By

Gaby Grammeno

Contributor

Work-related psychological hazards and the mental health conditions they cause are costing business more than four times as much in lost time and compensation as other WHS issues, a report has found.

Safe Work Australia has produced a comprehensive report on psychological health and safety in the workplace in order for its high-quality data to inform the policies and programs of WHS regulators and all workplace stakeholders.

Mental health conditions – commonly anxiety and stress disorders – account for a growing proportion of serious workers’ comp claims and have been the focus of recent attention as new regulations and codes of practice dealing with workplace psychosocial risks have come into effect around the country.

The 32-page report sets out data from three main sources to shed light on the characteristics and trends in workers’ experience of psychosocial hazards and mental health conditions in Australian workplaces. In addition to the National Dataset for Compensation-based Statistics, the report draws on data from the People at Work (PAW) survey and the National Return to Work (NRTW) survey.

Each of these datasets examines the impact of exposure to psychosocial hazards at work in different ways, and in different subsets of the Australian population, so in combination, the data enable unique insights to be identified and explored.

Psychological hazards

‘Psychological hazards’ refer to aspects of the work environment and the way work is organised that can raise the risk of mental health conditions and/or physical injury or illness. The term ‘psychosocial hazards’ is used in many cases, acknowledging that social interactions such as harassment and bullying can have a huge psychological impact on an individual.

If such hazards are not effectively managed, they can trigger mental health conditions such as anxiety and depression in individuals. They can also reduce an organisation’s productivity, with higher rates of absenteeism, presenteeism (individuals not functioning properly on the job) and staff turnover.

Work-related harassment, bullying, pressure and exposure to workplace violence are the most common causes of mental health conditions triggering serious workers compensation claims, according to the report. Work pressure was considered a factor in around a quarter of serious claims; more than a quarter were attributed to work-related harassment and/or workplace bullying; and about one in six cases were blamed on exposure to workplace or occupational violence.

Industries and occupations most at risk

Health care and social assistance workers had the highest number of serious claims for work-related mental health conditions over the last five years, in comparison with other sectors of the workforce. PAW survey data showed that these workers were exposed to psychological hazards such as high emotional demand, workplace bullying and work-related occupational violence. A quarter of the serious claims for this group related to bullying and harassment.

Occupations including community and personal services workers, professionals and clerical and administrative workers accounted for the highest proportion of workers compensation claims for mental health conditions.

A higher than average number of PAW respondents in the retail industry also suffered from high or very high levels of psychological distress.

Gender was also a factor in making individuals more vulnerable to psychological hazards, with more than half of the serious claims (57.8%) made by women. This was thought to be partly because almost four out of five health care and social assistance workers and seven out of ten community and personal services workers are female, but also because women workers were disproportionately exposed to work-related bullying, harassment, and occupational violence.

The costs

Mental health conditions can often be devastating for the individuals affected by them. A review of compensation cases shows that it’s not uncommon for the impact to be so significant that the person is rendered totally incapacitated for work.

The financial cost for workplaces is also heavy – in 2020-21, the median time lost for mental health conditions was 34.2 working weeks per serious claim, compared to 8 working weeks per serious claim across all injuries and diseases. This amounts to a significant loss of productivity. 

Over the same period, the median compensation paid for mental health conditions was $58,615 per serious claim, compared to $15,743 per serious claim for all injuries and diseases. While some may see this as ‘the insurer’s problem’, such costs are ultimately built into the workers comp premiums paid by employers.

What it means for employers

Psychological hazards may be invisible, but they’re real, and they can do real damage to people, productivity, and profits. Taking steps to prevent or minimise them is therefore good for business and the bottom line.

Read the report

Psychological health and safety in the workplace February 2024