Conflicts can be present in any workplace. If left unaddressed, they can affect employee morale and hinder performance. In the long run, they may impact the company's reputation and bottom line, leading to revenue loss. Business owners and managers must realize the impact of conflict in the workplace and take the steps needed to remedy the situation before it escalates.


Workplace conflicts lead to poor communication, misunderstandings and low employee morale. They can also affect a company's public image, making it unappealing to clients and investors alike.

Impact of Conflict in the Workplace

Each year, American companies lose a staggering $359 billion due to workplace conflicts. Misunderstandings, poor communication, opposing priorities and cultural preferences are all common causes of conflict at work. Whatever form they take, these situations affect an organization's productivity and performance, create tension between employees and increase stress levels. Conflicts may also result in project failure, dissatisfied customers and high absenteeism.

Image the following scenario. You arrive at work and find out that your employees failed to complete a project on time because they didn't agree on how to handle it. The client keeps calling to ask for updates, your staff members keep arguing and everything looks like a mess, not to mention that missed deadlines cost money and affect your reputation.

As a manager, it's your job to prevent such things in the first place. If they do happen, make sure you have a backup plan. Don't underestimate the impact of conflict in the workplace. Even the smallest disagreement can lead to costly mistakes, mistrust among employees and poor decision making.

Diminished Work Performance

The effects of conflict on individual performance at work go beyond missed deadlines. Conflicts increase tension and stress in the workplace, which could potentially lead to errors, poor planning and disagreements. Over time, they may create a toxic workplace environment that hinders employee performance and motivation. As a result, your business will suffer.

Another problem is that conflicts are often accompanied by a lot of time spent arguing, gossiping and taking sides. Your team members would otherwise have spent this time working on new projects or brainstorming ideas. Instead, they're fighting with each other and neglecting their duties.

Low Employee Morale

Workplace conflicts can affect team morale, job satisfaction and motivation. Your employees may take time off to avoid the conflict and those who are responsible for it. They may feel stressed and emotionally drained, which can result in higher turnover rates and absenteeism.

Employees who get caught in conflicts are more likely to experience anxiety, depression, poor sleep and physical symptoms like back pain or migraines. These issues result from workplace stress. A hostile work environment may contribute to high blood pressure, cardiac events and accidents. Conflicts are not the only cause of stress at work, but their impact on employees' health and morale can be devastating.

Loss of Revenue

Failing to address workplace conflicts can hurt a company's revenue and increase its expenses. A toxic work environment affects employee satisfaction, which in turn may increase staff turnover rates. This means that you'll have to spend extra on recruitment and training.

Additionally, conflicts between employees can negatively impact the customer experience, leading to diminished profits. Your staff members won't be able to do their job properly, which will ultimately affect the company's relationships with its clients. In certain circumstances, conflicts can harm the public image of an organization, making it unappealing to potential investors and customers alike.

Poor Communication and Misunderstandings

Poor communication is one of the most common effects of conflict on teams in the workplace. If your staff members are constantly arguing, they won't be able to collaborate and communicate properly. This can result in misunderstandings, low employee engagement, distrust and missed performance goals.

In a 2018 survey from The Economist Intelligence Unit, 44 percent of participants said that ineffective communication affects employees' ability to complete projects. More than one-third cited poor communication as a major contributor to low morale. Another 18 percent of them linked it to lost sales. Failure to communicate effectively can further increase turnover rates and affect customer relationships.

If your staff members are involved in an ongoing conflict, try to determine its root cause and find a solution. While it's impossible to completely avoid conflicts, you can offset their impact by creating a workplace that fosters open communication. Encourage your employees to express their views and engage in a healthy debate rather than arguing and taking sides.