In 2023 and beyond, psychosocial risk management is expected to be a top priority on workplace agendas due to the release of Safe Work Australia’s model Code of Practice, ‘Managing psychosocial hazards at work’ (and the landmark ISO 45003 global standard, released in 2021). The release of this new code has been hailed as the most significant shift in workplace mental health in recent time and places a legal and moral responsibility on employers to manage psychosocial safety.
Why Now? The Importance of Psychosocial Safety
With mental ill-health the leading cause of time off work, and compensation claims growing at 15-times the rate of physical ones, psychosocial safety can no longer be overlooked in the workplace. The cost of untreated mental health conditions in the Australian workforce is estimated to rise from $10.9 billion in 2018 to $18.6 billion by 2025, and workers compensation claims related to mental health can be up to four times higher than claims related to physical injury due to the longer duration of recovery and potential for recurrent or chronic conditions. In addition, the COVID-19 pandemic has highlighted the importance of mental health in the workplace. Many workers have experienced disruption to their work and home lives, leading to increased levels of stress, anxiety, and depression. It is therefore essential that employers take steps to ensure their workers are supported in a safe and healthy environment.
What is Psychosocial Safety?
Psychosocial safety refers to the prevention and management of psychosocial hazards in the workplace. Psychosocial hazards are any factors in the work environment that may cause psychological or physical harm to employees, such as stress, harassment, bullying, and violence. Psychosocial risk refers to the likelihood of harm occurring as a result of exposure to these hazards.
In other words, psychosocial hazards are the sources of potential harm, and psychosocial risk is the probability that harm will occur as a result of exposure to these hazards.
The full Code of Practice lists the following workplace factors as psychosocial hazards:
| Job demands | Low job control | Poor support | Poor organisational change management |
|---|---|---|---|
| Inadequate reward and recognition | Poor organisational justice | Traumatic events or material | Remote or isolated work |
| Violence and aggression | Bullying | Harassment, including sexual harassment | Conflict or poor workplace relationships and interactions |
The introduction of the code will see employers now legally required to recognise the seriousness of psychosocial risks and hazards and take the necessary steps to prevent or minimise psychosocial hazards to ensure a safe and healthy workplace for all employees. The consequences for not acting will be consistent with those for physical injuries and fatalities, including substantial financial, legal and reputational costs, not to mention the immeasurable impact on employee health and well-being.
Did you know?
It is anticipated that fines for non-compliance with the code will commence in 2023, with early indications suggesting they will be substantially higher than previous penalties. In May 2022, the Supreme Court of Victoria ordered the Office of Public Prosecutions (OPP) to pay a former employee $435,000, after she developed PTSD and a depressive disorder as a result of viewing distressing material for her job. This ruling should serve as a clear warning to employers about their duty of care as it relates to the prevention and management of psychosocial risks, as well as the potential legal consequences of failing to address these risks appropriately.
Positive Safety – From Compliance to Culture
Promoting psychosocial safety in the workplace is not just a matter of complying with the regulations or avoiding penalties. It requires a shift in workplace culture, in which psychosocial safety is seen as an essential part of workplace health and safety. Indeed, the regulations will bring about a new frontier in how organisations define and manage safety by incorporating physical, psychological and social aspects into a holistic view of health, safety, wellbeing and inclusiveness in the workplace. At Sentis, we call this ‘positive safety’ – moving safety beyond a narrow focus on the absence of harm to a proactive approach to promoting well-being and productivity in the workplace. Positive safety incorporates the three fundamental elements of physical, psychological and social safety to create a holistic view of workplace health, safety, and well-being that fosters a culture of trust, collaboration and inclusiveness, and creates sustainable success for the organisation as a whole.
Positive safety is characterised by a workplace culture that supports employees to be the best version of themselves and to thrive, creating an environment where people can be psychologically and emotionally safe.
Executive and senior leader support, sponsorship and role-modelling is the first and essential step in building a positive psychosocial safety climate and embedding a culture of positive safety within the organisation.
Definition: Psychosocial safety climate refers to the shared perceptions of employees within an organisation about the policies, procedures and practices in place to promote and support their psychological safety and well-being in the workplace. It encompasses the physical, psychological, and social factors that influence employee well-being, such as job demands, support and control, as well as organisational factors such as communication, leadership, and culture.
Building the Business Case for Psychosocial Safety Management
The first critical step in establishing a positive psychosocial safety climate is gaining executive support, as the ISO guidelines highlight, “The success of psychosocial risk management depends on commitment from all levels and functions of the organisation, especially from top management”. To build the business case for psychosocial safety, you can:
- Provide evidence of the benefits of effective psychosocial safety management, including reduced absenteeism, improved job satisfaction and greater resilience among employees.
