Reducing the risk of psychosocial hazards in the workplace

Mental health issues are on the rise, and psychosocial hazards at work can play an important contributing role in such issues. Is your business in need of an “intervention”?

In the past, workplace safety regulations and interventions have primarily targeted physical dangers. Imagine a factory floor – the focus has been on preventing slips, trips, and falls, ensuring proper use of personal protective equipment like goggles and gloves, and maintaining machinery in good working order to avoid physical injury. This approach has reduced both fatalities and prevented serious harm.

Another risk that is rising in prominence is psychosocial hazards, which can affect employee wellbeing and business productivity. Non-physical aspects of the work environment can significantly impact employee mental health and wellbeing, and can even lead to physical harm. Unlike a slippery factory floor or a malfunctioning machine, psychosocial hazards are not always readily apparent. They can be subtle, insidious factors that slowly erode employee morale, create stress, and lead to problems like anxiety, depression, and even burnout.

The growing awareness of psychosocial hazards highlights a critical gap in traditional workplace safety approaches, according to Dr Christian Criado-Perez, a Research Associate in the Business Insights Institute at UNSW Business School. While physical safety remains paramount, he said a more holistic view is needed to ensure the overall wellbeing of employees.

“There are different factors at play when it comes to psychosocial hazards, and there has been a concerning rise in mental health issues related to the workplace, which can have a significant impact on our work and personal lives,” he said. “Importantly, businesses need practical solutions to create a safe and healthy work environment that addresses physical and mental wellbeing. By prioritising the mental health of their workforce alongside physical safety, businesses can foster a more productive, engaged, and resilient workplace for all.”

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UNSW Business Insights Institute's Dr Christian Criado-Perez says that psychosocial hazards can be insidious and difficult to pinpoint when compared to physical hazards. Photo: supplied

What are psychosocial hazards?

Psychosocial hazards encompass various aspects of the work environment that can negatively affect an employee's psychological, emotional, and physical health (mental health, physical health). These factors can subtly erode employee wellbeing, creating problems that can significantly impact not only individuals but also business productivity.

Dr Criado-Perez explains: “Unlike a physical hazard with a clear cause-and-effect relationship, such as a slippery factory floor or a malfunctioning machine, psychosocial hazards can be insidious and difficult to pinpoint. Therefore, their impact on employees can often go unnoticed despite impacting the individual, their colleagues, and their families.”

According to Dr Criado-Perez, key factors that can impair psychosocial safety at work include:

Work demands: Excessive workloads, tight deadlines, and a lack of control over work tasks can create significant stress and anxiety.

Job insecurity: Fear of job loss, restructuring, or uncertain work hours can create a constant state of anxiety and negatively impact mental wellbeing. Employees who feel insecure about their jobs may experience difficulty concentrating, decreased motivation, and a withdrawal from work activities.

Poor workplace relationships: A negative work environment characterised by workplace bullying, sexual harassment, or a lack of social support from colleagues can lead to feelings of isolation, depression, and anxiety. These negative social dynamics can significantly impact employee morale and create a hostile work environment.

Poor role clarity: A lack of clear expectations, conflicting instructions, or uncertainty about job responsibilities can be a major source of stress for employees. Feeling inadequate or unsure of what is expected can lead to decreased productivity, errors in judgment, and ultimately, a decline in employee morale.

Isolated work: A lack of social interaction and feelings of isolation, particularly for remote workers, can negatively impact mental health. Social interaction is a fundamental human need, and prolonged periods of isolation can contribute to feelings of loneliness, depression, and decreased motivation.

Read more: How to manage psychosocial hazards in the workplace

Beyond these core categories, Dr Criado-Perez said other factors can contribute to a psychosocial hazard in the workplace, including:

Poor work environment: Unpleasant, unsafe, or poorly designed workspaces can contribute to stress and discomfort. Examples include inadequate lighting, excessive noise, or extreme temperatures.

Poor organisational justice: A perceived lack of fairness in decision-making or treatment of employees can lead to feelings of resentment and decreased morale. When employees feel they are not being treated fairly, it can erode trust in leadership and negatively impact workplace culture.

Poor organisational change management: Ineffective communication and lack of employee involvement during organisational changes can create uncertainty and stress. Employees who feel blindsided by changes or excluded from the decision-making process may experience anxiety and resistance to the new way of working.

“The prevalence of issues related to each of these categories will vary depending on the sector or industry,” said Dr Criado-Perez. “Further, since the expansion of remote and hybrid work some of them might have been mitigated or heightened. Its important to assess and understand what is likely to be impacting your staff in particular, and to put in place measures that align with the employees’ context and minimise psychosocial hazards.”

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Ineffective communication and lack of employee involvement during organisational changes can create uncertainty and stress. Photo: Adobe Stock

The prevalence of psychosocial hazards

There are some important workplace trends in psychosocial hazards around the world. A study published in the Journal of Occupational and Environmental Medicine, for example, found that work-related stress is a significant contributing factor to employee mental health issues. Similarly, a Safe Work Australia report indicates a concerning increase in worker compensation claims related to psychological injuries.

