Psychosocial Hazards: What Australian Businesses Need to Know (and Do)

In recent years, mental health and wellbeing in the workplace have stepped into the spotlight — and rightly so.

But alongside the rise in awareness has come a stronger push for accountability. Across Australia, new codes of practice and WHS regulations are making it clear: employers have a legal and moral duty to address psychosocial hazards at work.

So what exactly are psychosocial hazards? Why do they matter to your team, your compliance, and your bottom line? And what practical steps can you take to reduce risk and build a healthier, safer workplace?

Let’s unpack it.

What Are Psychosocial Hazards?

Psychosocial hazards are factors in the workplace that can cause psychological harm.

Unlike physical hazards, these aren’t things you can always see or measure — but their impact is just as real.

They include things like:

• • Excessive workloads or unrealistic deadlines

  • Poor workplace relationships (e.g., bullying, harassment, conflict)

  • Lack of support or role clarity

  • Insecure work or job uncertainty

  • Trauma exposure (especially in high-risk industries)

  • Remote or isolated work

  • Lack of control over work

  • Poorly managed change or organisational restructure

Left unchecked, these stressors can lead to:

• • Burnout

  • Anxiety and depression

  • Decreased job performance

  • High turnover

  • Increased absenteeism

  • Legal risk and reputational damage

In short: psychosocial hazards affect not only the wellbeing of individuals but the sustainability of your business.

What the Law Says: Recent Changes Across Australia

Most states and territories have updated or are in the process of updating work health and safety (WHS) regulations to include psychosocial risks.

For example:

• In New South Wales, the Code of Practice for Managing Psychosocial Hazards became enforceable in 2022.

• In Victoria, WorkSafe has released guidance for employers.

• In Queensland, employers must identify, assess, and control psychosocial risks like any other workplace hazard.

• Nationally, Safe Work Australia has updated the Model WHS Laws to include psychosocial hazards.

This means businesses are now legally required to manage psychosocial hazards under the same risk management principles applied to physical safety.

Why It Matters to Your Business

Beyond compliance, managing psychosocial risks brings major business benefits.

1. Protects Your People

Your team is your greatest asset. Addressing mental health risks helps employees feel safe, supported, and empowered to thrive.

2. Strengthens Culture and Morale

A psychologically safe workplace encourages trust, teamwork, and engagement — all essential for high-performing teams.

3. Reduces Costs

Psychosocial injuries are among the most expensive claims for workers compensation — with long durations and high return-to-work challenges.

4. Boosts Productivity and Performance

When people feel mentally well and supported, they’re more focused, creative, and resilient.

5. Mitigates Legal and Reputational Risk

Being proactive protects your business from potential claims and reinforces your commitment to ethical leadership.

Common Psychosocial Hazards in Australian Workplaces

Every workplace is different, but here are some of the most frequently reported hazards across Australian industries:

These risks aren’t always obvious — and they’re not always intentional. But they do require intentional action to manage.

What Can Employers Do? Your 5-Step Action Plan

Creating a safe and mentally healthy workplace doesn’t require perfection — just a clear, consistent effort.

Here’s how to start:

1. Identify Psychosocial Hazards

Use surveys, focus groups, 1-on-1s, and incident data to gather insight.

Key questions:

• • What are the common sources of stress in the workplace?

  • Are roles, workloads, and expectations clear?

  • Do employees feel safe to speak up or raise concerns?

2. Assess the Risk

Not all hazards are equal. Consider:

• • How likely is the harm to occur?

  • How severe could the impact be?

  • Who is most at risk?

For example, a high-pressure deadline might be manageable short-term — but not if it becomes the norm.

3. Implement Controls

Based on the level of risk, introduce control measures. This could include:

• • Adjusting workloads or rosters

  • Providing clearer communication and expectations

  • Offering mental health support or EAP services

  • Providing training on conflict resolution or respectful behaviour

  • Improving change management processes

Controls should be practical, tailored, and co-designed with staff wherever possible.

4. Monitor and Review

Track what’s working — and what’s not. Use staff feedback, incident reports, and performance metrics to continually assess your approach.

Make sure leaders regularly check in with teams, especially during periods of change or pressure.

5. Build a Culture of Psychological Safety

At the heart of it all is culture. Foster an environment where:

• • It’s okay to speak up

  • Feedback is welcomed and acted on

  • Mistakes are seen as learning opportunities

  • Wellbeing is genuinely prioritised

This doesn’t happen overnight — but small, consistent actions build trust over time.

Tips for Leaders and Managers

Managers are often the first line of defence when it comes to psychosocial risks. Here’s how they can lead the way:

• • Schedule regular check-ins that focus on wellbeing, not just workload

  • Ask open-ended questions like, “How are you finding things lately?”

  • Model healthy boundaries (e.g. finishing on time, taking breaks)

  • Address issues early before they escalate

  • Promote access to support services and mental health days

  • Offer flexibility where possible — and mean it

Remember: it’s not about having all the answers — it’s about creating an environment where people feel heard, seen, and supported.

Industry Examples: Psychosocial Risks in Action

Construction & Trades:

• • Long hours, high physical demands, and tough deadlines

  • Macho culture can discourage speaking up

  • Risks: burnout, substance misuse, undiagnosed depression

Solution: Mental health toolbox talks, mental health first aid training, open-door leadership culture

Office & Admin:

• • Sedentary work, lack of variety, high KPIs

  • Poor communication between departments

  • Risks: disengagement, anxiety, isolation

Solution: Role clarity workshops, flexible work arrangements, team connection initiatives

Healthcare & Community Services:

• • Emotional labour, trauma exposure, heavy caseloads

  • Stretched staffing, lack of debrief time

  • Risks: vicarious trauma, burnout, PTSD

Solution: Structured peer support, supervision sessions, trauma-informed workplace practices

Final Thought: Mental Health Is Everyone’s Business

Psychosocial hazards aren’t just an HR issue or a box to tick for compliance — they’re at the core of how people experience their work.

And when we create environments that are psychologically safe, we don’t just prevent harm — we unlock the full potential of our people.

At Industry Partners Australia, we’re committed to helping members navigate these challenges with real-world tools, training, and peer support. Let’s work together to build safer, healthier, and more sustainable workplaces — for everyone.