Psychosocial Safety Climate or PSC is “the shared belief held by workers that their psychological safety and well-being is protected and supported by senior management.

A recent report published by Safework Australia, highlights the importance of PSC and the impact it can have on your company’s bottom line.  The report explores Australia’s current decline in productivity, and statistics show that, following a boom in productivity growth in the early 90’s, progress has stalled in the last 10 years.

The Productivity Commission has red flagged poor productivity and made it a priority. Improving productivity creates the model situation where one has increased outputs (i.e. goods and services) without the need for additional inputs (e.g., labour, capital).

Loss of productivity occurs when workers are absent or when they are at work but not performing at their usual capacity (presenteeism). A key point is that, poor employee psychological health leads to reduced productivity.

The cost of untreated psychological health problems in Australian organisations is approximately $10.9 billion per year, due to absenteeism, presenteeism and workers’ compensation.

Psychologically healthy workplaces on the other hand have shown to achieve higher Return on Investment (ROI) of $2.30 for every $1 spent on improving individual skills and resilience.  i.e. For every dollar spend on successfully implementing an appropriate action, there is, on average, $2.30 to be gained, according to a report by Price Water House Coopers.

The study published by WorkSafe Australia found that:

1. Low or poor PSC in the workplace is related to higher absenteeism and presenteeism. Workers take 43 percent more sick leave per month and have a 72 percent higher performance loss at work. They cost an average of $1887 more per year than those in environments where there is a positive PSC.
2. Depression is related to higher absence due to illness and poor performance. Those with severe depression take 20 times more sick days and had 270 percent higher performance loss, than those without depression. The total cost of depression to Australian employers is estimated to be approximately $6.3 billion per annum.
3. Psychological distress is related to higher absenteeism and presenteeism, resulting in four times more employee sick leave; 154 percent higher performance loss at work and cost an average of $6309 per year (for mild to severe psychological distress) more than those without psychological distress.
4. In contrast, higher engagement with employees is related to lower sickness absence and presenteeism. Employees in companies with poor PSC, were taking 12 percent more sick days than those with a positive PSC. Also, the average performance loss for those with low engagement was 8.1 percent, costing an average of $4594 per year. Conversely, those with high engagement had no measurable performance loss. The total cost of low employee engagement to Australian employers is estimated to be approximately $5.4 billion per annum.

See: Presenteeism at Workplace: Why Do Employees Go to Work When Sick?

The results of this study demonstrate that there is bottom line motivation to address psychosocial hazards in the Workplace and take action to improve employee mental wellbeing. This can be done by:

• Consultation with all key stakeholders to understand the specific psychosocial issues in the workplace and how best to mitigate them

Employers should monitor the company’s PSC and psychosocial risk levels. Employee involvement at all levels should be encouraged to monitor, establish controls, raise awareness and participate in education and training. Job structuring should be revised to minimise work conditions that influence poor psychological health, such as excessive demands and work pressure and insufficient support, control and power.

• Suggested controls include leadership commitment to a mentally healthy workplace, policies and procedures for the prevention of unreasonable behaviours such as bullying, aggression or violence, managing work-related fatigue and a process for consultation with workers.
• At an organisational level, possible controls may include designing safe systems of work, workforce planning to ensure the balance between work demands and time pressures, role clarity, independence, recognition and reward and flexible work arrangements. Organisational KPI’s could include PSC.

Employers are legally required to manage mental wellbeing in the workplace and workers are also required to take reasonable care for their own health and safety.  Employers are required to meet certain standards for the physical safety of their workplace.

A very recent survey of 1126 Australian workers revealed that over nine out of ten Australian workers consider it is important, to safeguard psychological health in the workplace, yet approximately half the workers surveyed believed that their workplace is not mentally healthy.

Also read: Wellbeing will be the Key Driver of Workplace Culture and Employee Engagement in 2017