The NSW Government is taking serious steps to address a growing crisis—psychosocial injuries in the workplace. With psychosocial injury claims doubling in the past six years and their costs skyrocketing, reforms are underway to modernise workplace health and safety laws and overhaul the workers’ compensation system.
Treasurer Daniel Mookhey highlighted a sobering reality: psychosocial claims now account for 12% of total claims, but 38% of the total cost, with average claim costs nearly doubling in just five years. Left unchecked, this trend is set to harm not just employees, but employers through rising premiums and disrupted workplaces.
So, what can businesses do now to prevent psychosocial injuries and protect both their people and their bottom line?
5 Practical Steps to Prevent Psychosocial Injuries in Your Workplace
1. Identify and Assess Psychosocial Hazards
Start by proactively identifying the potential psychosocial hazards in your workplace. These can include:
- Bullying and harassment
- Poor communication or lack of role clarity
- High job demands without adequate support
- Workplace conflict
- Lack of recognition or reward
Conduct surveys, anonymous feedback, and regular check-ins to uncover hidden stressors. Use risk assessments specifically designed to evaluate mental health hazards, not just physical ones.
2. Develop and Implement Clear Policies
With bullying, harassment, and psychological injuries under sharper scrutiny (as per the NSW reforms), having up-to-date, clear, and enforceable policies is non-negotiable.
Your policies should:
- Define unacceptable behaviours like bullying, discrimination, and harassment
- Set out complaint and investigation procedures
- Clarify “reasonable management action” to avoid misunderstandings
Ensure these policies are communicated widely, regularly updated, and embedded in your workplace culture.
3. Train Your Leaders and Managers
A key element of the NSW reforms is putting more emphasis on management action and their role in preventing psychological injuries. Equip your managers with training in:
- Conflict resolution
- Performance management without undue stress
- Recognising early warning signs of mental health issues
- Navigating sensitive conversations
Great leadership plays a huge role in setting the tone and ensuring reasonable, empathetic, and legally compliant management practices.
4. Foster a Psychologically Safe Culture
Psychological safety means your employees feel safe to speak up, admit mistakes, share concerns, and be themselves without fear of negative consequences.
Encourage open dialogue, provide anonymous reporting channels, celebrate positive behaviours, and visibly act on feedback. When employees feel heard and valued, stress and conflict are less likely to escalate into claims.
5. Prioritise Early Intervention and Support
If a mental health issue arises, acting early can prevent it from escalating into a workers’ compensation claim. Provide access to Employee Assistance Programs (EAP), offer flexible working arrangements where needed, and support return-to-work plans sensitively and strategically.
Monitor workloads, interpersonal relationships, and job satisfaction levels. Early and consistent intervention = better outcomes for everyone.
Ready to Build a Safer, Stronger Workplace?
At ForgeHR, we specialise in supporting businesses to stay ahead of legislative changes and build psychologically safe workplaces. Our tailored solutions include policy development, manager training, workplace audits, and strategic HR advice that protects your people and your business.
Don’t wait for rising premiums and legal battles to force action—partner with ForgeHR today and stay compliant, sustainable, and supportive.
