How Poor Workplace Mental Health Impacts Success and Safety

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How Poor Workplace Mental Health Impacts Success and Safety

Mental health shouldn’t be considered only a personal issue—it’s a workplace issue too. And a costly one at that.  Every year, 12 billion working days are lost globally due to depression and anxiety, costing businesses over $1 trillion in lost productivity (WHO, 2024). In Australia, mental health compensation claims have increased by 36.9% over the past five years, with workplace stress, bullying, and high job demands among the biggest contributors (Safe Work Australia, 2024).  Yet, despite these numbers, too many organizations still treat workplace mental health as an HR or employee wellness issue, rather than a critical business risk.  So, what’s driving this crisis—and what can businesses do about it? 

Why Poor Workplace Mental Health Is a Business Problem 

It’s easy to think of workplace mental health as something separate from safety—something that should be handled through EAPs, wellbeing programs, or HR initiatives. But when work itself is a contributing factor, these reactive approaches aren’t enough.  The reality is that work-related mental health conditions are preventable (WHO, 2024). But organizations are failing to manage psychosocial hazards—the workplace risks that contribute to poor mental health.  According to Safe Work Australia (2024), the biggest drivers of mental health claims are: 

  • Work-related harassment & bullying (32.6%) 
  • Work pressure (19.6%) 
  • Occupational violence (16.4%) 

And while these issues clearly impact employees, they also have major financial and operational consequences for businesses. 

The Cost of Ignoring Psychosocial Risks 

If an employee breaks a bone on the job, organizations react swiftly—investigating the cause, preventing recurrence, and providing support. But if an employee experiences chronic work stress, burnout, or harassment, it often goes unnoticed until it leads to absenteeism, turnover, or even a workers’ compensation claim. The costs of inaction are high: 

  • Mental health claims cost nearly 4x more than physical injury claims (Safe Work Australia, 2024) 
  • Return-to-work rates for mental health injuries are significantly lower (79.1%) compared to physical injuries (91.6%) (Safe Work Australia, 2024) 
  • Turnover increases when workplaces fail to address high job demands and stressors (Dunlop, 2023) 

On top of this, Australian regulators are cracking down on psychosocial hazards. New regulations require businesses to identify, assess, and eliminate psychosocial risks—just like any other workplace hazard (Dunlop, 2023).  This means organizations can no longer afford to ignore workplace mental health. It’s not just an HR issue—it’s a compliance issue, a financial issue, and a leadership issue. 

How Businesses Can Take Meaningful Action

1. Treat psychosocial hazards like any other workplace risk

Just like physical hazards, psychosocial risks need to be assessed, controlled, and regularly reviewed. This includes: 

  • Conducting psychosocial risk assessments 
  • Tracking incidents of bullying, harassment, and work stress 
  • Implementing higher-order controls like job design changes—not just offering EAPs (Dunlop, 2023)
2. Use data to drive decision-making

Many organizations still rely on complaints or exit interviews to flag mental health risks—but by the time these issues surface, the damage is already done. Instead, businesses need to take a proactive, data-driven approach to identifying and managing psychosocial risks. This includes tracking absenteeism trends, incident reports, workload concerns, and employee feedback in real-time. With better visibility, organizations can identify patterns early and address risks before they escalate.

3. Build leadership capability

Managers and executives play a critical role in shaping workplace mental health. They are responsible for setting expectations around workload, supporting employees during high-stress periods, and building a culture where people feel safe to speak up about challenges.  Leadership training should focus on recognizing psychosocial hazards, responding to mental health concerns, and proactively designing work to reduce unnecessary stressors. When leaders prioritize psychological safety, it has a direct impact on employee wellbeing, engagement, and retention. 

The cost of ignoring workplace mental health is too high—for employees, for businesses, and for society at large. 

With new regulations, increased regulatory scrutiny, and rising costs linked to burnout, turnover, and compensation claims, organizations must start treating psychosocial safety as a core part of their workplace safety strategy.  Because at the end of the day, a mentally healthy workplace isn’t just good for employees—it’s good for business. 

Is your organization taking a proactive approach to workplace mental health? It’s time to rethink safety.  

We’re here to help. Whether you’re navigating new psychosocial safety regulations, looking to improve workplace mental health, or need a better way to track and manage risks, HSI Donesafe provides the tools and support to make it easier. Let’s work together to create safer, healthier workplaces. 

Citations: Safe Work Australia, “Psychological Health in the Workplace Snapshot, February 2024” , Catherine Dunlop, “Psychosocial Safety: What Employers Need to Know,” December 2023 World Health Organization (WHO), “Mental Health at Work” 

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