Mediation may not be an expendable cost

There are many businesses which are making an investment in mediation and we are continuing to win tenders to help them establish their own in-house service, and to supply their outsourced professional mediation facility. Yet over the last several months I have been hearing that several clients are scaling back their investment in mediation as part of their cost-cutting to survive the recession. Clients are postponing their dispute resolution training; disbanding their in-house service; and making more use of formal processes. While I understand the need to manage costs (indeed, our own training budget has not gone unscathed) I believe that making mediation harder to access, or inaccessible altogether, can only be short-sighted.

The impact on the economic downturn on employee relations is clear:

• people’s minds are not on their jobs – they are worried about redundancy or pay cuts, and the impact this will have on their family life
• There is a rise in interpersonal tensions as people look for others to blame
• There is an increasing distrust of the management layer
• There is increasing resentment as people are required to work harder due to non replacement of staff

With pay freezes, bonus pools reductions, ongoing redundancies and training plans shelved, it is little wonder that HR see the engagement of staff as their number one priority for 2010. While in the current climate, managers can rely on the threat of job insecurity and limited external opportunities to ensure remaining employees meet performance needs, these resources can only stretch so far. Companies relying on what academics call continuance commitment — the need to turn up because of the fear of job loss – are treading a dangerous path. Affective commitment, the kind that creates a willingness to go the extra mile and an intention to stay, is likely to have gone, and this is what we need from staff if we want competitive advantage.

Finding and replacing lost skills when growth returns is not only costly, but time consuming.  This is far from ideal in the competitive landscape many firms face.  Furthermore with rising levels of stress also reported, an approach which is reliant on similar results from fewer resources is not sustainable.

We need more help, not less, when times are tough. Organisations need to consider the knock on effect of not providing mediation. A “mediator in time” can save thousands and even though it can seem like an optional expense that can be cut, the full cost we pay for not managing conflict early may only surface at a tribunal.