Can you afford not to manage Psychosocial Hazards?

No - according to the NSW Government who in its recent report to address the sustainability of the workers compensation system concluded that employers can expect the premiums to rise by 36% over the next three years to 2027 – 2028.

Workers compensation insurer Allianz also indicated a worrying cost trend in that:

• 92% of mental health claims are successful

• the average claim costs just under $300,000

• there has been a 39% increase in the average number of days taken off work due to mental health in the last four years

Many commentators consider high job demands to be a key driver for primary psychological claims.

With many of us heading towards the end of financial year we are starting to notice our workloads ramping up. One of the hazard areas that employers need to be mindful of during such periods are high job demands: where the levels of physical, mental or emotional effort are pushed beyond what is ‘reasonable’.

What is reasonable will of course be different depending on how severe, prolonged or frequent the hazard is. So how do you know who is being exposed to high job demands in your workplace?

Areas to watch

Mental - does our workforce have the right skills and training to complete their work? Do our systems reduce or compound the likelihood of individual errors?

Physical - are our managers monitoring and enforcing appropriate leave and breaks? Are we adjusting our workforce numbers according to workload?

Emotional - are our workers trained to deal with difficult emotions? Do our managers model and apply civility?

Action Items

• Introduce one on ones to your business - regular (i.e. weekly or fortnightly) one-on-one meetings with a manager and their direct reports remains, in our experience, the most effective practice to reduce the risk of legal claims and have a more effective workplace.

• Train your managers to manage with civility – civility isn’t just about being ‘nice’. On the contrary, it is about demonstrating both warmth (ie I genuinely care for you as a person) and competence (ie I objectively apply performance standards). Don’t just take our word for it, the Harvard Business Review estimates that incivility costs U.S. businesses $2 billion per day in lost productivity. When on the receiving end of incivility, 63% of employees in a 2013 survey reported losing work time avoiding the offender, 66% said their performance declined, 80% lost work time worrying about the incident, and 25% admitted to taking their frustrations out on customers.

• Update your policies/procedures and provide contemporary training on how to apply them in a 2025 context - no one wins or creates cultural change through ‘gotcha moments’ or virtue signalling. When workers genuinely understand what something “Is” and “Isn’t” you get real ‘buy in’ and enduring practices.

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