Mediation is a tool that is used to help manage and resolve conflict and to arrive at (hopefully) a win-win situation.
When people hear the word “mediation,” many first think of its use in a family law context: Divorced or divorcing parents working with a third party to amicably arrange a mutually beneficial schedule for their children or agree on an equitable distribution of the couple’s assets and liabilities. And, when many people hear the word “mediation” in that context, most laugh at the process hoop they must jump through before being heard by a judge; the mediation process often proves ineffective.
Mediation can also be used, although less commonly, in another context: for business. Realistically, it can be used in any dispute in which two people have a vested interest in resolving a conflict and moving forward to work together amicably in a win-win situation. After all, other than the preservation of court resources, isn’t that what they had in mind in the family-law setting when originally requiring this step?
In the business context, however, there is often less raw emotional attachment within the conflict (albeit, it is not completely void of feeling); it’s generally not as personal as the thought of losing rights to and time with your child. Two industries that significantly benefit from this mediation boom are hospitals and senior communities. And there are a few significant reasons that these industries are starting to take notice:
1. Human resource costs are immense – especially in filling leadership positions within a hospital or senior community.
The cost to replace a general employee can easily reach 150 percent of the employee’s annual compensation figure. The cost is significantly higher (200 to 300 percent of annual compensation) for managerial and sales positions. Therefore, the cost of turnover for a $50,000 position in an organization is approximately $75,000. Some of the costs incurred for turnover include the ad placement to refill the position; time spent résumé sifting and interviewing; training; relocation; new supplies (business cards, letterhead setup; name tag); impact on departmental productivity; loss of knowledge, skills and contacts of the person leaving; unemployment insurance; etc. The cost is high.
Nurturing good employees is a good investment for the organization. With an investment of a couple thousand dollars, it may be possible to retain the employee and, thus, a positive ROI for the organization on the process. If a $2,000 investment resolves a dispute that retains a $50,000 employee for an additional year, the organization justifies an 1,150 percent ROI for the organization by utilizing a mediation process.
If the organization did 12 mediations throughout the year ($24,000) and only managed to save two of those employees (17 percent), the ROI of utilizing mediation services would still obtain a 108 percent ROI from utilizing mediation services.
It just makes sense.
￼￼2. Board members – good ones – are few and far between.
It takes time for an organization to diversify its board with solid board members who are vested in the organization and its cause. When a dispute arises with a board member, mediation could be a viable option for the organization to work through the turbulence and save the board member. The issue may arise between board members or between a board member and a member of the leadership team. Either way, this strain may not allow the board member to serve to her maximum ability.
A short mediation session may ease woes and allow the organization to maintain maximum efficiency and production. It could further save resources by not requiring the organization to solicit to fill the potential board vacancy with a member that brings the skills, qualifications, and connections that the departing board member possesses.
3. Communication is vital.
One reason mediation is attractive to hospitals and senior communities is the fact that they are realizing that communication is vital – and we all have varying communication styles and techniques. In order for an organization to have maximum effectiveness, we must learn each other’s communication styles and adapt accordingly. This is not an inherent skill in all of us. Having an outside party work with the parties to not only overcome an instance of dispute, but also to help them learn how to communicate with one another moving forward, is a great use of resources for an organization.
4. Government agencies are becoming more open to mediation to resolve non-compliance issues.
Regulatory compliance is important, consistently in flux, and cost of non-compliance is high. Agencies are becoming more open to mediation to resolve non-compliance issues – saving resources for organizations and helping promote future compliance by the organization.
5. Solid, trusted vendors are important to the overall organizational function.
Mediation can be effective in resolving issues between an organization and its vendor. Both parties should have an interest in continuing their business relationship for mediation to be effective.
6. Resident or patient conflicts can many times be resolved easily with a third-party; the resident or patient may even be retained as a lifelong organizational supporter — thus, keeping business.
A conflict may arise within a hospital or senior community in which a simple dispute or issue can tamper the reputation of the organization in how it is handled. A recent study found that the majority of victims in malpractice lawsuit claims are actually only seeking an apology for mistreatment. Think of all the money that could be saved by bringing together these two parties for an apology and explanation!
A resident in a senior community may have a conflict with a staff member. Without effectively resolving the issue, the senior community may lose a valued resident. With mediation, the resident may learn why the staff member acted the way he did, and the staff member may learn something about client relations and how to deal with this resident moving forward. It is a win-win situation.
While it is possible to teach a dedicated individual within an organization about effective dispute resolution (and we advocate for that training when the situation allows), it is also important for an organization to recognize when a third party may be more advantageous to the situation. It is important for the disputees to feel impartiality from the mediator; there is no interest by the mediator in either party and, thus, is fairly working with the parties to come to an agreement.
There are more minor disputes, however, or situations when an internal organizational mediator may be appropriate. For example, a dispute between two residents of a senior community may be more appropriate for an internal staff member to handle the dispute resolution. Learning how to effectively get the parties to negotiate to an mutually beneficial agreement is important in the reputation, success and sustainability of any mediation program within a hospital or senior community. Through mediation, resources can be saved, important staff retained, efficiency improved and the overall culture of an organization can be morphed to one of inherent success.