Assessing psychosocial risks
In today’s fast-paced and constantly evolving business environment, managing psychosocial risks isn’t just a legal or ethical requirement – it’s a strategic advantage. For small to medium business owners, HR leaders, People and Culture professionals, and WHS managers, understanding and addressing these risks is essential to creating safe, high-performing, and psychologically healthy workplaces.
Psychosocial risks don’t just affect people – they impact productivity, morale, retention, and ultimately, your bottom line. The good news? With the right systems and mindset in place, these risks are both manageable and preventable.
What Are Psychosocial Risks?
According to Safe Work Australia, psychosocial hazards are aspects of work design, organisation, social interactions, and the physical work environment that have the potential to cause psychological or physical harm.
These may include:
Excessive workload and work pressure
Poorly managed organisational change
Lack of role clarity
Workplace bullying, harassment, or conflict
Lack of support from supervisors or colleagues
Low job control or autonomy
👉 Access the full list of psychosocial hazards from Safe Work Australia
Why It Matters: The Impact of Unmanaged Psychosocial Risks
Work-related psychological injuries have a significant impact on both individuals and organisations.
🔹 In 2020, mental stress claims made up 6% of serious workers’ compensation claims in Australia.
🔹 The average time off work for a psychological injury is 27 weeks, compared to 6.2 weeks for physical injuries.
🔹 The total cost of work-related stress to Australian businesses is estimated at $14.81 billion per year (Safe Work Australia).
Unmanaged psychosocial hazards lead to:
Increased absenteeism and presenteeism
Higher turnover rates
Greater risk of workplace conflict
Poor performance and morale
Damage to employer brand and legal liability
A Word on Legal Obligations
Under Australia’s model WHS laws, a person conducting a business or undertaking (PCBU) must eliminate or minimise psychosocial risks as far as reasonably practicable. Not meeting this duty of care could result in legal consequences, reputation damage, or costly insurance claims.
✅ Your Guide to Assessing Psychosocial Risks
Here’s a practical step-by-step guide for small to medium businesses looking to assess psychosocial risks:
📋 1. Conduct Employee Surveys
Use anonymous surveys to gauge how employees are experiencing identified hazards. Include targeted questions around workload, culture, relationships, and psychological safety.
🗣️ 2. Hold Focus Groups and Interviews
Create small, safe spaces where staff can share their concerns openly. One-on-one interviews can also uncover insights that surveys miss.
📊 3. Analyse Organisational Data
Look closely at trends in:
🏥 Absenteeism
🔁 Turnover
⚙️ Productivity
📑 Workers’ compensation claims
These often point directly to underlying psychosocial issues.
🧾 4. Complete Risk Assessments
Use structured checklists and WHS tools to assess specific hazards like job demands, clarity, support systems, and role conflict.
🤝 5. Engage Internal and External Experts
Collaborate with your WHS leaders, HR team, and external consultants to ensure a thorough and objective approach to assessment.
📄 6. Review and Update Policies
Make sure your psychosocial safety policies are current, practical, and well communicated. They should be reviewed at least annually.
📬 7. Establish a Reporting Mechanism
Provide employees with a confidential and accessible way to report hazards or incidents. Make it clear that reports will be acted on promptly and respectfully.
🎓 8. Deliver Targeted Training
Offer education and upskilling to leaders and teams on topics like stress management, respectful behaviours, and collective care.
Offer education and upskilling to leaders and teams on topics like stress management, respectful behaviours, and collective care.
Success Stories: What Happens When You Get It Right
Organisations that proactively manage psychosocial risks report powerful benefits, including improved employee wellbeing, engagement, and business outcomes.
💡 Business A – Tech Sector (Mid-sized):
After launching a mental health program with manager training, EAP access, and an anonymous reporting system, they reduced stress-related absenteeism by 40% and increased engagement by 30% in two years.
💡 Business B – Manufacturing (Small):
Through flexible hours, a culture of collective care, and regular mental fitness sessions, this team saw a noticeable drop in burnout and an uptick in performance.
💡 Business C – Retail (Medium-sized):
This company ran regular emotional intelligence workshops and offered access to confidential support via an EAP. They reduced turnover by 52% and saw measurable gains in team cohesion and innovation.
Final Thoughts: It’s Time to Prioritise Mental Safety
Creating a workplace where people thrive mentally, emotionally, and socially is no longer a “nice to have” – it’s essential for sustainable business success.
The earlier you assess and address psychosocial risks, the more likely your business will benefit from:
Reduced injury and claims
Improved employee engagement
Higher performance and resilience
A positive and enduring workplace culture
Need Support to Build a Psychosocially Safer Workplace?
Whether you’re starting from scratch or refining existing systems, we can help. Our team has the qualifications and tools to support you in:
Identifying and assessing psychosocial risks
Implementing practical controls
Training leaders and employees
Building an integrated, values-aligned wellbeing strategy
📞 Get in Touch to chat about how you can confidently meet your WHS obligations and unlock the full potential of your people.
👉 Contact us today and take the first step toward a safer, healthier, and high-performing workforce together.
📚 Related Articles
Explore more expert insights to strengthen your organisation’s approach to psychosocial safety:
🔍How to Spot Workplace Psychosocial Hazards Before They Harm Your Team – Learn to identify early warning signs of psychosocial risks and take proactive steps to prevent harm.
🛠️Controlling Psychosocial Risks: A guide for any organisation – Discover practical strategies to control and mitigate psychosocial risks, no matter your industry or size.
