Psychosocial risks: The latest detriment to wellbeing

Psychosocial risks are damaging to a workplace. If not corrected, these hazards can impact the safety and wellbeing of employees.

In fact, Gallagher’s Workforce Trends Report 2023 found that psychosocial risks play a huge role in the decline of workers’ wellbeing in the workplace.

According to Gallagher, 48 per cent of respondents reported high wellbeing, 4 percentage points lower than in 2022. With over half of employees not meeting this mark, Gallagher said this has resulted in poorer productivity and morale and led to an increase in turnover.

Psychosocial risks are reportedly on the rise. In 2014–2015, they made up 6.2 per cent of all serious claims. In 2020–2021, they made up 9.3 per cent. Gallagher also noted that psychosocial risks were the costliest claim, too, with a median cost of $55,270 per claim, compared to $13,883 for physical injuries and diseases.

Younger workers saw wellbeing at 5 per cent lower than their older colleagues. Furthermore, the study found that 46 per cent of respondents continued to work when they felt they needed time off. This figure stood at 31 per cent last year.

The best way an employer can deal with these issues is by going beyond salary, and creating healthy workplace through benefits, safety, flexibility, and ongoing training, said Gallagher.

Dr Scott Krebs, head of HR and people experience consulting at Gallagher, commented: “In today’s challenging recruitment market, employers who recognise the importance of providing a range of benefits that cater to a varied workforce are more likely to attract — and more importantly — retain staff.”

“Our research reveals not only the importance of workplace wellbeing but also the psychosocial risks that are coming into focus for all organisations. However, many employers lack an understanding of how to approach and resolve these risks from a practical perspective.”

Employees’ needs should be considered when implementing policy. By listening to what your workforce wants, employers can better look after the wellbeing of staff.

The most important benefits, as voted by employees, were:

• Flexible working arrangements (70 per cent)
• Professional training and development (69 per cent)
• Career development programs (63 per cent)

In regard to promoting healthy workplaces, respondents said they were happier and engaged when mental health support was available, and employers made an effort to create a sense of community and belonging.

Dr Krebs added: “Where meaningful change to workplace wellbeing has been made, our research reveals that employees are 2.3 times more engaged at work, 1.7 times more likely to stay with the organisation, and 1.5 times more willing to go above and beyond.”

“Our research shows that psychosocial risks are coming into focus for organisations, but employers still lack awareness of what factors impact workplace wellbeing. Employers need to take focused and deliberate action to address these risks and prioritise employee wellbeing or face the significant financial and social costs.”