conflict resolution training, organizations can proactively address conflicts, enhance employee engagement, and drive long-term success.


Workplace Peace Institute is an organization systems design and research firm that is singularly focused on creating workplace cultures where people thrive. Workplace Peace Institute supports small to mid-sized businesses in optimizing employee engagement, maximizing organizational productivity, and improving profitability by infusing human security and dignity as foundational attributes of their business model. Our Leadership Academy supports leaders in honoring basic human needs and dignity needs in the workplace, so they can actualize human potential in the workplace. The online Leadership Academy optimizes competencies in human behavior, communication skills, conflict resolution, and Diversity, Equity, Inclusion and Belonging to create highly engaged workplaces where basic human needs and dignity are consistently honored. All our courses are offered online and can be customized for in-person workshops and seminars.


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