ERM International



Beyond psychosocial hazards, our head of risk culture, capability and change, Rob Jack, offers five practical ways to turn compliance obligations into organisational opportunities.

Somewhat of a recurring plat-du-jour over the past few years, psychosocial hazards (defined here on Safe Work Australia) finally seem to have crystallised on the enterprise risk landscape. 

The release of ISO45003 in 2021 has raised international awareness, and, in Australia, new Commonwealth Workplace Health and Safety (WHS) laws were introduced in April 2023.

These new standards, coupled with (in some jurisdictions) explicit positive duty (explained here) and the potential for criminal liability, have spurred a flurry of activity across many workplaces.

This has by no means been the starting point for many organisations. Commencing in the early naughties, many leading organisations recognised the importance of their employees’ mental health on building a capable, productive organisation. They began experimenting with a range of initiatives, mostly focused on individual employees, designed to support mental health and overall wellness.

It is still far from clear, however, which of the many varied organisational responses are effective in addressing the underlying risk and legislative requirements, let alone capturing potential opportunities.

Somewhat surprisingly, some organisations are now recognising that these psychosocial challenges are amplified by their recent progress in addressing workforce imbalances in gender, ethnicity, and cultural background, as well as other diversity, equity, and inclusion objectives. New and visible expectations of respectful behaviour are at times visibly clashing with long-held (and generally undesirable) ‘norms’.

Five practical suggestions

Here are five practical ways you can turn a minimum compliance response into an opportunity to create real value for the workforce and your organisation.

1. Assess your risk

Psychosocial hazards refer to factors that can adversely affect employees’ mental and emotional well-being, such as (but not limited to) excessive workload, inherently traumatic work, lack of support, violence, bullying, and discrimination. These are known to lead to stress, burnout, and decreased productivity, and ultimately to long-term mental and physical injury.

In recent months, many state and federal agencies have provided a plethora of comprehensive resources, seemingly unpacking every facet of the psychosocial space (start here on Safe Work Australia if you need a suggestion).

However, it should go without saying that to maximise the effectiveness of your response, each organisation needs to assess how psychosocial hazards manifest in their workplace based upon the specific nature of their work, workers and workplaces.

For small organisations, this may be a single structured risk assessment, but for larger organisations, particularly those with multiple sites and varied workforces, it may be appropriate to conduct multiple parallel assessments.

This not only ensures you’re focusing your efforts on what matters most, it also provides the chance for forward-thinking organisations to apply an (upside) opportunity lens to the conversation. 

By asking “what needs to be true” to create an inclusive and engaging workplace, and a more capable and productive workforce, Risk and HR professionals have an opportunity to elevate the conversation beyond compliance and simply avoiding hazards.

2. Pinpoint accountability and critical controls

Even without a formal assessment, most organisations will likely have several existing controls to manage psychosocial risks. These can range from essentials, such as job descriptions (or success profiles) and onboarding, to more specific HR and safety policies, through to clearly defined cultural and behavioural standards, and sophisticated resilience and mental health programs.

This broad-based approach can be a great foundation for safeguarding against psychosocial risk. However, with increasing regulatory scrutiny, and the potential for sanctions and litigation, it is unlikely, particularly for larger employers, that such a laissez-faire approach will be sufficient. As with any other material enterprise risks, it’s important to have clear ownership and accountability to drive the prioritisation and formalisation of robust controls.

This can also be the opportunity to agree on what components of your organisation’s response will be owned and managed at different levels (global, national, regional and/or local).

For example, while it’s likely that cultural and behavioural standards may be defined at a whole-of- organisational level, it’s also probable that the application and verification of these will vary at the local or individual office level.

Similarly, while background screening might be best applied nationally, it may be entirely appropriate to consider job-design and rostering at a site level. Taking a practical and pragmatic approach can also delineate the controls that that have a disproportionate impact and avoid forcing consistency and compliance where it doesn’t make sense.

