The real cost of formal grievance and disciplinaries and how the right metrics can help reduce the impact

According to this People Management article, formal procedures, including grievances, disciplinary cases and disciplinary dismissals, costs businesses £12.8bn annually and cost on average £951 in management time.

The analysis by Acas referenced that the average costs of conflict where employees did not engage with their managers, HR or union representatives were higher than where such discussions took place. Notably, where conflict resulted in formal procedures, costs were more than 3 times those associated with informal resolution.

This wasn’t surprising to us as a recent survey undertaken by AdviserPlus showed managers felt that employee productivity dropped by over a third whilst they were going through formal disciplinary and grievance processes. This survey of 100 managers also identified that nearly two thirds of them have managed a formal disciplinary or grievance process and on average 35.8% of their time was spent managing these processes.

Improving outcomes

These startling stats highlight the need for organisations to prioritise addressing issues of conflict early, for the overall wellbeing of everyone involved and the businesses bottom line, especially in the economic climate that we currently face.

To do this, organisations need clear and consistent processes for:

1. Empowering managers to deal with more people matters directly, by providing the tools and resources that enable them to self-serve issues without having to involve HR.
2. Effectively training line managers to engage their direct reports on a personal level, building stronger emotional connections so they can identify and address issues early, before they escalate to formal proceedings.
3. Accurately capturing and analysing the right people metrics to surface areas of concern and help identify the root cause of issues. Understanding the volume of issues resolved informally versus formally can enable departments to set realistic targets to improve upon.

Handling employee issues earlier in the process

In order to manage disciplinary and grievances early in the process, managers have to be confident in handling such issues. Research recently commissioned by AdviserPlus showed that confidence in manager capability to handle such matters differs greatly between the C-Suite and HR managers. According to the HR Transformation Conundrum research, the C-Suite have a far more positive view of manager capabilities to manage employee relations issues than HR Managers (80% v 40%).

Providing the right tools to enable line managers to not only handle employee matters early on but to also do so in a capable and confident manner, is an issue for both HR and the C-Suite to address.

Empowering managers

This is where our innovative technology, empower®, comes into its own as it provides HR, line managers and employees with access to the right ER tools, at the right time. Our solutions enable people managers to feel supported in taking the necessary action with confidence, while delivering efficiencies, reducing risk and capturing invaluable data insight. Ultimately, reducing the time spent and therefore the cost in managing these processes.

empower® enables you to capture invaluable case information that is presented through interactive, dynamic dashboards. You can not only answer questions like, ‘are our policies working for us?’, ‘is behaviour changing over time?’, and ‘what’s the internal benchmark?’, but you can use insight to drive the changes you need. Armed with accurate, real-time people insights, data driven decisions can be made to drive efficiency and see improvements quickly.

Data leads to insights, insights lead to action.

Enable line managers to do their jobs effectively and arming them with the tools to do so, will make process more efficient and reduce the time and cost involved with handling people issues. It will also free HR teams to focus on the complex issues that need their support and also give them more time to prioritise strategic initiatives that drive the business forward.

With the right processes in place, the benefits are significant, including:

• Improved employee experiences – When processes are handled consistently and fairly across a business, then everyone knows where they stand and by doing so it promotes a culture of continuous improvement.
• Increased productivity – Managers are spending less time investigating, solving and working on employee related issues, and more time managing the business. Employee’s are spending less time either waiting for an outcome or being a part of a process so their productivity is hampered for shorter periods of time.
• Earlier intervention – Helps line managers to handle potential issues before they become formal and therefore more time consuming and costly.
• Greater insight into problem areas – Helps identify where there may be behavioural issues that need to be addressed to reduce grievances and holds managers accountable for improving employee experiences.

Ultimately, the research all points in the same direction, formal processes are costly, time consuming and hamper productivity. With the current economic climate in the UK, business leaders need to reduce the productivity impact of grievances to reduce costs, free up manager time and improve employee engagement.

empower® simplifies processes and reduces case duration

Check out these stats on how  empower® can help reduce the impact and average case duration of people matters, including grievances. To find out more about how we support HR transformation that enables a more productive, healthier organisation, book a call today.