These trends highlight the urgent need for businesses to prioritise addressing psychosocial hazards in the work environment, according to Dr Criado-Perez. He pointed to some factors that are contributing to the growing prominence of psychosocial hazards:

The changing nature of work: The modern workplace is characterised by increased job demands, longer hours, and a constant state of connectivity. This can blur the lines between work and personal life, leading to feeling overwhelmed and difficulty switching off.

Economic uncertainty: Job insecurity and precarious work arrangements can create a constant state of anxiety for employees. Fear of job loss or financial instability can significantly impact mental wellbeing.

Technological advancements: While technology can offer many benefits, it can also contribute to psychosocial hazards. The constant pressure to be available and respond to emails or messages can lead to stress and feelings of being overwhelmed. Additionally, automation and artificial intelligence (AI) may create concerns about job displacement, further exacerbating feelings of insecurity.

Globalisation: The increasing pace of globalisation can lead to feelings of isolation for employees, particularly those in remote teams or geographically dispersed workplaces. A lack of social interaction and feelings of isolation can be a significant psychosocial hazard.

Shifting workplace demographics: The workforce is becoming increasingly diverse in terms of age, ethnicity, and background. It is crucial for businesses to ensure that their work practices are inclusive and cater to the needs of a varied employee population. A lack of inclusivity or discrimination can contribute to feelings of marginalisation and negatively impact mental health.

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Having a bad boss can contribute to physical health problems, and one study found that it shortens your life more than smoking. Photo: Adobe Stock

These trends underscore the importance of proactive measures to identify and address psychosocial hazards before they take root in the workplace, according to Dr Criado-Perez. He also pointed to the need for organisations to prepare for the next generation of employees, who may be more susceptible to some hazards. If younger employees started their working life in the pandemic, for example, he said their social and emotional support at work may have been adversely affected by remote working and a lack of physical interaction with colleagues in the workplace.

The impact of psychosocial hazards on work health and safety (WHS)

The consequences of psychosocial hazards extend far beyond employee wellbeing, and Dr Criado-Perez said these factors can significantly impact a business' WHS outcomes in multiple ways.

Mental health and psychological injury: Psychosocial hazards can lead to a range of mental health problems, including anxiety, depression, and burnout. These conditions can significantly impact employee productivity, engagement, and absenteeism. “Employees experiencing mental health issues may struggle to concentrate, meet deadlines, or collaborate effectively with colleagues,” said Dr Criado-Perez. “This can lead to a decline in overall business performance.”

Physical health and physical injury: Chronic stress caused by psychosocial hazards can manifest in physical health problems such as headaches, high blood pressure, and musculoskeletal disorders. In severe cases, stress can even contribute to heart disease and stroke. Employees experiencing chronic physical health problems may be more likely to take sick leave or experience reduced productivity. One study even found that having a bad boss shortens your life more than smoking.

Read more: How BVN is striking the right balance with hybrid working

Work-related injury and workers' compensation claims: Psychosocial hazards can indirectly contribute to an increased risk of work-related injuries. For instance, stress and fatigue can impair judgment and coordination, increasing the likelihood of accidents. This can lead to a rise in workers’ compensation claims for businesses. The financial costs associated with work-related injuries can be significant, impacting a business's bottom line.

Presenteeism: While absenteeism is a concern, presenteeism can also be a negative outcome of psychosocial hazards. Presenteeism refers to employees coming to work but not being fully present or productive due to mental or physical health issues. This can have a significant impact on the quality of work and overall team performance.

By recognising the far-reaching consequences of psychosocial hazards, Dr Criado-Perez said businesses can develop a strong rationale for investing in strategies to create a healthier and more supportive work environment. “It is important to keep track of your staff’s psychosocial safety. The moment a critical mass of employees start to struggle with psychosocial hazards, it can quickly influence the perceptions of their peers about what is considered normal in the organisation (such as being overworked, stressed or disrespected). This can facilitate unhealthy social norms that spread across the organisation,” said Dr Criado-Perez.

Some managers also struggle with the idea of having to care about the overall wellbeing of their staff, or assume that the existing hazards are inevitably ‘part of the job’, but Dr Criado-Perez said the lived experience of a growing number of organisations is debunking this line of thought. “It’s simply economically (and morally) logical to create a work environment where psychosocial hazards are monitored and minimised. This is particularly important for managers of knowledge workers as they need their team to be mentally healthy to perform cognitive tasks, just like a sports team needs their athletes to be fit for physical effort,” he said.

Developing a risk assessment matrix for psychosocial hazards can help to evaluate the potential severity of various hazards at work.jpg
Developing a risk assessment matrix for psychosocial hazards can help to evaluate the potential severity of various hazards at work. Photo: Adobe Stock

Practical solutions for addressing psychosocial hazards

Businesses can take steps to proactively identify, assess, and control psychosocial hazards in the workplace, according to Dr Criado-Perez. Identifying common psychosocial hazards involves steps that can assist organisations to foster a healthier and more supportive work environment:

Utilising resources: Businesses can leverage resources from Safe Work Australia or relevant WHS authorities to identify common psychosocial hazards that may be present in their specific workplaces. These resources can provide guidance on recognising potential hazards associated with factors like workload, job insecurity, workplace relationships, role clarity, and physical work environment.

