The hidden costs of ignoring psychosocial hazards – and how HR can lead the change


With psychosocial safety in the spotlight, how can HR bolster their organisation’s strategy for identifying and addressing mental health hazards?

HR practitioners have long been tasked with safeguarding employee wellbeing, but the recent focus on psychosocial hazards has added new layers of responsibility and complexity. 

While many organisations recognise physical health and safety risks, the hidden costs of ignoring psychosocial risks are often overlooked until it’s too late.

The true cost of inaction

Psychosocial hazards – such as excessive workloads, lack of role clarity, workplace conflict and poor leadership – can have a profound impact on employee mental health and organisational performance. 

Left unaddressed, these issues can lead to higher turnover and increased absenteeism. In fact, research shows that stress-related absences cost Australian businesses an estimated $10 billion annually.

“Psychosocial hazards… can have a profound impact on employee mental health and organisational performance.”

Poor workplace psychosocial safety can also impact productivity. Hazards such as chronic stress can reduce focus, creativity and efficiency, leading to errors and missed deadlines.

Psychosocial safety is in the public spotlight following the introduction of a Code of Practice to manage psychosocial risks at work in 2023, and companies who fail to act on these hazards risk fines, litigation and reputational damage. 

HR as the catalyst for change

As people and culture experts, HR leaders are uniquely positioned to drive proactive strategies that protect both employees and the business. 

Tackling psychosocial hazards isn’t just about compliance – it’s about creating a culture where people can thrive. Here are a few ways HR can take the lead:

    1. Identify the risks. HR can conduct psychosocial risk assessments through activities such as employee surveys, focus groups and incident reports to uncover key stressors in the workplace.
    2. Embed leadership accountability. Train managers to recognise and address psychosocial hazards within their teams, helping to solidify psychological safety as a leadership priority.
    3. Implement practical controls. Introduce policies designed to recognise and reduce excessive workload, clarify job roles and provide employees with greater autonomy in decision-making. This will reduce feelings of overwhelm that could put employees’ mental health at risk.
    4. Create a feedback loop. Ensure managers are conducting ongoing consultation with employees to monitor the effectiveness of interventions and adapt them where necessary.
    5. Collaborate with WHS teams. Traditionally, WHS/Safety teams and HR have not worked closed together, and in some cases may even have been somewhat adversarial. If HR can take the lead in fostering a collaborative working relationship with safety teams, outcomes are often significantly improved.

Partnering for impact

For many HR teams, the challenge is often knowing where to start and how to gain buy-in from senior leadership. That’s where expert guidance can help. 

At DLPA, we specialise in equipping HR leaders with the tools, frameworks and strategies to effectively manage psychosocial hazards and create high-performing, resilient teams.

If you’re ready to take action, we can help you navigate the complexities of psychosocial risk management and embed sustainable change within your organisation.

Let’s start the conversation. Reach out to DLPA today to learn how we can support your HR team in tackling psychosocial risks effectively, or book your free consultation now.

Headshot of Karlie Cremin, Managing Director, DLPA

Karlie Cremin is the Managing Director of Dynamic Leadership Programs Australia (DLPA) and the CEO of Crestcom Australia.

More on HRM

The hidden costs of ignoring psychosocial hazards – and how HR can lead the change


With psychosocial safety in the spotlight, how can HR bolster their organisation’s strategy for identifying and addressing mental health hazards?

HR practitioners have long been tasked with safeguarding employee wellbeing, but the recent focus on psychosocial hazards has added new layers of responsibility and complexity. 

While many organisations recognise physical health and safety risks, the hidden costs of ignoring psychosocial risks are often overlooked until it’s too late.

The true cost of inaction

Psychosocial hazards – such as excessive workloads, lack of role clarity, workplace conflict and poor leadership – can have a profound impact on employee mental health and organisational performance. 

Left unaddressed, these issues can lead to higher turnover and increased absenteeism. In fact, research shows that stress-related absences cost Australian businesses an estimated $10 billion annually.

“Psychosocial hazards… can have a profound impact on employee mental health and organisational performance.”

Poor workplace psychosocial safety can also impact productivity. Hazards such as chronic stress can reduce focus, creativity and efficiency, leading to errors and missed deadlines.

Psychosocial safety is in the public spotlight following the introduction of a Code of Practice to manage psychosocial risks at work in 2023, and companies who fail to act on these hazards risk fines, litigation and reputational damage. 

HR as the catalyst for change

As people and culture experts, HR leaders are uniquely positioned to drive proactive strategies that protect both employees and the business. 

Tackling psychosocial hazards isn’t just about compliance – it’s about creating a culture where people can thrive. Here are a few ways HR can take the lead:

    1. Identify the risks. HR can conduct psychosocial risk assessments through activities such as employee surveys, focus groups and incident reports to uncover key stressors in the workplace.
    2. Embed leadership accountability. Train managers to recognise and address psychosocial hazards within their teams, helping to solidify psychological safety as a leadership priority.
    3. Implement practical controls. Introduce policies designed to recognise and reduce excessive workload, clarify job roles and provide employees with greater autonomy in decision-making. This will reduce feelings of overwhelm that could put employees’ mental health at risk.
    4. Create a feedback loop. Ensure managers are conducting ongoing consultation with employees to monitor the effectiveness of interventions and adapt them where necessary.
    5. Collaborate with WHS teams. Traditionally, WHS/Safety teams and HR have not worked closed together, and in some cases may even have been somewhat adversarial. If HR can take the lead in fostering a collaborative working relationship with safety teams, outcomes are often significantly improved.

Partnering for impact

For many HR teams, the challenge is often knowing where to start and how to gain buy-in from senior leadership. That’s where expert guidance can help. 

At DLPA, we specialise in equipping HR leaders with the tools, frameworks and strategies to effectively manage psychosocial hazards and create high-performing, resilient teams.

If you’re ready to take action, we can help you navigate the complexities of psychosocial risk management and embed sustainable change within your organisation.

Let’s start the conversation. Reach out to DLPA today to learn how we can support your HR team in tackling psychosocial risks effectively, or book your free consultation now.

Headshot of Karlie Cremin, Managing Director, DLPA

Karlie Cremin is the Managing Director of Dynamic Leadership Programs Australia (DLPA) and the CEO of Crestcom Australia.

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