Where organisations go wrong in managing psychosocial hazards

Organisations need to address the root cause of psychosocial hazards in the workplace rather than applying band-aid interventions focused on the individual

Recent updates to OHS regulations have escalated the importance of psychosocial hazards within existing Work, Health and Safety (WHS) duties. With the release of Safe Work Australia’s Managing psychosocial hazards at work Code of Practice, there are new responsibilities for a person conducting a business or undertaking (PCBU) to manage the risk of psychosocial hazards in the workplace.

“This means organisations are required by law to identify and control psychosocial hazards in the same way they manage other physical hazards, like manual tasks that might lead to a back or shoulder injury,” said UNSW Sydney’s Associate Professor Carlo Caponecchia, an expert in managing psychosocial hazards at work. These updated regulations have certainly drawn more attention to these issues and placed increased pressure on organisations to follow through, he explained.

In addition to the regulations, he said many states also have Codes of Practice that provide additional guidance on how to comply with the regulation. This is in addition to a new Australian and International Standard (ISO45003) which outlines what organisations should be doing as part of their safety management system to address psychosocial risk.

UNSW Sydney’s Associate Professor Carlo Caponecchia.jpg
UNSW Sydney’s Associate Professor Carlo Caponecchia said new regulations around managing psychological hazards have placed pressure on organisations to follow through with meaningful action. Photo: supplied

As a member of the delegation that wrote the new International Standard on Psychological Health at Work, A/Prof. Caponecchia has been collaborating with industry and government to help organisations realise the importance of addressing these issues. “We’ve been talking about psychosocial risks for decades: what they are, where they fit, what businesses have to do, and what guidance applies. But there have been several landmark cases that have drawn attention to poor treatment at work – particularly around workplace bullying and harassment,” said A/Prof. Caponecchia, who serves as the key facilitator for the new UNSW Lifelong Learning Course, Managing Psychosocial Risks at Work.

“The 2012 House of Representatives enquiry into workplace bullying, social movements like ‘Me Too’, the Boland Review in 2018, which ultimately led to the recommendation to change the regulation – these events, combined with research and advocacy at a policy level have all led to this focus on reducing psychosocial hazards at work, which is why this course has come about at such a critical time.” 

Quantifying the impact of psychological hazards

If statistics around worker’s compensation claims are anything to go by, PCBUs need to take these regulations seriously. A recent analysis by Safe Work Australia found that mental health conditions accounted for 9.2 per cent of serious workers' compensation claims (11,700 in total) in 2021-22. While this was a slight decline compared to 2020-21, it remains substantially higher (a 43.3 per cent increase) than 10 years ago.

Safe Work Australia said this represents the largest growth in the number of claims each year for a nature of injury or illness major group observed over the period. "Workplace mental health conditions are one of the costliest forms of workplace injury. They lead to significantly more time off work and higher compensation paid when compared to physical injuries and diseases," Safe Work Australia said in its analysis.

Furthermore, the median time lost from mental health condition claims in 2020-21 (34.2 working weeks) was more than four times the median time lost across all claims (8.0). The median compensation paid for mental health condition claims in 2020‑21 ($58,615) was close to four times the median compensation paid across all claims ($15,743).

Read more: How can organisations improve employees' psychological safety?

On a practical workplace level, some of the most examples of common psychosocial hazards in the workplace include: 

- Lack of autonomy: employees are micromanaged and not empowered to make decisions
- Role ambiguity: employees are unsure where their responsibilities start and end
- Workload: employees are expected to complete an unrealistic amount of work in their allocated hours or don’t have enough work to fill their week
- Role conflict: employees are told to meet certain KPIs but aren’t given the tools, training or time to do so
- Isolated work: employees feel disconnected from the business because of the way work is structured
- Lack of opportunity: employees don’t have access to opportunities for role development or career progression
- Bullying, harassment, violence and discrimination: the organisation’s systems don’t adequately prevent or address instances of workplace violence.

The impact of psychological hazards can vary based on frequency and duration of exposure, and can lead to frustration, lack of motivation and drops in productivity. In some cases, workplace-related psychological harm can lead to clinically diagnosed conditions like depression and anxiety and the potential for substance abuse and social withdrawal. “It’s vital to consider how these hazards combine, because the accumulation of psychological harm can amplify the negative outcomes that a person and organisation experience,” said A/Prof. Caponecchia.

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WHS and HR professionals can struggle with understanding how to address psychological hazards, and sometimes lack the scope and resources required to tackle their root causes. Photo: Getty

Psychological hazard band-aids and solutions

The management and mitigation of psychological hazards in the workplace is new ground for many WHS and HR professionals. As such, many of them struggle with understanding how to address such hazards, and sometimes lack the scope and resources required to tackle their root causes.

“The most commonly used strategies include stress management, mindfulness, resilience training and exercise programs, but the problem with those interventions is that they’re all focused on the individual,” said A/Prof. Caponecchia. “The hazards we’re talking about come from the way work is structured and managed, so that’s where we need to intervene. We would never ask someone who’s exposed to harmful noise at work to just get better at dealing with noise. Consistent with workplace health and safety practice, we’d fix the noise.”

Psychosocial hazards can manifest in myriad ways, from how work is organised and supervised to the work environment and equipment provided. Psychosocial risk management focuses on identifying these hazards and reducing the degree of psychological harm that occurs as a result. A/Prof. Caponecchia explained that the first step should not be resilience training or giving people yoga at work: “It’s about protecting people from harm and realising the opportunity that when you control these types of hazards, not only do you reduce the negative impacts on people’s health, but you improve the efficiency and productivity of the organisation,” he said.

Read more: Lucinda Brogden: how leaders can improve workplace mental health

Turning theory into psychosocial hazard reduction action

Based on A/Prof. Caponecchia’s research and close collaboration with industry, he observed there is a strong need for more formalised training in managing and mitigating psychological hazards and risks in the workplace. “Since the new regulation has come into effect, the pressure has ramped up for organisations to take this seriously, and people have been asking for more assistance in this area,” he said. 

“We’re seeing HR professionals, work health & safety officers and those involved in safety management, but of course many senior managers have oversight of these issues, so it’s relevant to a whole suite of roles: people and culture officers and wellbeing managers included. It doesn’t matter what you do, where you do it, how you do it or who you do it with – everyone can be exposed to psychosocial hazards. And so, every organisation has the responsibility to address and minimise these hazards.” 

A/Prof. Caponecchia emphasised that this shouldn’t be seen as another tick-box exercise. Organisations must meet their legal obligations, but he said they also have an opportunity to make a genuine positive impact on the lives of their employees and on their own bottom line.

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In response to the new regulation and growing demand for training in this area, the UNSW Lifelong Learning Hub is launching a new short course Managing Psychosocial Risks at Work: a self-paced online course, designed to help organisations meet their legal obligations in identifying and controlling psychosocial hazards at work. Designed and led by A/Prof. Caponecchia, the course is suitable for anyone who plays a role in workplace health and safety. “Having a more formal opportunity to gain a micro-credential in psychosocial risk gives people the confidence to take these learnings back to their organisations and start making positive changes,” he said.


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