Understanding Psychosocial Hazards

In April 2023, amendments were made to the Work Health and Safety (WHS) laws to include regulations on managing psychosocial risks and hazards at work. These changes mean that employers are now legally obligated to ensure the psychosocial safety of their team.

But what exactly is a psychosocial hazard and how can you spot one at work? It may occur from poor workplace relationships and environmental conditions, poor reward and recognition or even low job clarity – it all has the potential to land employers in hot water. The reality is that they can be far-reaching, tricky to monitor and occur through a range of different circumstances, making it even more difficult for employers to stay across.

Like with any new update to employment law, staying on top changes can be challenging to navigate. That’s why we’re breaking down what these new psychosocial laws mean for employers, how it affects your team and how you can be confident you’re complying with these employment law changes.

To gain a comprehensive understanding of workplace health and safety in Australia, you can watch our webinar.

Disclaimer: The information in this article is relevant as at 29 June 2023, and has been prepared by Employment Hero Pty Ltd ABN (11 160 047 709) (Employment Hero). The views expressed herein are general information only and are provided in good faith to assist employers and their employees. The Information is based on data supplied by third parties. While such data is believed to be accurate, it has not been independently verified and no warranties are given that it is complete, accurate, up to date or fit for the purpose for which it is required. Employment Hero does not accept responsibility for any inaccuracy in such data and is not liable for any loss or damages arising either directly or indirectly as a result of reliance on, use of or inability to use any information provided in this article.

What is a psychosocial hazard?

According to Safe Work Australia, a psychosocial hazard is anything that could cause or contribute to psychological harm in the workplace (e.g. harm someone’s mental health).

A psychosocial hazard in the workplace may be:

• High and low job demands
• Low job control
• Poor support 
• Lack of role clarity
• Poor organisational change management
• Inadequate reward and recognition
• Poor organisational justice
• Traumatic events or material
• Remote or isolated work
• Poor physical environment 
• Violence and aggression
• Bullying
• Harassment, including sexual harassment, and
• Conflict or poor workplace relationships and interactions

How do psychosocial hazards cause harm in the workplace?

Psychosocial hazards in the workplace have the potential to create stress for an employee, which can ultimately lead to physical or psychological harm.

If employees are in a period of increased stress for a substantial period of time, it can cause or contribute to harm. This increased state of stress may lead to a range of psychological conditions such as anxiety, depression, post-traumatic stress disorder, or sleep disorders, etc.

If we take a look from the physical symptoms of heightened periods of stress, these may result in musculoskeletal injuries, chronic disease or other fatigue-related injuries.

What’s more is that according to Safe Work Australia, approximately 7,984 Australians are compensated for work-related mental health conditions each year. Safe Work Australia also reported that psychological injuries usually have longer recovery times, higher costs and more time away from work than physical injuries.

By eliminating psychosocial hazards in the workplace you’re not only adhering to the law, but also contributing to a happier and healthier team.

For tips on managing stress and uncertainty, read our guide on How to Deal with Uncertainty at Work.

How can employers manage psychosocial hazards in the workplace?

Safe Work Australia suggests applying the risk management process to manage psychosocial hazards in the workplace. The same process is also suggested be used to manage physical hazards at work. However, they require support and consultation with your team beforehand and throughout the process.

As an employer, it’s your responsibility to eliminate psychosocial risks in the workplace. If you cannot eliminate the risks completely, it is your responsibility to minimise them as much as possible.

Use our Psychologically Safe Workplace Survey Template to gauge the level of psychological safety in your team and identify any potential hazards.

Step 1: Identity hazards

To understand and be aware of the psychosocial hazard at work, you must identify the risk. You can do this by:

• Talking with and listening to your employees
• Inspecting your workplace for risks and hazards
• Taking note of how your team interact with one another
• Reviewing reports and records
• Using a survey tool to gather information from your team

Step 2: Assess the risks

Once you’ve identified any potential psychosocial hazards at work, consider the implications of what would happen if your team were a part of a hazard and risk.

It’s important to be aware that some risks may be visible and well-known, whilst others are more difficult to identify and may require a formal assessment process.

Step 3: Control risks

Once you’ve identified and assessed the risks, you want to try to eliminate the risk. However, a good way to eliminate a specific psychosocial risk is to prioritise forward-planning and prevention strategies.

Step 4: Review control measures

The risk management process doesn’t end once the risk is identified and eliminated. It’s essential to continually monitor, maintain and review control measures. This will ensure that everyone keeps across processes to help reduce psychosocial hazards at work.

Supporting your team with Employment Hero’s Employee Assistance Program (EAP)

It’s estimated that untreated mental health conditions cost Australian workplaces approximately $11 billion per year. That’s why giving your employees access to an employee assistance program (EAP) is an effective initiative you can introduce to support mental wellbeing in the workplace.

An employee assistance program (EAP) is an external program that employers can provide to employees to support their mental health and wellbeing. It provides your employees and their immediate family members with access to professional counselling and support services when they need it most.

It can provide assistance to those struggling with mental health issues such as anxiety or depression in a confidential environment with a qualified professional.

Effective management of psychosocial risks can also be linked to employee performance. For insights on evaluating productivity, check out our guide on how to measure employee performance.

In times of crisis, it’s also crucial to know how to support your team effectively. Refer to our guide on Supporting Your Team Through a Natural Disaster for valuable insights.

Want to learn more about compliance in the workplace?

Australia has one of the most complex and confusing employment law systems in the world, which is why staying across updates to business compliance is so important.

Don’t let essential HR tasks slide to the bottom of your to-do list. Be proactive in the area of HR compliance and recognise HR mistakes before they become serious problems and costly legal claims.

Download our Essential HR Compliance guide here. 

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