Managing difficult conversations isn’t just a leadership skill, it’s a business imperative. From sickness absence and lost productivity to legal risk and staff turnover, this article explores the real cost of avoiding tough conversations at work.
A couple of recent client conversations have led me to explore the business case for investment in Managing Difficult Conversations staff training.
One example I was given was of a manager who, probably out of sheer frustration, ended up losing her temper at a member of staff who wasn’t engaging in a discussion about his performance.
This resulted in him phoning in sick the next day and subsequently being absent for the next 6 months. This was a highly experienced manager, but who just didn’t have the tools to deal with what frankly, was unacceptable behaviour. And it can happen to anyone.
So how do we calculate the REAL cost of not managing difficult conversations, feedback and work performance?
Well, this can be tricky, as so much is nuanced and subjective, but here are a few examples, which hopefully will help you see how much there is to gain from taking a different approach.
Let’s start with viewing Costs vs. Benefits in terms of:
- Time
- Financial cost
- Other risks
Time Costs:
There is of course the time cost expended in releasing a manager onto a training course, plus the time needed for them to practice, discuss or implement their learning. This needs to take account of the work they’re not doing whilst on the course, which will be either picked up later by them or others.
In contrast, not having a difficult conversation, or getting the conversation wrong has time costs which include:
In contrast, not having a difficult conversation, or getting the conversation wrong has time costs which include:
- Reduced productivity from the member of staff – either through sickness, ‘presenteeism’, or poor performance.
- Time spent in performance meetings – From 1-to-1’s, right through to disciplinaries.
- Time spent seeking advice from HR or senior managers – This now includes the time spent by the third person.
- Time spent in repeated meetings – Where the same issue is discussed but not resolved.
- Time spent investigating issues – Including allegations, grievances and complaints.
- Admin time – Recording and record-keeping.
- Legal matters – Up to and including defending claims in court.
Here are a couple of ways to consider time costs:
- Time ‘lost’ – i.e. – What else could you or others be doing if you weren’t attending to this matter? Often the answer to this is that you’d be getting on with the qualitative, investment-type work that makes a positive difference to your clients, students or organisation.
- Time in terms of the hourly rate (plus oncosts) of everyone involved – e.g., a 1-hour meeting with a member of staff would cost at least:
Manager – 1 hour, plus ‘buffer time’ before and after the meeting, plus any pre, or follow up work required. I’d estimate we’re looking at a minimum of two hours for every one hour meeting.
Staff Member – 1 hour, plus ‘buffer time’, plus any follow up/remedial work required. Again, a minimum of 2 hours for every one hour meeting.
Senior Managers, admin or HR – As above.
Team members – Who may be willingly, or unwillingly involved in discussing the situation before and after the meeting with the person.
Financial Costs:
We have of course, already touched on this in our first point when we consider hourly rates and salaries, etc. But there are other potential financial costs too:
- Staff absence – either through sickness, or for example suspension
- Staff turnover – either the person themself, because they haven’t receive appropriate feedback and management support for example, or other staff who become disgruntled in a negative workplace culture.
- Legal costs – including seeking advice, representation, compensation or out of court settlements. Hopefully, your insurer would cover the cost of defending your case should this go to tribunal, but as a consequence of ever-increasing cases and costs awarded, insurance premiums continue to rise.
Other Costs & Risks:
There are also a multitude of other costs associated with not managing conversations and performance, including:
- Reduced quality or quantity of service – for your clients, or (in the education sector) pupils, resulting from yours or your team’s attention being taken from your core organisational purpose. This includes the cost of ongoing mistakes which have to be rectified.
- Reputational and legal risks – Failure to meet standards can have significant consequences, such as being down-graded by regulatory bodies (Ofsted, CQC), or being placed under investigation. Additionally, in the ever-on world of social, or even mainstream media, careers and even organisations can be brought down by the failure to address performance issues in a timely and appropriate manner.
- Lack of productivity – From everyone concerned. This includes the impact of dealing with stressful situations over a sustained period of time. We’re not robots – we can’t just ‘reset’ when we leave a difficult situation. Ongoing negative situations drain everyone of energy – frustrating and demotivating in equal measure. Then there’s the knock-on effect of lack of productivity in a disgruntled workforce if teams don’t feel poor performance is being dealt with in others – leading to…
- Increased staff turnover – Failure to deal with difficult conversations can result in us retaining the ‘problem’ member of staff, whilst our shining stars go work elsewhere. In an increasingly difficult recruitment market, the potential costs around turnover can be huge. There are also secondary costs around lack of productivity from people who are left filling the gap, or paying for supply, or temporary staff.
Whilst this all feels like doom and gloom, there is a much more simple solution, which is to invest in building a consistent approach around performance management for your organisation or setting. Small, consistent steps can have a significant and immediate impact on individual and collective performance.
When you consider the cost saving of just one member of staff not going on long-term sick, this has to be worth it.
When you consider the cost saving of just one member of staff not going on long-term sick, this has to be worth it.
So as ever, here are some coaching questions to finish on…
- Thinking about a member of your team who is not performing to standard right now – how much time and energy have you expended on them in the last month?
- Looking at the information above, what’s a rough estimate of the financial cost of this and other impacts?
- What could you spend that time and energy on instead if this was resolved?
I hope you’ve found these tips helpful. If you’d like to develop People Management or Difficult Conversations skills for yourself or your team, click on the link for your sector below, to check out our latest training offers.
Coaching and Training at BrightBird
At BrightBird, our coaching and training is practical and very human.
It’s about real conversations, real challenges and meaningful progress.
If you’re curious about our coaching and training support, even if you’re not sure what you’re quite looking for yet, then check out the support we offer your sector, or click the link to book an informal, no-obligation chat.
If you’re curious about our coaching and training support, even if you’re not sure what you’re quite looking for yet, then check out the support we offer your sector, or click the link to book an informal, no-obligation chat.
