What is Psychosocial Risk Management?

A leader implementing psychosocial risk management

Psychosocial Risk Management

Risk Management is a structured approach to identifying, assessing, and managing work-related factors that can cause psychological or social harm to workers. These factors relate to how work is designed, organised, managed, and experienced.

As workplaces become more complex, fast-paced, and people-dependent, psychosocial risks are now recognised as a core work health and safety issue, not a personal resilience problem.

What are psychosocial hazards?

Psychosocial risks are aspects of work that have the potential to contribute to stress, burnout, psychological injury, or other health impacts.

Common psychosocial risks include:

  • High or sustained job demands
  • Low role clarity or conflicting expectations
  • Poor support from leaders or colleagues
  • Lack of control or autonomy
  • Exposure to conflict, bullying, or harassment
  • Inadequate reward or recognition
  • Organisational change that is poorly communicated or managed
  • Isolated or remote work

These risks do not affect everyone in the same way, but when they are present at a systemic level, harm becomes more likely across teams and over time.

What is psychosocial harm?

Psychosocial harm refers to the actual negative impact these risks have on people. This may include:

  • Chronic stress or exhaustion
  • Anxiety or low mood
  • Reduced cognitive capacity (concentration, decision-making)
  • Sleep disturbance
  • Burnout
  • Psychological injury

Importantly, psychosocial risk management focuses on preventing harm, not diagnosing or treating individuals. It looks at the work system first.

What does psychosocial risk management involve?

Management follows the same principles as managing physical safety risks, but applied to psychosocial hazards.

It typically involves:

1. Identifying psychosocial hazards

Understanding which aspects of work may be causing harm. This may include:

  • Worker surveys or pulse checks
  • Consultation and focus groups
  • Incident and injury data
  • Absenteeism, turnover, or performance trends

The goal is to identify patterns, not single complaints.

2. Assessing risk

Assessing psychosocial risk means understanding:

  • Who is being affected
  • How severe the harm is
  • Which work factors are contributing most

Effective psychosocial risk assessment looks at the interrelated and cumulative nature of harm.

3. Implementing control measures

Controls should focus on changing the work, not fixing the worker.

Examples include:

  • Redesigning workloads or job roles
  • Improving role clarity and decision authority
  • Strengthening leadership capability
  • Improving communication and consultation
  • Adjusting staffing, rostering, or work systems

Training and individual support are important, but they are supporting controls, not substitutes for system change.

4. Monitoring and review

Psychosocial risks change over time. Ongoing monitoring ensures that:

  • Controls are working as intended
  • New risks are identified early
  • Improvements are sustained

Why is psychosocial risk management important?

Psychosocial risk management is important because unmanaged psychosocial risks can lead to:

  • Increased psychological injuries
  • Reduced productivity and engagement
  • Higher absenteeism and turnover
  • Poor safety outcomes
  • Legal and regulatory exposure

From a regulatory perspective, employers have a duty of care to manage psychosocial risks so far as is reasonably practicable, just like physical risks.

From a business perspective, effective psychosocial risk management supports:

  • Sustainable performance
  • Healthier teams
  • Better decision-making
  • Stronger organisational culture

Management is not about individual weakness

A common misconception is that psychosocial risk management is about resilience training or stress management for individuals.

In reality, it is about:

Designing work in a way that supports psychological health and reduces harm.

While individual support services are important, they do not address the root causes of psychosocial harm if the work system remains unchanged.

A systems-based approach

Effective psychosocial risk management takes a systems approach. This means:

  • Looking across teams, roles, and functions
  • Understanding how different work factors interact
  • Focusing on the conditions that shape behaviour and experience

Rather than reacting to single incidents, organisations that manage psychosocial risks well focus on continual improvement.

In summary

Psychosocial Risk Management is the proactive, structured management of work-related factors that can impact psychological health.

It involves identifying psychosocial hazards, assessing risk based on actual harm, implementing system-level controls, and reviewing outcomes over time.

Done well, psychosocial risk management protects workers, supports leaders, and creates healthier, more sustainable organisations.

For organisations looking to meet regulatory expectations and genuinely improve wellbeing, psychosocial risk management is essential to long term business success.