July 12, 2024

From Risk to Resilience: A New Perspective on Managing Psychosocial Risks

In recent years, the significance of mental health in the workplace has gained widespread recognition. Psychosocial risks, which refer to the factors that can negatively impact an employee's psychological wellbeing, have become a critical area of focus for organisations. These risks encompass a range of issues, including job demands, work relationships, and organisational culture. In Australia, the legal framework now mandates that employers take proactive measures to manage these risks, ensuring a safe and healthy work environment.

This article aims to provide a comprehensive overview of psychosocial risks in the Australian workplace, with a special emphasis on early intervention. By understanding the problem, adhering to legal obligations, and implementing effective early intervention risk management strategies, organisations can foster a supportive environment that enhances employee wellbeing and productivity. This deeper dive offers an advanced perspective for those aspiring to lead in managing psychosocial hazards within their workplace.

The Growing Trend of Worsening Workplace Mental Health

The prevalence of mental health conditions among Australian workers is alarmingly high. A survey by Superfriend in 2019 revealed that 50% of the Australian workforce had experienced a mental health condition.1 More concerning is that 2 in 5 of those workers attributed their condition to their workplace, either as a direct cause or as an aggravating factor.2

According to Allianz, the number of workers' compensation primary psychological claims is increasing. The number of active claims over the last five years has increased by almost 50%. The average cost of these claims has also increased by almost 30% over the same period of time.3 These statistics reflect a growing trend of worsening workplace mental health, resulting in prolonged absences and increased claims.

Unfortunately, the financial burden on workplace productivity is also significant. Employees with mild depression cost employers an average of $2,791 per year in sickness absence and presenteeism. Those with severe depression incur costs up to $23,143 per year. Overall, the cost of depression to Australian employers is estimated to be approximately $6.3 billion per annum.4

Navigating the Legal Landscape

To address these challenges, it is essential for Work Health and Safety (WHS) and Human Resources (HR) teams to collaborate closely. Managing psychosocial risks is not just a matter of compliance but also an effective way to support staff and ensure that the workplace is not only coping, but thriving.

In Australia, managing psychosocial risks in the workplace is not just a best practice but a legal obligation under the Work Health and Safety (WHS) Act. Employers have a duty to ensure, as far as is reasonably practicable, the health and safety of their workers.5 This includes addressing both physical and psychological risks.2 Early intervention plays a crucial role in fulfilling these legal obligations by identifying and mitigating risks before they lead to serious health issues. For a detailed explanation of what "reasonably practicable" means, you can refer to the SafeWorkAustralia website.

What To Do When Not All Risks Can Be Eliminated

Identifying and managing psychosocial risks is crucial for creating a safe and healthy work environment. This involves recognising the factors that can potentially harm employees' mental health and wellbeing and taking proactive measures to mitigate them.2 Multiple control measures may be required to effectively manage psychosocial risks. The aim must be to keep trying to lower the likelihood and degree of harm until further steps are not reasonably practicable in the circumstances.

The organisation should strive to eliminate the risks that can be eliminated. However, there will always be some psychosocial risks remaining as part of the job that cannot be eliminated, such as an abusive customer, a miscommunication with a colleague, isolation from remote work, or a sudden shift in a project deadline.

The impact of these stressful events on employees can significantly vary depending on their current level of wellbeing. Therefore, it is crucial to recognise the importance finding effective ways of improving staff wellbeing and thinking about proactive risk minimisation.

How Stress Impacts Different Individuals In Your Workplace

The concept of the "Green State Individual" and "Red State Individual" highlights how different levels of personal wellbeing can influence an individual's response to stress. This framework can help organisations understand the importance of supporting employee wellbeing as a preventive measure against psychosocial risks.

Consider two hypothetical employees:

Red State Individual: This individual has poor wellbeing habits, limited sleep, poor exercise habits, and poor nutrition. They are in a red state.

Green State Individual: This individual has great wellbeing habits, 8 hours of sleep, a habit of daily exercise, and great nutrition. They are in a green state.

When faced with the same stressful event, the green state individual will likely experience less impact compared to the red state individual. This is because the green state individual has better overall resilience and coping mechanisms due to their healthy lifestyle.

Example Scenario #1: Customer Service Crisis

Scenario: A customer service representative at a call centre experiences a highly aggressive and verbally abusive call from a customer.

Red State Individual: Already struggling with poor sleep and high stress levels, the red state individual feels overwhelmed by the interaction. They become anxious, their performance declines, and they take additional sick leave due to stress.

