This month’s guest blogger is Arran Heal.
Arran Heal is Managing Director of workplace conflict management experts CMP Resolutions. An established and highly-regarded conflict management consultancy, delivering solutions since 1989 to a wide range of private, public and third sector organisations. We have played a pivotal role in the UK in making good conflict management matter at work. Arran has had a successful career in fast-moving consumer goods with Coca-Cola, Greene King & Cobra Beer, before founding a new e-commerce business model and acting as a consultant to SMEs on innovation and business development.
There’s data HR want to share with the board – recruitment, the impact of talent management, of performance pay – and there’s data they prefer to slip under the carpet.
Details about stress, grievance and disciplinary cases are the unwanted negative, seen as something to be kept out of the employer’s story it tells about itself. It’s just one part of a situation where employers have a tendency to shut down and ignore any kind of negativity or challenge, sometimes not even willing to make use of mediation between staff in conflict because of the opportunity it gives for frank conversation.
But this kind of data is fundamental for understanding your workplace: specific issues around management styles, work practices and general employee relations and workplace culture. They’re part of the reality which provides HR with the evidence needed to make strategy, justify further reviews, support and follow-up action. A people strategy just built on good news is based on sand.
Practices vary a great deal. We work with some organisations who have very little or even no people data to draw on at all; others who use a balanced score card to identify their financial, internal, customer and learning and growth metrics. While on the surface these more sophisticated HR data practices might look like it’s giving the board what they need to see, it’s often data without substance or root cause analysis.
For example, in our field of dispute resolution, a commonly cited financial metric is staff turnover. The softer metric is bullying and harassment scores taken from latest employee engagement surveys. But what’s behind the current or changing levels of staff turnover, and where can you find data in the business that can help give you the answer? Too few businesses collate the data they already have to hand from performance appraisals, 360 feedback surveys, engagement surveys, grievance and disciplinary data and sickness and absence. Collating the full picture is the basis for establishing the true cost of conflict – in all its form, from niggles and tensions to full-blown disputes – to an organisation.
The costs of conflict can be substantial, even when we only take into account those that can be measured, and surely need to be taken into account when planning and assessing people resources and ‘profit per employee’ or EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortisation). What is the specific cost of excessive levels of stress on employees? The Labour Force Survey for 2017, as one snapshot, suggests people suffering from stress take around 29 days of leave with the condition. According to CIPD figures, the number of days of management and HR time spent on managing both disciplinary and grievance cases has gone up in the last 20 years, from 13 to 18 days (disciplinary) and from 9 to 14.4 days (grievance). And the cost of replacing disgruntled employees? A report carried out by Oxford Economics in 2014 claimed that the average ‘whole’ cost of replacing a member of staff – taking into account lost output while a new employee gets up to speed, and logistical cost of the actual recruitment and induction – is £30,614 per employee.
HRD’s also need to look at the positive side of how the organisation is responding to and resolving problems: how many mediations have reached an agreement, how many potential employment tribunal cases have been avoided, long-term absence and stress cases resolved, how many successful performance management conversations have been had.
From this data, HRD’s have the real foundation for a healthier, more genuine positivity. There’s the financial justification for investment in addressing the sources of conflict wherever they lie; benchmark figures to demonstrate the return on investment from new approaches to managing conflict; scope the impact of your current practices on the health of your employee relations, and see how conflict may be impacting on other strategic HR drivers like employee engagement and talent retention. And, most importantly, support the creation of a new culture, a ‘clear air’ workplace which leads to more trust, honesty, innovation, support for diversity – and a better working environment for everyone.
Arran Heal, Managing Director, CMP Resolutions