3. Monitor respectful behaviours not training completions

In many ways, the focus on psychosocial risk is not new to Australian workplaces. Even before the Racial Discrimination Act of 1975 and the Sexual Discrimination Act of 1984, many employers have been trying to challenge cultural and behavioural norms in their workplaces.

The bulk of these efforts have been founded upon training, initially instructor- or manager-led interventions designed to challenge the existing mindset and establish new behavioural expectations. As with all (post-pandemic) training, these interventions have been almost exclusively moved online, with many organisations requiring the annual completion of a universal suite of compliance training (which is almost always universally despised).

What is most remarkable is that training continues to be considered the backbone of psychosocial controls. However, if you ask any risk professional, they will provide you the rote-learnt response that “training is not a control”. So maybe now (some 50 years after these initial Acts), we’re finally able to move beyond the compliance mindset of recording training completions.

Instead, we have an opportunity to shape our controls around verifying the key tenants of respectful behaviours that training initiatives have been promising to deliver.

4. Design responsive mitigating controls

Resilient organisations recognise that even with well-designed preventative controls, some psychosocial events will occur. As with all risk events, it is crucial that the organisation is ready to respond. Mitigating controls must be informed by the nature of the work and workforce and organisations need to ensure they have the capability to effectively respond when psychosocial events occur.

For many organisations, this will include a specialist person-centred response and where appropriate, trauma-informed care, as well as investigation and disciplinary responses. (For those with an interest in this space, see this recently published UNSW research.)

Getting the controls and associated capabilities right can not only minimise harm but can go a long way in addressing the systemic harassment, discrimination and even violence that continues to plague some Australian workplaces.

Seen in this light, whole-of-organisation psychosocial programs provide the opportunity to prioritise organisation-wide investment and focus this on delivering a more inclusive and equitable workplace.

5. Normalise the conversation and build resilience

According to Black Dog Institute, one in five Australians will experience mental health challenges each year. While occupational factors often contribute to psychosocial events, in many instances an employer may have no direct accountability. This does not mean, however, they don’t have a vested interest in supporting their employee.

In constrained labour markets, and with an almost continuous “war for talent” (history here), having structured programs that normalise mental health and wellness conversations, nurture development and provide people with the tools to build their own resilience can genuinely differentiate the workplace.

This is not just about building the resilience of individuals to psychosocial hazards. It is also integral to workforce productivity and resilience, and a critical component of an organisation’s resilience to longer-term structural, emerging and catastrophic risks.

Two key enablers to bring it together

To bring this altogether, there are a couple of key enablers that every organisation must consider as part of their psychosocial approach.

Data transparency

One of the key findings that is emerging from academic research is the importance of publishing and sharing data associated with psychosocial risks. (For clarity, this would be depersonalised data, reflecting the frequency and severity of events, as well as the application and performance of key controls.)

Although the sharing of physical health and safety data is a long-standing practice in high-risk environments, the corresponding publication of psychosocial data is still far from the norm for most organisations.

Getting this aspect right can have two important benefits. Firstly, it further normalises the topic at all levels of the organisation and leaves everyone with certainty about the consistency of the organisation’s priorities. Secondly, the correlation of these datapoints, particularly event and control data, can be instrumental in informing and shaping the organisation’s long-term response.

Managers matter

An integral feature in just about every aspect of managing psychosocial risk is the ‘people manager’. From establishing the cultural expectations to role modelling behaviours, identifying the warning signs and ensuring a prompt and effective organisational response, people managers are the common and crucial component. It is vital to ensure an appropriate amount of focus and investment in building the capability of managers and integrating the organisation’s psychosocial approach into all core leadership development programs.

Where to next?

Our team at ERM International can help. Our head of  risk culture, capability and change, Rob Jack, has spent his career working in this field and is passionate about helping organisations to design psychosocial strategies that meet their needs. Contact Rob or our founder, Anthony Reardon, if you would like to discuss in more detail.

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Written by:

Rob Jack

Posted On:

9 October 2023

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