Mediation saves money, not just relationships

The average office worker will spend upwards of 40 hours every week side-by-side with their colleagues, sharing the best (and worst) of each other’s opinions, habits and lifestyle. The most successful work groups are those that gel as social units, creating productive and cohesive working environments. However, disagreements and disputes are inevitable even in the most well-managed organisations.

The chances are that your organisation has its own guidelines for dealing with internal disputes, and such outlines greatly improve the chances of a successful resolution. However, the prevailing view still expects – and in many ways, encourages – the toughest disputes to reach the tribunal or legal stage, even though (in all but the worst cases) litigation comes at a high financial and human cost.

When the legal profession is brought into settle disputes, things start to get expensive. Even if cost is not a concern, what about the detrimental effect on your staff and your company’s reputation? The legal option will definitely produce a result, but almost certainly that result will be deeply unsatisfactory to at least one of the parties involved. The ensuing resentment and anger doesn’t constitute a true resolution, and certainly doesn’t lead to reconciliation.

The financial cost varies from case-to-case, but the average week-long employment tribunal is likely to cost in the region of £50,000 in legal fees, and that’s before financial compensation. This money can be saved if disputes were handled with a built-in mediation stage that filtered all but the most severe disputes before they reach the law courts.

It would be facile of me to set-up some kind of “lawyers vs. mediators” scenario (such an idea would contradict my professional instincts!), but there is an unquestionable role for both professions in the process of dispute resolution.

As a former lawyer, Barack Obama has demonstrated how legal aptitude and mediation skills can be combined: when a misunderstanding occurred between a Massachusetts police officer and an eminent professor, resulting in the professor’s arrest, Obama could have ordered a costly and time-consuming official investigation. Instead, Obama brought the two individuals in to White House grounds for a polite chat over a beer. It’s an informal method of mediation, but it is mediation all the same. Obama is now looking to apply these same skills in the Middle East – and many commentators appear confident of his success.

The Gibbons Review, and the ensuing changes to the Employment Act, have put mediation centre-stage in the HR world. The Government now formally recommends that mediation services are sought to aid dispute resolution and lighten the load on the legal profession. April’s changes to the law are a step in the right direction, but we still lag behind in certain aspects. In South Africa, a workplace grievance cannot go to a tribunal unless it has gone through the mediation process first. This is in sharp contrast to the situation in the UK, despite the Gibbons Review’s recent alterations. It seems there is still a long way to go before mediation and alternative dispute resolution techniques becomes common practice for all UK companies

Our own research here at TCM has shown that nearly three-quarters of UK businesses believe they could do more to improve working relationships, and a further 60% have reported problems with their conflict resolution process. There is a clear need to address the problem of the ‘pre-legal’ stage in dispute resolution. The Chartered Institute of Personnel and Development has carried out extensive research into the costs of conflict in the workplace. Their figures suggest that at work costs UK employers an estimated 350 days of management time every year.

BT Retail’s experience with alternative dispute resolution methods perfectly illustrates the savings that can be made when compared with legal options. Complaints and grievances are costly to deal with and require comprehensive investigation. Grievance case management at BT is outsourced to a consultancy firm, and referring an individual case costs BT between £4,000 and £6,000, but those cases that reach employment tribunals can cost up to £16,000. Through an extensive programme of mediation training, BT Retail now handles all grievances in-house, allowing them to make significant savings in both financial and human terms. Some cases do still reach the tribunal stage, but a great number are resolved before litigation is engaged.

One of the issues in rolling out such a scheme is assigning responsibility for the coordination and implementation of the dispute resolution system. The HR department is the natural home for these schemes, and HR practitioners are best placed to make mediation work – work which complements rather than conflicts with the people management functions of HR. Not every HR professional can be a mediator; however, when it is needed, HR professionals should be trained in the core elements of mediation and then go on to become the ‘champions of conflict resolution’ in their organisation.

I believe the skills essential in mediation can help anyone from any walk of life. Organisations are learning that disputes are a fact of life, not an embarrassing inconvenience. Mediation training is becoming ever more popular as HR departments and company directors realise – that apart from saving them money – mediation can also save relationships.

David Liddle is speaking alongside HR representatives from TFLand the Arcadia Group at the ‘Mediation Works’ conference in London on the 9th October. Click here to find out more.