Employers are failing to embrace mediation to help resolve conflict in the workplace despite the role it can play in helping employers avoid the significant costs associated with such disputes, according to a new report from the Chartered Institute of Personnel and Development. The repeal of the Statutory Dispute Resolution regulations next year makes it all the more important that employers invest in mediation.

The report, Workplace mediation: how employers do it, based on a survey of nearly 800 employers and to be presented at the CIPD Annual Employment Law Conference on 2-3 July, finds that almost six in ten organisations have never used mediation to help manage conflict at work.

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Among employers that use mediation, more than 80% report that it helps improve relationships between employees, 71% of respondents believe mediation reduces stress associated with the use of formal disciplinary or grievance procedures and half say that mediation helps avoid the costs of defending employment tribunal claims.

The survey finds that respondents identify informal discussions and mediation as the most effective approaches to resolving conflict at work. Mediation is rated as particularly effective in preventing the breakdown of working relationships, tackling bullying and harassment, as well as in addressing discrimination in the workplace.

Mike Emmott, CIPD Employee Relations Adviser, said: "All employers should consider using mediation as a flexible alternative to the formal disciplinary or grievance procedure.

"Mediation can help two disputing parties identify what is at the root of their disagreement, what they need to happen to resolve matters or move forward and any changes or compromises they are prepared to make in their behaviour or attitudes.

"More employers should invest in conflict management training to give line managers the informal mediation skills to allow them to step in and attempt to resolve disputes before they escalate.

"Poor conflict management does not just lead to management time being wasted and significant financial cost but also creates stress, leads to employee absence, dysfunctional teams and damages morale and productivity. In many cases employees will simply vote with their feet and leave organisations if conflict is not managed effectively."