Psychosocial hazard compliance can become a revenue gain, not just a cost

National regulations require organisations to address the risks of psychosocial hazards. Here’s what that means, and how, with the right approach, compliance can be the first step towards tangible bottom-line benefits.

Absent all other information, which of these construction companies would you think is the most profitable?

• Company A, which has top notch rehabilitation for physical injuries.
• Company B, which has that and also preventive measures in place to prevent the accidents that cause such injuries.
• Company C, which has both of those things and its employees are self-motivated to look after their physical health.

The answer is self-evident – C. But imagine the exact same question being asked except we replace “construction” with “professional services”, and “physical injuries” with “mental health issues”. The same logic surely applies, but chances are we’d never apply it.

For a long time, mental health has been viewed as the sole responsibility of the employee, where, if there are issues, it’s to be found in the mind of the worker. This attitude has lagged our knowledge about the reality of mental health.

Just as we know for a fact that there are genuine risks associated with working at high elevations or deep in a mine, we also know that some workplace conditions can exacerbate, or precipitate mental health issues.  

The regulatory environment has caught up to this understanding, which is why across most Australian jurisdictions we now have legislation (following the national model WHS regulations) that require employers to monitor and manage psychosocial hazards at work. In other words, every organisation is expected to be some version of Company B.

The question employers should be asking themselves is, will we take a compliance-only approach to this regulation, or will we go the extra mile to reap the full benefits of a workplace that prioritises mental health?  

Do we just want to increase the hours and costs associated with workplace health and safety, or do we want reduced absenteeism, presenteeism, and to retain our best staff?  

Do we want to be Company B, or Company C?

The compliance-only approach

The simplest way to understand psychosocial hazards is to keep to the comparison with physical hazards, as the regulations around the former are designed to mirror the latter.  

The most clear-cut psychosocial hazards are also the most dire – workplace bullying, harassment, or even violence. While not always reported, given existing workplace regulation and cultural knowledge around harassment, most organisations know they must address such hazards, including not just responding to them when reported, but trying to prevent them.  

The less obvious but probably far more common psychosocial hazards are those we view as side-effects of modern work, including demanding periods, high stress culture, work-driven isolation, and low job role clarity. (See here for a more extensive list).

Think of an accounting firm around tax time. Everyone is working longer with competing demands, even as they must diligently avoid errors that could be costly for clients. The risks are burnout, interpersonal conflict, worse support (because nobody has the time to help), and so on.

There is now a regulatory expectation that “tax time” would be viewed as a psychosocial hazard and dealt with accordingly.

Credit: Safe Work Australia

The model approach put forward by Safe Work Australia involves four steps in this process, all of which require employee consultation and proper documentation:

1. Identify hazards – in the example above, that would be consulting employees and discovering the increased work demands, and changed nature of work, as potential issues during a certain time of year.

2. Assess risks – having identified the hazard, you must then assess it for what kind of risks it presents, how serious those risks are, and how likely they are.

3. Control risks – if the risks can be eliminated, they must be. Otherwise control measures should be implemented to minimise them. For example, the nature of the work might mean longer hours are unavoidable, but can you mitigate the harms by hiring temporary staff, or offer training to help with the stress it causes?

4. Review control measures – this means checking in to make sure the measures you’ve taken work as intended, and making changes if required.

The risk of a compliance-only approach

Accomplishing the above would make you compliant, which is a necessity. But aiming for compliance alone is, at best, a missed opportunity.

Staying with the example above, if the accounting firm tries to control risks with the simplest solutions – say giving employees a single training session on managing stress and letting them know they have access to an EAP – it’s possible this will have satisfied regulations. However, the actual negative effects of the hazard may remain.

For individuals, these effects are burnout, dissatisfaction, and so on. On the organisational level, it’s an increase to the total cost of absence.  

That could look like this: A few accountants take sick leave during the highly stressful time, which puts more stress on the others and they exhibit signs of presenteeism – they’re on deck, but either the quality of work suffers or the work falls behind completely – which means now clients are concerned and some investigate taking their business elsewhere.

What at first blush looks like a WHS compliance issue can quickly become a bottom-line concern, and that’s before you factor in compensation claims.

(If you want to see what the total cost of absenteeism might look like in your organisation, Healthy Business offers a useful calculator.)

It would be nice if quick interventions were effective, but they aren’t. One training session, for example, can’t achieve lasting results. Intuitively we all know this to be true, just as we know a single workout session won’t make you fit, but study after study has established it as fact.

Indeed, a 2021 review of 74 studies into workplace health and wellbeing practices found a “critical” success factor was “continuity in efforts at implementing, adapting, or otherwise sustaining the intervention”.

Maturing beyond compliance

An illuminating way to look at wellbeing maturity is with the analogy of a stream.

1. Treatment – This is an organisation that offers services for those who’ve had a health issue, like Company A from above. While required, if you only offer treatment the individual and the organisation has already suffered.

2. Early intervention – Higher up the stream. This is where through training and other services individuals become aware they’re at risk of a health issue before it occurs. They know when they’ve been triggered for a potential problem and seek help.

3. Prevention – Even higher up the stream, this is where employees are motivated or coached to do things that stop them from being triggered at all. On the individual level, you can think of it as a worker making sure they get enough sleep, don’t drink excessively, and so on.

4. Proactive education – This is where wellbeing becomes a cultural value, so that awareness of its importance permeates the organisation.

No matter how good the environment is and how good the individual support is, people are still going to become unwell or injured in a workplace. That’s why all of the above can be important, even in isolation. But isolated, they’re effectiveness has a hard upper limit.  

A culture that encourages wellbeing awareness can only do so much when an individual needs active help. At the same time, the further up the stream you’re thinking about wellbeing, the less often you’ll experience the high costs associated with treatment.

The Healthy Business difference

As our name tells you, Healthy Business thinks holistically about business health, from worker wellbeing to bottom-line concerns. That’s why our approach is consultative; we start with questions and not answers.  

If you come to us wanting to know about becoming compliant with the psychosocial hazard legislation, we start with a progress review tool. This helps you understand where you are in respect to compliance. If you’re not there yet, we let you know how we can support you so that you meet all requirements.  

If you’re already identifying and managing risks, we can get you to that next stage of maturity, where your total cost of absence will be reduced and compliance isn't just a cost, but the first step towards a stronger, more profitable company.

Want to know more? Get in touch.

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