The Real Cost of Psychosocial Safety At Work


The Real Cost of Psychosocial Safety At Work

Psychosocial Safety Climate or PSC is “the shared belief held by workers that their psychological safety and well-being is protected and supported by senior management*

A recent report published by Safework Australia, highlights the importance of wellbeing launchPsychosocial Safety at Work and the impact it can have on your company’s bottom line.  The report explores Australia’s current decline in productivity, and statistics show that, following a boom in productivity growth in the early 90’s, progress has stalled in the last 10 years.

The Productivity Commission has red flagged poor productivity and made it a priority. Improving productivity creates the model situation where one has increased outputs (i.e. goods and services) without the need for additional inputs (e.g., labour, capital).  Loss of productivity occurs when workers are absent or when they are at work but not performing at their usual capacity (presenteeism). A key point is that, poor employee psychological health leads to reduced productivity.

The cost of untreated psychological health problems in Australian organisations is approximately $10.9 billion per year, due to absenteeism, presenteeism and workers’ compensation. Psychologically healthy workplaces on the other hand have been shown to achieve a Return on Investment (ROI) of $2.30 for every $1 spent on improving individual skills and resilience.  I.e. For every dollar spend on successfully implementing an appropriate action, there is, on average, $2.30 to be gained. (Price Waterhouse Coopers**).

The study published by WorkSafe Australia found that:

  1. Low or poor PSC in the workplace is related to higher absenteeism and presenteeism. Workers take 43 percent more sick leave per month and have a 72 percent higher performance loss at work. They cost an average of $1887 more per year than those in environments where there is a positive PSC.
  2. Depression is related to higher absence due to illness and poor performance. Those with severe depression take 20 times more sick days and had 270 percent higher performance loss, than those without depression. The total cost of depression to Australian employers is estimated to be approximately $6.3 billion per annum.
  3. Psychological distress is related to higher absenteeism and presenteeism, resulting in four times more employee sick leave; 154 percent higher performance loss at work and cost an average of $6309 per year (for mild to severe psychological distress) more than those without psychological distress.
  4. In contrast, higher engagement with employees is related to lower sickness absence and presenteeism. Employees in companies with poor PSC, were taking 12 per cent more sick days than those with a positive PSC. Also, the average performance loss for those with low engagement was 8.1 per cent, costing an average of $4594 per year. Conversely, those with high engagement had no measurable performance loss. The total cost of low employee engagement to Australian employers is estimated to be approximately $5.4 billion per annum.

The results of this study demonstrate that there is bottom line motivation to address psychosocial hazards in the Workplace and take action to improve employee Mental Wellbeing. This can be done by:

  • Consultation with all key stakeholders to understand the specific psychosocial issues in the workplace and how best to mitigate them. Employers should monitor the company’s PSC and psychosocial risk levels. Employee involvement at all levels should be encouraged to monitor, establish controls, raise awareness and participate in education and training, Job structuring should be revised to minimise work conditions that influence poor psychological health, such as excessive demands and work pressure and insufficient support, control and power.
  • Suggested controls include leadership commitment to a mentally healthy workplace, policies and procedures for the prevention of unreasonable behaviours such as bullying, aggression or violence, managing work-related fatigue and a process for consultation with workers.
  • At an organisational level, possible controls may include designing safe systems of work, workforce planning to ensure the balance between work demands and time pressures, role clarity, independence, recognition and reward and flexible work arrangements. Organisational KPI’s could include PSC.

Employers are legally required to manage mental Wellbeing in the workplace and Workers are also required to take reasonable care for their own health and safety.  Employers are required to meet certain standards for the physical safety of their workplace. A very recent survey of 1126 Australian workers revealed that over nine out of ten Australian workers consider it important, to safeguard psychological health in the workplace, yet approximately half the workers surveyed believed that their workplace is not mentally healthy (beyondblue, 2015).

WHS laws impose a primary duty of care on a Person Conducting a Business or Undertaking (PCBU), to ensure the health and safety of their workers at work. The model WHS laws explicitly define health to include physical and psychological health. A PCBU must manage the risks of physical or psychological harm by eliminating the risks, so far as is reasonably practicable. This can be achieved with the assistance of effective control measures and systems such as the myosh Wellbeing Platform.

But, how do we identify and manage these issues at work?  What can managers do and what should employees be doing? How do we identify issues, reduce stigma and improve outcomes?

The myosh Wellbeing Platform enables Management to Identify, Engage and Manage the Mental Wellbeing of Employees.

Our cloud based solution provides managers and employees with resources and strategies to:

  • Reduce Risk
  • Improve Productivity
  • Promote a positive working environment
  • Raise awareness and reduce stigma

Management can:

  • Identify issues
  • Implement controls,
  • Create wellness programs
  • Measure and review initiatives

Employees can:

  • Identify and report issues, and request help confidentially

The myosh Wellbeing Module is due for release early in 2017.  Click here to pre-register your interest.


Safework Australia

Price Water House Coopers Report

*Bond, Tuckey, & Dollard, 2010

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