Employee surveys and focus groups: Conducting confidential employee surveys and focus groups can be valuable for understanding employee experiences and identifying areas of concern. Questions about psychosocial safety can be included as part of their regular engagement survey, performance review, or 360 evaluations of their peers and direct supervisors. These methods can help uncover underlying issues related to stress, anxiety, or feelings of isolation (through isolated work) that may not be readily apparent to management.

Risk assessment matrix: Developing a risk assessment matrix specifically for psychosocial hazards can be a systematic way to evaluate the likelihood and potential severity of various hazards in the workplace. This can help businesses prioritise their efforts and focus on addressing the most significant risks first.

Read more: Where organisations go wrong in managing psychosocial hazards

A case study in reducing psychosocial hazards

Recently, the UNSW Business Insights Institute has helped a number of organisations with guidance on how to address issues around psychosocial hazards. Dr Criado-Perez recalls that one of these organisations was beginning to receive anecdotal evidence of psychosocial hazards affecting their staff.

To help the organisation tackle this problem, Dr Criado-Perez said the team and the institute first drew on scientific research to identify practices that reduce psychosocial risks. The team also engaged with the organisation’s staff to gain a deep understanding of their particular issues, such as their work pressures, expectations, and resources available to deliver.

“We then examined the existing processes and mechanisms that helped address psychosocial risks and recommended key interventions to address the identified weaknesses in their processes and management practices. More specifically, we provided recommendations related to the alignment of job resources and job demands, reward and recognition structures, capability upskills in leadership and psychosocial safety, and monitoring and reporting practices,” said Dr Criado-Perez, who added that the organisation’s senior management team is currently reviewing the recommendations prior to implementing actions.

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By proactively identifying and mitigating psychosocial hazards, businesses create a work environment that supports the mental and physical health of their workforce. Photo: Adobe Stock

Implementing risk management strategies

The Work Health and Safety (WHS) Act 2011l requires a Person Conducting a Business or Undertaking (PCBU) to manage work health and safety risks (WHS). This includes developing and implementing a comprehensive risk management plan that addresses both physical and psychosocial hazards. Dr Criado-Perez said the plan should outline a clear framework for identifying, assessing, and controlling psychosocial risks, ensuring a holistic approach to workplace safety.

Managers, HR, WHS professionals and safety representatives: Managers at all levels of an organisation together with HR and WHS professionals (as well as safety representatives) play a crucial role in promoting a safe and healthy work environment. They can provide valuable expertise in identifying psychosocial hazards, developing and implementing risk management plans, and ensuring effective implementation of control measures. “These professionals play a crucial role in maintaining a sense of trust, ensuring psychosocial issues are taken seriously, and proactively minimising psychosocial hazards for their teams,” said Dr Criado-Perez.

Building a culture of wellbeing: In addition to implementing specific control measures, Dr Criado-Perez said that fostering a culture of wellbeing is essential for addressing psychosocial hazards in the long term. This can involve initiatives such as promoting healthy work-life balance, offering flexible work arrangements, encouraging employees to take breaks, and providing access to Employee Assistance Programs (EAPs) that offer mental health support services. By prioritising employee wellbeing and mental health alongside physical safety, Dr Criado-Perez explained that businesses can create a more positive, productive, and resilient workplace for all.

Building psychological safety: Many of the efforts and mechanisms to reduce psychosocial hazards will fail to do so if the employee does believe in an organisation’s intention to genuinely tackle this problem. If it is perceived as a box-ticking activity, Dr Criado-Perez said it can backfire and create additional frustration. “This is why taking action and communicating about it is important. This, in turn, can foster psychological safety, which is essential – so that when a staff member is struggling or detects a psychosocial risk he or she feels safe enough to report it without suffering any negative consequences for doing so,” he said.

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The future of work health and safety: addressing psychosocial risks

As the nature of work continues to evolve, addressing psychosocial hazards will become increasingly important for businesses. The rise of remote work, the constant pressure to be available, and the ever-changing economic landscape can all contribute to increased stress and mental health challenges for employees.

By proactively identifying and mitigating psychosocial hazards, Dr Criado-Perez said businesses can demonstrate their commitment to employee wellbeing and create a work environment that supports the mental and physical health of their workforce. “This holistic approach to WHS will be essential for ensuring a safe, healthy, and productive work environment for the future,” he concluded.

The UNSW Business Insights Institute delivers economic and business insights, research, and methods to business and government. Using a program-based approach consisting of Knowledge Hubs and Research Labs, the Institute helps industry partners solve complex challenges by linking them to academics and providing them with access to novel research insights. For more information, please contact Dr Christian Criado-Perez, Research Associate at the UNSW Business Insights Institute.


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