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There has been significant effort in educating CEOs and executives on psychosocial risks and hazards following recent legislative changes. Can you walk us through the key aspects of these changes and what leaders need to know?

Leaders need to know the liability that’s upon the directors and office holders of their organisations. Even where to place psychosocial safety is a very interesting conversation. They need to know what the definitions of the updated psychosocial hazards are and how they are different to psychosocial safety risks. Once they have this understanding, they need to know how to proactively manage them whilst leading their organisations. 

Some of the hazards are quite surprising. For instance, inadequate change management. It’s hard to do a major change without somebody feeling there’s something wrong with the change management process. It used to be a luxury to have people dedicated to change management on major projects. It’s not to say you have to have people dedicated to change management for instance in smaller organisations, but you certainly have to have a thorough and comprehensive approach to managing significant change. It’s harder nowadays because not all change is planned change. Some of this change is unplanned change, and not all change management approaches and methodologies adapt as readily to unplanned change as they do to planned change.  

With other psychosocial risks such as workplace behaviour and organisational justice, there is quite some education to get your head around, and that doesn’t mean that measuring these risks in isolation is the most proactive way to go, or the most useful way to approach this, either. 

 

Why do organisations see psychosocial safety as a compliance burden rather than a strategic opportunity?

It’s understandable to see this merely as a compliance factor because it literally is now a regulated compliance requirement. Why is it easy to see it as a burden, not just a compliance requirement? Because there are a lot of compliance requirements for organisations, and not all of it makes obvious business sense. Of course, well-intended leaders want people to feel safe and sound in the work environment. Would they have spanned it out to all of the psychosocial identified risks? No, not necessarily. It can feel burdensome, and it is possible for it to be taken out of context and used against leaders. It can feel like, “Now we have to have checks and balances on all these additional factors. Maybe we already have a healthy culture. This could make us look like we’re suddenly exposed.” It is perceived as a burden because of the ‘overwhelm’ factor, the span of the legislation, and the number of identified psychosocial hazards. 

Does it have to be a compliance burden? Not at all. Instead of focusing narrowly on individual hazards, take a broader view by connecting them to what we call leading indicators – factors like leadership quality and effectiveness, and larger behavioural patterns known as organisational system dynamics. This approach gives you access to meaningful, predictive data – not just standard engagement survey results. It’s about using a systemic lens, which means looking at upstream data that can forecast future wellbeing and performance, rather than just tracking downstream outcomes after the fact. 

 

How can leaders shift their mindset to view psychosocial risk as a driver of business value?

There are three parts. There’s not just looking at it in terms of staff wellbeing, but looking at it in terms of staff wellbeing and staff performance. If those two lenses come together, then you really are tapping into how sustainable is the productivity of your organisation and how strong are you when it comes to the headwinds of unplanned change. This is meaningful. This is predictive information that you can use to direct future decisions in your organisation. Another element here is sustainability. Leadership is also vital here. We are not just talking about how individuals are faring, which while useful is essentially a downstream measure. We’re actually talking about upstream system-wide indicators of how strong is your organisation and are your leaders currently making it stronger, or taking it in the opposite direction and negatively impacting healthy dynamics. 

 

Can you share an example of a company that’s successfully turned psychosocial risk management into a strategic opportunity?

An aged care client approached this very proactively rather than reactively. They researched the tool that they wanted to apply, and they entered into an education process with the board and the executive team together, which was really helpful because we had board directors that were potentially exposed, and we had executive leaders as well as board directors that needed to learn and understand what were these updated compliance requirements, what does the legislation mean, and where is the government at when it comes to enforcing this legislation, such as unplanned audits. 

This organisation went through a thorough educational process. They took the time prior to gathering the data to have the necessary conversation of what they were expecting to find. Where they felt the exposure points might lie. That’s a wonderful way to do it because then you’re bringing together warm data with cold data, the dialogue with the specific measurements to give some rock-solid indication of where they needed to focus their attention and where they needed to build upon their current strengths. Now, they had a lot of current strengths, which was a very fortunate thing. Meaning they can come out of the process with three initiatives and focus areas. They were able to act upon that with the available capacity that they had, without it becoming a burden. 

 

How can organisations measure the impact of taking a strategic approach to psychosocial risk?

The first thing to say is it’s not a one-off measure. The first data gathering exercise that you’ll go through gives you the baseline, but it’s really important off the back of gathering that information, putting that picture of a baseline together, that you then consider how you want to shift the dial on these measures and make sure that you have an inspiring vision and direction for where you can take this. How can you become more of a magnetic employer for future talented people that you want to attract to your organisation? How can you increase your confidence that your clients and your customers are going to be looked after by your “well-looked-after” people, and the list goes on. It’s important to measure and remeasure over time. It’s also very important not to just measure downstream factors, but to measure upstream factors as well. We want to get an understanding of people’s impact on the system as well as the system’s impact on people. 

When you take a strategic approach, you are looking for upstream changes that can have a broad impact on a range of current or future downstream psychosocial risks. You are looking for, ideally, a few changes that are going to shift the dial positively on all your psychosocial risks. One might just be strengthening your leadership. Another one might be reconnecting your organisation so it’s less fractured and siloed and there’s less confusion and competing demands on your people. These upstream changes have the potential to address a raft of psychosocial hazards in a singular focus. 

 

How do you see the future of psychosocial risk management involving in the business landscape?

I think it will evolve over time. There’s still a lot of reactive, “Quickly, let’s measure these risk factors and tick boxing exercises.” We are encouraging leaders to take a more strategic approach. The more evidence that we gather for the value of that strategic approach, the more leaders will be compelled to zoom out and not just zoom in, to go looking for where the system needs attention and not just where the people need support. 

“Don’t fix the people, fix the system.”