Setting up for success: how to avoid psychosocial risk management traps

The complex landscape of psychosocial risk management in Australia and New Zealand: Protect both your employees and your reputation by understanding the pitfalls commonly faced by organisations seeking to manage their psychosocial hazards.

In brief

• With psychosocial risk legislation and guidance now in full force in Australia and New Zealand, organisations are grappling with the challenges of practically applying psychosocial risk management guidance.
• Organisations that are at the stage of diving deep into understanding their psychosocial hazards are experiencing challenges in applying traditional safety principles to an emerging and rapidly evolving risk.
• Organisations can set themselves up for success by being aware of the common pitfalls associated with understanding psychosocial risk and working proactively to address them from the outset.

Following the focus of regulators on managing psychosocial risk as well as the ethical obligations of organisations to better support their people, the last few years have seen a significant increase in organisations taking a step back to understand what psychosocial hazards their employees are exposed to and what they can do to manage these. But with varied guidance available from across Australia and New Zealand, assessing psychosocial hazards is nuanced and comes with complexity. Our experience in working with organisations across Oceania has shown us some of the most common pitfalls organisations face when seeking to understand their psychosocial hazards and how to avoid them.

• Pitfall 1: Approaching psychosocial risk like traditional health and safety risk
• Pitfall 2: Reflecting on data sources and inputs – limited data sources will result in a limited view of psychosocial hazards
• Pitfall 3: Not using systems thinking to identify and assess risks

Pitfall 1: Approaching psychosocial risk like traditional health and safety risk

Psychosocial risks involve the interplay of complex factors unique to each individual and their work environment. These factors include an individual's personal characteristics, work demands, relationships at work and preferences relating to work-life balance, job control, and organisational culture, among others. These hazards do not always follow a predictable relationship between cause and effect, as traditional or linear risks often do, making psychosocial risks challenging to assess and even more challenging to manage.

Solution 1: Understand the unique complexity of psychosocial risk

It’s important to be aware that psychosocial hazards can occur in combination with one another or impact physical safety hazards. Some hazards may not lead to psychological harm on their own but may do so if combined with other hazards. For example:

• When workloads are high, psychosocial risk may increase if workers cannot take breaks or if they’re working in isolation.
• Exposure to a psychosocial hazard (such as high periods of vigilance, interpersonal conflict or even hot work conditions) can increase the risk of a physical hazard through stress, fatigue, and distraction.

Existing risk models (i.e., consequence versus likelihood matrices) and infrastructure (i.e., static risk registers) are limited in adequately addressing this complexity. Therefore, assessing psychosocial risks requires new frameworks that consider multiple variables and their interactions, rather than simply attempting to assess individual hazards in isolation.

Organisations need to understand the following to fully assess the impact of psychosocial hazards on their people and design targeted strategies to prevent psychosocial hazards from impacting their workforce.

Pitfall 2: Reflecting on data sources and inputs – limited data sources will result in a limited view of psychosocial hazards

Often when seeking to understand the frequency, likelihood, and interaction of psychosocial hazards within their workforce, organisations turn to traditional sources of data such as people surveys, or hazards and incident reporting. However, critical evaluation of this data is required to ensure organisations are gaining insight into the full picture of psychosocial risk. By asking the right questions in terms of whether existing data sets provide insights relating to severity, frequency, and duration of exposure, organisations can gain a comprehensive understanding of the hazards and risks present, which can be more effective than relying solely on traditional mechanisms.

Solution 2: Evaluate the scope of your data sources

To address this, organisations need to critically examine their data sources to ensure they are capturing the full range of psychosocial hazards and begin to shift the focus away from solely outputs to include outcomes. This might involve considering alternative sources of information, ensuring that the severity, frequency, and duration of exposure to psychosocial risks are captured within this. Consider applying the following questions to traditional data sets:

• Employee surveys and feedback: What is the scope of information collected through this survey? Does it enable the organisation to assess risk to different cohorts of employees?
• Utilisation rates of employee support programs: What data is your EAP provider able to supply? Do you receive service satisfaction or presentation data as well as traditional metrics such as utilisation and presenting issues?
• Hazard and incident reporting: Are instances of work-related stress underreported in your reporting system? Can this data be relied upon for an accurate picture of frequency? Is the data collected specific enough?
• Conflict and bullying data: Have you considered alternative sources of data such as those collected through independent bullying and harassment channels? How are you maintaining confidentiality requirements?

More information on the importance of using data to measure impactful change can be found in an EY thought leadership ‘Courage under fire - How do we transform health, safety and wellbeing during tough times?’.

Pitfall 3: Not using systems thinking to identify and assess risks

As outlined above, in seeking to understand their psychosocial hazards, often organisations rely on traditional mechanisms to identify and assess risks (such as survey and incident reporting data). While this certainly provides perspective, an additional challenge with this is that the way people interact with their work is not always clearly taken into account.

To consider a systems thinking approach to understanding psychosocial risk, we can think of work like a well-oiled machine. In a machine, each part has a specific function, whether it's a gear, a lever, or a pulley. These parts don't operate in isolation; instead, they work together to make the machine function as a whole. If one part is not working properly, it can affect the entire machine's operation. Similarly, a work system consists of different elements such as people, tasks, processes, equipment, and the working environment. By not considering all aspects of the system, organisations are at risk of missing a significant part of the overarching psychosocial risk management machinery.

Solution 3: Embed systems thinking into the core of your psychosocial risk management approach

Taking a systems thinking approach will support organisations in understanding the dynamic relationship between different parts of the work system, and how these might work together to create psychosocial hazards and risks as well as to impact the effectiveness of controls. Applying systems thinking in assessing psychosocial hazards has the following benefits:

• Identifying root causes: Systems thinking can aid in uncovering the root causes of psychosocial risks, revealing structural issues within the organisation that may be contributing to stress, conflict, and poor mental health.
• Prevention over mitigation: Systems thinking leads to a more proactive approach, helping to anticipate and prevent psychosocial risks rather than just resolve them. It helps to identify potential hazards before they become serious psychosocial risks.
• Focusing on the big picture: Systems thinking avoids blaming individuals and focuses on the organisational structure, procedures, and culture that contribute to psychosocial risks. By focusing on the bigger picture, long-term and robust solutions can be developed.