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Why are so many workplaces suddenly talking about psychosocial (social and emotional) hazards? And is this something you should be incorporating into your workplace well-being strategy or a passing fad that you can ignore or leave to somebody else to address?
The truth is that while the new international workplace health and safety code created by 74 different countries – ISO 45003 – has been driving a lot of the recent changes, the need to minimize psychosocial hazards has been building in workplaces for some time. Over the past 25 years, technological, societal, economic, environmental, and political changes have made the work many of us are doing more complex and dynamic, and this has often added to our stress levels. For example, in Australia between 2014 and 2018, there was a 53% increase in psychosocial injury claims. In contrast, physical injury claims grew by only 3.5% during the same period. This was before any of us had heard the word “COVID-19.”
With the average psychosocial injury in Australia costing approximately $85,000 per person and requiring 175 days off work, protecting our teams from psychosocial risks is not just a legal compliance issue, it is a business imperative. For example, studies have found that work-related stress and burnout can lead to:
- Lower levels of engagement: Gallup estimate disengaged staff cost $3,400 out of every $10,000 in salary they are paid.
- Increased absenteeism: Physical symptoms such as headaches, muscle pain, and fatigue, and psychological symptoms such as depression and anxiety make people 63% more likely to take sick days.
- Increased compensation claims and medical expenses: A Stanford Graduate School of Business study found that workplace stress in America contributes to at least 120,000 deaths each year and accounts for up to $190 billion in health care costs.
- Decreased productivity: Researchers have found high levels of stress can temporarily impair strategic thinking, dull creative abilities, and make it hard to focus and complete tasks. It can also lead to an increase in mistakes, errors, and accidents. One study in 2017, of over 17,000 employees across 19 industries, suggested stress costs U.S. employers an estimated $500 billion dollars in lost productivity annually.
- Lower levels of customer satisfaction: When people experience higher levels of job stress and emotional exhaustion, studies have found they are more likely to engage in negative behaviors towards customers, such as being rude or dismissive, leaving customers more likely to have negative perceptions of the business and less likely to make repeat purchases.
- Increased turnover: People are nearly three times as likely to leave their jobs, which results in additional costs for recruiting and training new employees.
- Litigation: Legal fees, expert witness fees, discovery costs, and potential settlement or judgment costs can make the litigation of psychosocial hazards incredibly expensive. For example, an American federal jury awarded $168 million in damages to a former employee of a healthcare provider who alleged that she was subjected to severe and pervasive sexual harassment and discrimination on the job.
- Reputational damage: Workplaces that are seen as unresponsive or unwilling to address psychosocial hazards can suffer significant damage to their reputation and brand if these issues become public. For example, Uber’s poor handling of sexual harassment and work design complaints have led to widespread media and social media criticism, 200,000 customers deleting their Uber accounts, large numbers of employee resignations, legal class actions, government investigations, and a lack of stock market confidence.
(You can download a free poster of this psychosocial safety business here).
To put these very real business challenges into perspective, researchers estimate that burnout costs U.S. employers around $300 billion each year. And preliminary research shows that Australian businesses lose over $6.5 billion each year by failing to provide early intervention/treatment for their employees.
Psychosocial injuries have been found to be related to increased work-family conflict, family breakdown, suicide, abuse of medications, and healthcare costs. In 2008, the annual cost to society (including the cost of mental health care, social service costs, and other costs) of work-related stress and stress-related illness in Canada was estimated to be $2.75 billion for a low prevalence of stress, and $8.25 billion for higher estimated prevalence.
So, what is your workplace well-being strategy doing to minimize the psychosocial risks your people may be experiencing as they go about their jobs?