Green State Individual: Well-rested and physically active, the green state individual remains calm and professional during the call. They use stress management techniques learned through the company's wellbeing program and recover quickly, maintaining their performance and avoiding additional stress-related absences.

Example Scenario #2: Team Conflict

Scenario: A significant disagreement arises between team members during a project meeting, leading to heightened tension and conflict.

Red State Individual: The red state individual, already feeling disconnected from the team and burdened by personal stressors, takes the conflict personally. They become withdrawn, their productivity drops, and they start to dread coming to work.

Green State Individual: With daily positive wellbeing habits building strong resilience, the green state individual approaches the conflict constructively. They help mediate the situation, foster open communication, and contribute to resolving the conflict effectively.

Example Scenario #3: Tight Deadline Pressure

Scenario: An important project deadline is moved up, requiring employees to work extra hours to meet the new timeline.

Red State Individual: The red state individual, who is already exhausted from lack of sleep and negative coping habits due to stress, struggles to keep up with the increased workload. Their stress levels spike, leading to mistakes and a decrease in overall work quality.

Green State Individual: The green state individual, with a solid foundation of healthy habits and effective time management skills, adjusts their schedule to accommodate the extra hours. They remain focused and productive, delivering high-quality work despite the tight deadline and additional pressure.

It is evident that the green state individual in each example scenario will be able to have a better response to the stressful event, minimising its impact. This highlights the importance of promoting good wellbeing habits among employees as a part of the overall strategy to manage psychosocial risks. Early intervention in promoting these habits can make a significant difference in an employee's ability to cope with significant stress.

Practical Recommendations for Managing Psychosocial Risks

To effectively manage psychosocial risks in the workplace, organisations should consider the following recommendations:

1. Proactive Risk Management: Adopt a proactive approach to risk management by continuously identifying, assessing, and mitigating psychosocial risks. Use a variety of control measures and ensure they are regularly reviewed and updated. Early intervention should be a cornerstone of this proactive approach keeping in mind the impact of stressful events on employees can significantly vary depending on their current level of wellbeing. Solely replying on employee assistance programs (EAP) and Mental Health awareness training is not sufficient as there also must be a stronger focus on prevention.

2. Comprehensive Wellbeing Program: Develop and implement comprehensive wellbeing program that promotes healthy habits such as regular exercise to manage stress, self-management practices, adequate sleep, and good nutrition helping to minimise psychosocial risk. These programs should be inclusive, accessible to all employees, measurable and tailored to meet their specific needs.

3. Supportive Work Environment: Foster a supportive work environment where employees feel as part of a team and comfortable discussing their mental wellbeing and the strategies their use to handle stress. Encourage open communication and provide resources for support when needed.

4. Regular Monitoring and Review: Establish a system for regular monitoring and review of psychosocial risk management strategies. Collect feedback from employees, track incidents, and use performance metrics to evaluate the effectiveness of interventions.

By implementing these recommendations, organisations can create a proactive, comprehensive approach to managing psychosocial risks.This not only ensures compliance with legal obligations but also promotes a healthier, more productive workforce.


Managing psychosocial risks in the workplace is a complex but essential task. By understanding the problem, adhering to legal frameworks, and proactively identifying and managing risks, organisations can create a healthier and more productive work environment. Promoting good wellbeing habits is crucial, as employees in a green state are better equipped to handle stress and minimise the impact of psychosocial risks. This is an effective way to minimise risk when the risk cannot be eliminated, meeting the legal obligations by lowering the likelihood and degree of harm until further steps are not reasonably.

Implementing a comprehensive approach to psychosocial risk management, including multiple control measures and early intervention strategies, can significantly enhance employee wellbeing and organisational resilience. This deeper dive provides new perspective and a more extensive understanding of managing psychosocial hazards, when applied positioning your organisation as a leader in the field of proactive psychosocial risk management, preparing your organisation for a resilient and a successful future.


1. Superfriend. (2019). Indicators of a Thriving Workplace Survey. Webpage Link
2. [PDF] Managing Psychosocial Hazards at Work View/Download PDF
3. Allianz, 2023. Unpacking the New Workforce Webpage Link
4. [PDF] Psychosocial Safety Climate and Better Productivity in Australian Workplaces View/Download PDF
5. Safe Work Australia, What is 'reasonably practicable' in relation to health and safety duties? Webpage Link

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