Mediation in SME’s. What’s the problem? What’s the solution?



“This initiative will give small businesses in Manchester and Cambridge the opportunity to experience mediation and discover the benefits it can bring for the first time”

Employment Relations Minister, Norman Lamb speaking in June 2012 following the announcement of Consensio as the contract winner of the SMEs mediation training pilot.  This initiative forms part of the Government’s response to the ‘Resolving Workplace Disputes’ consultation.   Will this pilot achieve its purpose and ‘crack the nut’ on how SMEs can access cost effective mediation support?SME mediation

To date there has been minimal adoption of mediation by SMEs to resolve workplace conflict.   An ACAS report on Workplace Conflict Management published in August 2011 (updating figures from a 2008 survey) reported that only 4% of SME’s (less than 250 employees) had used mediation.  This contrasts markedly with larger organisations (500+ employees) where 43% had used mediation.  More significantly this study highlighted that 65% of SMEs had heard of mediation.  In other words, despite being aware of it less than 1 in 10 SMEs went on to use mediation.  In contrast nearly half of larger organisations that were aware of mediation had used it.

Why do such a low number of SMEs take up mediation?  Figures on attitudes to mediation from the same survey give some pointers.  Whilst three quarters of SMEs believe mediation to be a good tool for resolving workplace disputes, half see it to be used only as a last resort.  Cost is another issue, though interestingly only a few more SMEs agreed that it was expensive than those who disagreed.   When asked for reasons for not using mediation an overwhelming 93% believed they had not had problems that would suit mediation.  For the small number of SMEs that had used mediation the evidence showed they had benefitted from it as they gave higher scores when asked whether it was a good tool for resolving disputes compared to those SMEs who had not used mediation.  They also gave significantly lower scores when asked whether mediation was a last resort, expensive and only suited to large organisations.

What conclusions can we draw from this?  The barriers seem to fall into 2 areas:

  • Awareness and Understanding
  • Recognising the Business Case

With regard to awareness and understanding there is clearly a need to convey a strong message to SMEs to clarify what workplace mediation is and the benefits it brings.  The figures suggest that even for those SMEs aware of mediation there is a limited view of how it can be applied and a failure to recognise that it can be helpful in a wide range of scenarios.  Early intervention is key and the fact that many see mediation as a last resort means SMEs are missing opportunities to save their organisation from the costs in both people and financial terms caused by spiralling conflict.  Those who have used mediation clearly have a more positive attitude indicating that the key is to get over the initial barriers around lack of knowledge and misunderstanding.

In terms of the Business Case the focus needs to be on value to the business.  A significant proportion of SMEs will see the cost of mediation as a barrier.  Any business, small or large, will justify expenditure if it sees a return on that money so helping a company calculate the cost of conflict is a major influence in justifying the business case.  Looking at recruitment costs alone, to replace someone below senior manager / director level costs on average £3,000 according to the CIPD/Hays latest Resourcing and Talent Planning report (published 6/12).  Mediation would cost around a third of that and avoid the additional costs of training etc.

Will the Government’s SME mediation pilot solve these problems?  It will certainly help with the barriers identified above.  The publicity around the pilot will generate awareness and, for those companies involved, their understanding will be greatly enhanced.  In addition, although details have not been publicised, the model being proposed would appear to be a cost effective one.  (The suggestion is that the employees from the SMEs trained in mediation skills by Consensio act as a pool to provide mediation services to the other companies in the scheme.) 

To assure success however there will be practical issues to overcome such as:

  • How prepared will companies be to release their people to help other companies? 
  • Will there be enough cases to give the mediators experience and maintain interest? 
  • Who will take on co-ordination / promotion of the scheme? 
  • Will companies be prepared to ‘wash their dirty linen’ in front of other companies?

We can’t just rely on Government to come up with solutions.  There is a need for mediation skills to help SMEs and there are skilled mediators who can provide the expertise.  The challenge for mediators is to align interests, generate awareness and understanding of the benefits of mediation and devise models that will work for everyone.   That will doubtless demand some level of creativity and innovation – but mediators by necessity are resourceful problem solvers, and so are well suited to address the issue.  For starters here are a few ‘top of my head’ thoughts…

SME mediation Mediation4

My offer is that I’ll happily speak to any businesses about mediation, how it can benefit them and what is the model that really meets the needs of all those involved.  So if you want to discuss further – drop me a line.