More employers should consider using mediation at work to help resolve disputes and avoid potentially costly and stressful employment tribunal claims, according to workplace relations organisation Acas.

Mediation is an informal way of resolving disagreements or disputes in the workplace and can prevent disagreement escalating. But an Acas study carried out in 2011 found that just one in 20 employers (5%) have used mediation to solve a workplace dispute.

The study also revealed that despite low take up by employers, 64% had heard of mediation and just under three quarters of businesses (74%) agreed that mediation is a good tool for resolving disputes at work with half agreeing that mediation produces "win-win" solutions that leave both parties satisfied.

Last year the Government announced changes to how problems at work are addressed. At the time, secretary of state for business, Vince Cable, said: "We know that disputes at work cost time and money, reduce productivity and can distract employers from the day-to-day running of their business. Tribunals should be a last resort for workplace problems which is why we want disputes to be solved in other ways."

A Government funded-pilot scheme was announced last week which will help raise awareness of mediation among SMEs.

Andrew Wareing, director of the Acas service responsible for resolving disputes between individuals and their employers, said: "Workplace conflict can damage an organisation's effectiveness. Last week's announcement that the Government is funding a pilot scheme for two regional mediation networks, will help raise awareness among employers about how mediation can help benefit their business. Mediation helps resolve disputes quickly and effectively, minimising distress and cost as well as preserving workplace relationships. Acas successfully resolved 90% of the mediation cases we were involved in over the last year alone."