Share this data: Studies by PwC and the International Labour Organization have found that creating a mentally healthy workplace had an average ROI of between $2.30 – $5.80 for every dollar invested. - Openly discuss the risks associated with inadequate psychosocial safety management, such as increased absenteeism and turnover, reduced productivity and innovation, legal issues and compensation claims, and reputation and brand damage.Share this calculation: Total cost of poor psychosocial risk management = (Cost of absenteeism due to mental health issues + Cost of compensation claims related to mental health issues) x Multiplier (Safe Work Australia recommends a ‘multiplier’ of 1.5-3 times the direct costs of workers’ compensation claims to estimate the total cost of a workplace injury or illness, which includes indirect costs such as lost productivity, hiring and training replacement workers, and reduced morale.
- Demonstrate how the implementation of a psychosocial safety management system will contribute to the organisation’s overall goals and objectives.Link to your organisation’s values, strategic priorities and corporate social responsibility, ESG and diversity and inclusion goals, and the resulting impact on your customers, competitive advantage and innovation/growth. This all contributes to an organisation’s bottom line.
Once your executive team and senior leaders are on board, it is essential to engage all other leaders as the success of your psychosocial safety management system significantly hinges on their commitment and buy-in.
The Importance of Leadership in Promoting Psychosocial Safety Climate
Amy Edmondson, a renowned Harvard Business School professor known for her extensive research on organisational learning and psychological safety, emphasised the crucial role of leadership in creating a positive psychosocial safety climate by stating that “Not surprisingly, the most important influence on psychological safety is the nearest boss.” Research supports that the most important determinant of the success of psychosocial safety initiatives is the leadership of the organisation.
Did you know?
Leaders have been found to influence psychosocial safety climate by accounting for up to 50% of the variance in safety climate scores. This means that the actions and behaviours of leaders account for up to 50% of the differences in how employees perceive the level of safety in their workplace.
What factors determine a leader’s commitment to prioritise psychosocial safety management?
| MORE LIKELY TO PRIORITISE PSYCHOSOCIAL SAFETY MANAGEMENT: | LESS LIKELY TO PRIORITISE PSYCHOSOCIAL SAFETY MANAGEMENT: |
|---|---|
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Understanding and addressing the reasons leaders are less likely to prioritise psychosocial safety management can assist with overcoming the common objections to taking ownership of psychosocial risk management in the workplace, and can help organisations develop strategies to engage leaders and build a culture that prioritises psychosocial safety.
Addressing Common Objections to Taking Ownership of Psychosocial Risk Management
You may be familiar with some of the common objections from leaders to taking ownership of psychosocial risk management in their teams. Here, we suggest potential solutions for overcoming these objections in line with the regulations:
| COMMON OBJECTIONS: | SOLUTIONS: |
|---|---|
| Lack of knowledge and understanding about psychosocial risks | Provide training and education for leaders on psychosocial risk management |
| Feeling intimidated by the complexity of the task | Break down the task of psychosocial risk management into manageable steps and provide resources and support |
| Fear of addressing sensitive topics within the workforce | Develop clear policies and procedures for managing psychosocial risks and provide guidance on how to have difficult conversations with employees. Our toolkit How to Have Supportive Conversations is a great starting point. |
| Believing that psychosocial risk management is solely the responsibility of HR | Communicate the shared responsibility of psychosocial risk management across the organisation and provide resources and support to all leaders |
| Feeling overwhelmed by time constraints | Prioritise psychosocial risk management and provide resources and support to help leaders manage their time effectively |
| Perceiving psychosocial risk management as an added burden | Communicate the benefits of psychosocial risk management and its importance to overall workplace health and safety |
Top Tip:
Involve your leaders in the process! Consulting with and involving both leaders and employees is a requirement of the regulations governing psychosocial risk management in the workplace as it fosters a positive safety culture, promotes ownership and accountability, and ensures that all stakeholders’ needs and perspectives are taken into account.
Planning for a Positive Future
The release of Safe Work Australia’s model Code of Practice on psychosocial hazards marks a legislative revolution in workplace health and safety, making it a legal and moral responsibility for employers to implement a positive psychosocial safety management system. At Sentis, we believe in going beyond compliance and fostering a culture of positive safety that promotes well-being, productivity, innovation, and inclusiveness. To achieve this, it is critical to empower leaders at all levels with the necessary resources, tools, and knowledge to create a safe and healthy workplace environment.
At Sentis, we understand the importance of supporting leaders in taking ownership of their psychosocial safety obligations, and we are here to discuss how we can help your organisation build a positive psychosocial safety climate and a culture of positive safety. Contact us today to learn more.
