“We know it costs money… but where exactly?”

The international study by CPP Global from 2008 did exactly that: it made visible where conflict in organizations actually causes money to leak away. Not through one major explosion, but through thousands of small cracks.

The researchers asked employees and managers how much time they spend on conflict every week. Not on resolving it, but on everything surrounding it. The worrying. The avoidance. The conversations afterwards. The repair work. On average: almost three hours per week.

Three hours in which no value is created. But that is still the least costly part.

What really makes conflict expensive happens one layer deeper

In organizations where conflicts remain unresolved, behavior changes. People communicate more cautiously. They share less information. They take fewer initiatives. Not because they want to, but because it feels safer. Energy shifts from creating value to protecting oneself.

And then things start happening that nobody explicitly decides:

Projects move just a little slower

Decisions become watered down

Innovation is postponed

Talent mentally disengages

And eventually: leaves

The hidden costs of conflict

CPP Global shows that conflict is an important driver of unwanted employee turnover. And anyone who has calculated the costs of someone leaving — recruitment, onboarding, loss of knowledge and relationships — knows how quickly this adds up. Especially with experienced employees.

The painful reality is that these costs are rarely recorded explicitly as “conflict”. They are hidden in:

lower margins

missed opportunities

rework

and indecision

It is the most expensive form of cost: costs that have become normalized.

Conflict is not an incident

What I see in practice is that many organizations only take conflict seriously once it escalates. When HR becomes involved. When legal teams start looking at the situation. But by that point, the real costs have already been incurred. Months, sometimes years earlier.

The CPP Global research reveals something fundamental: conflict is not an incident. It is a process. And if that process is not guided, it will naturally start costing money. Not because people are unprofessional. But because unresolved tension always has to go somewhere.

The paradox of conflict competence

Organizations that take a different approach do not see conflict as failure, but as a predictable part of collaboration that requires skills and intervention. Early. Light. Professional.

And that is where the paradox lies: the earlier you invest in conflict competence, the lower the costs.

Not spectacularly. But structurally.

Felix Merks
Director Result ADR

Would you like to read the research yourself?

Source: CPP Global (2008), Workplace Conflict and How Businesses Can Harness It.