The cost of unresolved conflict and how mediation can help

2nd Mar 2026

This article was written by Elaine Clarke, Director of Employment Relations Services, Labour Relations Agency

Conflict among colleagues is not an uncommon feature in the workplace. In larger organisations, it may be absorbed or managed quickly by an experienced HR team. In small and micro businesses, which may not have a dedicated HR function, it is likely to have a more immediate and disruptive impact.

The financial implications are also significant. Workplace conflict is estimated to cost the Northern Ireland economy a staggering £1billion every year. For employers, management time associated with each issue typically equates to around £1,000. From the perspective of a small business, that cost represents time diverted from core activity and from customers who rely on timely service. The most effective way to reduce these pressures, in our experience, is to intervene at the appropriate juncture.

This is where our mediation service can help, offering a practical and confidential route for resolving interpersonal problems before they escalate into formal disputes.

Mediation allows the people involved to talk through what has gone wrong, understand each other’s perspective and agree on a clear way forward. The service is free, impartial and future-focused. For smaller employers in particular, it provides structure and support at a point where informal conversations have not been sufficient and formal action would be premature.

Something we often hear from employers is that they see the early indicators but feel unsure about what to do next. They may sense that two colleagues are struggling to work together, or that communication has started to break down. Without a HR specialist to consult, there can be understandable hesitation about stepping in.

The risk is that a manageable issue festers, morale drops, and the conflict becomes embedded. Our advice is to act before that happens.

A straightforward conversation with the individuals involved is usually the right starting point. If concerns remain, mediation may be the next proportionate step.

At the Labour Relations Agency, we continue to provide confidential and impartial mediation services for organisations of all sizes – at no cost. When we receive a referral, our mediators speak to each participant individually to explain the process and ensure they are willing to engage.

Only when everyone understands the purpose do we bring the parties together. The goal is always to find a workable agreement that allows the individuals to rebuild their professional relationship.

It is worth acknowledging that mediation may not be suitable for every situation. Where an investigation is required or where serious misconduct is alleged, employers should follow their formal procedures. However, for issues linked to communication difficulties, personality differences or misunderstandings, mediation remains a strong option.

Something we’ve observed is that organisations that use mediation early quite often find that it helps to stabilise teams, maintain morale, and avoid formal action. It can also help managers feel more confident in handling sensitive issues, knowing that they have a clear and well-supported process available to them.

We shouldn’t forget that preventative steps can make a meaningful difference, too. Clear communication, accessible policies and routine check-ins all help reduce the likelihood of conflict. These measures benefit every organisation, regardless of size. For micro and small employers in particular, they create a foundation that makes early intervention easier and more natural.

Northern Ireland’s businesses rely on strong and productive working relationships. Protecting these relationships is vital both for our economic stability and growth, with mediation offering a practical and effective way to address problems at an early stage before they become costly or more difficult to manage.

If you are working in a small or micro business, our dedicated team at the Labour Relations Agency remains available to discuss whether mediation is suitable for your situation and to guide you through the process.

Early advice can lead to earlier resolution. Employers who act promptly place themselves in a stronger position to maintain productive and positive workplaces.

If you need support on any workplace matter, we are here to help.