Are psychological safety laws being rendered useless in SMEs?

Addressing psychological safety in the workplace is a new imperative for Australian businesses, with significant consequences for falling short. According to one lawyer-turned-psychological safety professional, small businesses are struggling to implement strategies that can create a safer work environment.

Against the backdrop of Australia’s relatively new psychological safety laws, a formerly burnt-out lawyer is seeing far too many stressed-out business owners, partially due to struggles to maintain a psychologically safe working environment.

“Being unable to sleep, rest, switch off and having a constantly busy brain are all symptoms of being stressed at work,” said Sharné Lategan, a former firm principal, who now serves as the chief executive consultant for Sharné Consulting and describes herself as a reformed lawyer.

“And the poor business owner who is as stressed as their staff, struggle to not only get their head around the new psychological safety legislation but also have no idea how to implement or create a safer work environment.”

A recent MYOB report highlighted a similar trend, with 31 per cent of business owners aware that they need mental health support, 44 per cent having experienced anxiety and 61 per cent believing they could do more to improve mental health and wellbeing.

With business owners admittedly struggling to cope but hesitating to take action, it can set an alarming precedent for the workers who fall under their umbrella.

Recent data from Safe Work Australia reinforced this sentiment:

• Australian businesses lose an estimated $4.7 billion annually due to absenteeism linked to mental ill-health, and $6.1 billion due to presenteeism, where employees are present but not productive.
  • Poor mental health results in 12 million days of absenteeism, placing additional strain on already stretched business owners.
  • Since 2017, mental health claims have risen by 36.9 per cent, with lost time averaging four times longer, and compensation being three times higher than for physical injuries.

As the projections for these mental health claims are expected to double by the end of the decade, proactive and efficient mental health strategies require real buy-in from employers and employees across SMEs and large organisations.

If not, costs will fall heavy on the shoulders of business owners, and bleed through to employees – only exacerbating the issues that are catalysts for ill mental health.

“The psychological safety legislation offers a path to reverse the significant losses and stressors associated with ill-mental health in the workplace,” Lategan said.

“While business owners may find the code complex and daunting at first, it holds the potential to transform workplaces into environments of increased productivity and decreased absenteeism.”

Although the laws may be complex, they are crucial. In the law space especially, tasks can be extremely strenuous, and exhausting. Therefore, smaller businesses must invest in mental health strategies to ensure the safety of their staff and their business outcomes.

According to the Productivity Council's inquiry, for every dollar invested in mental health initiatives, businesses can expect a return of $1.30 to $4.

“This shifts the focus from onerous compliance to prudent decision making,” Lategan said.