Contractor Conflict: What’s the resolution?
It’s important to create good relationships with everyone we work with, including employees, colleagues and, of course, contractors. However, as good as these relationships can be, issues will still likely come up.
Unfortunately, a disagreement can quickly escalate into a dispute, and before we know it, we’re losing time, money and potentially even the relationship.
Conflict is disruptive to your business and a huge stressor emotionally, so having a resolution process in place allows you to be confident that disputes will be resolved quickly and efficiently. Let’s explore:
Why does conflict arise with contractors?
So, if we’ve worked hard to build relationships with our contractors, why do disputes happen? Unfortunately, misunderstandings are a part of life, and when it comes to business and money, it’s not so easy to “agree to disagree”.
Disputes can be caused by:
A real or perceived violation of a contract and its obligation
A lack of understanding of the conditions of a contract
A delay on a contract
A failure to deliver on a contract
A claim that is unsubstantiated or incomplete
Other interpersonal issues
What happens when conflict isn’t managed?
If you don’t manage disputes correctly, it can:
Cost a lot of time
Cost a lot of money
Damage your business’ reputation
Damage your relationship with the contractor
Poorly managed conflict can also lead to a breach of contract. When this happens, the contract may be terminated, or a claim could be made against a contractor’s surety bonds. When disputes can’t be settled, they may even go to court — an expense that every business should try to avoid!
So, how do we come to a resolution? Read on to find out.
The Conflict Resolution Process
A conflict resolution process intends to get to a solution that everyone is happy with as quickly as possible. Having this process in place doesn’t mean creating another complicated document with rigid rules, jargon and communication flows. It does, however, need to be a well-defined, step-by-step process for how differences in opinion will be communicated, managed and addressed.
Conflict Resolution Methods
A conflict resolution process within a contract clearly sets out the steps each party should follow in the event of a dispute. The steps follow a logical progression, aiming to help the problem get resolved with as little disruption as possible. They also cover all eventualities and explain the process if the dispute ends in court.
The main conflict resolution methods include:
1. Negotiation
Communication is key, so talking out the problem calmly and professionally should always be your first point of call.
Set aside any personal feelings you may have about the situation and try approaching it with curiosity instead, and put yourself in the other person/business’ shoes. If you can understand their perspective, it’ll help alleviate tension and help you get to an answer faster. Remember to actively listen and be prepared to compromise so an outcome can be reached that makes everyone happy (and so expensive and time-consuming legal proceedings can be avoided!).
2. Mediation
When negotiation between the two parties isn’t sufficient, a third party can be used to give a neutral opinion on tackling the problem. While mediation isn’t a legally binding process, it can be an effective way to resolve the situation.
3. Adjudication
When mediation isn’t effective, and the parties can’t find a resolution among themselves, an adjudicator can be used to give a final decision. This takes the decision away from the parties involved, which can help to stop things from getting personal. It’s important to note that the adjudicator’s decision may still need to be taken to court to be enforced.
4. Arbitration
Arbitration also uses an independent third party but in a more structured process. The arbitrator will consider all documents and facts and can decide in favour of one party or the other. Arbitrations can be legally binding, and the costs are significantly higher than other methods.
5. Litigation
When the conflict can’t be resolved by any other method, it can end up going to court. Litigation involves a trial and is legally binding and enforceable. It is the most costly and time-consuming way to resolve a dispute and the least ideal outcome for all parties involved. Avoid it if you can!
Reducing the Possibility of Conflict
When you’re working with other people, conflict is bound to pop up now and again — it’s just what happens with any interpersonal relationship! But, just like when we talk about mitigating risk, starting with prevention before any issues can crop up in the first place is the best course of action.
To avoid conflict with your contractors, preventive measures include:
Careful and detailed planning;
Identifying risks in advance; and
Creating processes and systems to ensure a safe working environment for everyone.
Hopefully, you won’t need to use it, but by including a conflict resolution process in your contractor safety management system (like Conserve), you will save time, money and stress while keeping your business running smoothly and your contractors happy!
Want to learn more about conflict resolution and contractor management? Get in touch with Conserve today, and subscribe to our newsletter for regular updates and insights!
