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Dear all, What is the hidden cost of poor Industrial relations? I am suggesting some costs, please add based on your experience and exposure.

1 - Lost Management time and Productivity.
2 - Low employee engagement
3 - Unhealthy work culture / Stressful work environment
4 - High litigation cost
5 - Labour Turnover cost
6- The cost of Indiscipline
7 - Delay in developmental process/ low level of acceptance
8 - loss of confidentiality
9 - Unwanted third party involvements
10 - Employer Branding cost

Thanks and regards,

From India, Delhi
Founder & Director, V K Dynamic Leadership
Recruitment/talent Acquisition, Career Counselling
Management Consultancy
Nagarkar Vinayak L
Hr And Employee Relations Consultant

Nagarkar Vinayak L

Dear colleague,

The cost of poor IR is both ,short term and long term. You have made good attempt to list several of qualitative and quantifiable areas. Sometimes cost is irreparable and puts the organisation several years on backfoot compared to the competitors.

I can think of loss of opportunity cost and loss of customers as major cost , should it happen.

Organisations with poor IR, won't survive and unless damage control and preventive actions are systematically taken at right time, it will see doomsday sooner or later.


Vinayak Nagarkar
HR and Employee Relations Consultant

From India, Mumbai

Hello Sharmavk05,
In addition to loss of opportunity cost and loss of customers that Vinayak Nagarkar mentioned, you can also add this: higher hiring costs.......indirectly linked with your number (10).

Bad news has the habit of spreading faster than good news--so poor IR practices would be known sooner than later & the Company would end-up spending more to hire the same number & quality & level of new employees than by another Company with good IR practices.


From India, Hyderabad

Dear Friend,
The industrial relations in an industry solely integration cohesive relation of employees and employers management of decision making and capital investment.
The hidden cost of poor Industrial relations arises for the mismanagement of the above may cause revenue loss and unrest in an industry.

1 - Loss of time and Productivity.
2 - Loss of productive employee
3 - loss of work culture
4 - High operation cost
5 - Increase in Labour Turnover cost
6- Entangle with law & order situation
7 - Delay in delivery process
8 - Loss of clientele confidence
9 - Unwanted third party involvements
10 - Loss of market & goodwill
If not proper check is made in time it may cause shutdown of business with gross revenue loss to owner & stakeholders.

From India, Mumbai

The hidden cost of poor Industrial relations may be summarised as below:

The workmen at the behest of unions devleop a sense of militancy and the start ruling the roost over a period of time .

The discipline would be at cross road, productivity being lowered, and the management gets stuck as to how to straighten the situation .Any inevitable bulldozing to correct the situation by managemnet,would backfire ,creating total chaos and impasse .

In sum ,the management would pay a heavy price to set right the situation in terms of production/productivity, strained empoer employee relations, oevrall animosity, dragging labour litigation etc


From India, Chennai

Poor IR could ruin the organisation, there are very many instances where the organisations perished over long drawn-out strikes and lockout. The classical case is the textile industry in the Bombay region (as it was then) due to the impact of a fearful Trade Unionist, Mr. Datta Samant.
From India, Mumbai
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