Managing Psychosocial Risks in the Workplace:
A Guide for Australian SME's
In Australia, managing psychosocial risks in the workplace is more than just a recommendation—it’s a legal requirement. Recent updates to WHS legislation across states mandate that all employers assess and address psychosocial hazards that impact employee mental health and well-being. For small to medium business owners, this means understanding and mitigating risks such as job demands, organisational justice, and workplace relationships.
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This guide outlines the 14 psychosocial hazards specified by WHS legislation, the impacts of each, and how the STAR Workplace Program can support small to medium businesses in assessing, benchmarking, and managing these risks.
What are Psychosocial Risks, and Why Do They Matter for SME's?
Psychosocial risks are aspects of work design and management that can harm employees’ mental health if unaddressed. These risks can lead to increased turnover, reduced productivity, and serious compliance issues. For SMEs, proactively managing psychosocial risks offers multiple benefits, including improved employee retention, reduced absenteeism, and better overall organisational performance.
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Takeaway: The STAR Workplace Program provides SMEs with a data-driven approach to identify and manage these risks effectively, helping businesses maintain compliance and create healthier workplaces.
The 14 Psychosocial Hazards in WHS Legislation
Australian WHS legislation identifies 14 psychosocial hazards that employers must address. Here’s an overview of each hazard, its impacts, and practical ways to manage it.
01
Job Demands
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Description: Excessive workload, unrealistic deadlines, or high emotional demands.
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Impact: High job demands lead to stress, burnout, and disengagement.
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Solution: STAR’s data can help assess workload balance, enabling businesses to set realistic expectations and redistribute tasks as needed.
02
Job Control
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Description: Limited autonomy in task management, schedules, or decision-making.
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Impact: Low control over work can increase stress and reduce job satisfaction.
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Solution: Offer flexibility and autonomy where possible, and involve employees in decision-making processes.
03
Poor Support
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Description: Insufficient support from managers, peers, or organisational resources.
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Impact: Lack of support reduces morale, increases stress, and can lead to turnover.
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Solution: Implement regular check-ins, foster open communication, and ensure that support systems are in place and accessible.
04
Role Clarity
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Description: Ambiguity in job responsibilities or expectations.
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Impact: Role confusion increases stress, anxiety, and reduces productivity.
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Solution: Use STAR insights to ensure clear job descriptions and regular reviews of role expectations with employees.
05
Organisational Change Management
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Description: Ineffective handling of organisational changes, such as restructuring or layoffs.
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Impact: Poor change management increases employee anxiety, reduces trust, and lowers engagement.
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Solution: Implement structured change processes, including regular updates and involving employees in transition planning.
06
Reward and Recognition
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Description: Failure to recognise or reward employees’ efforts and achievements.
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Impact: Lack of recognition leads to disengagement and increases the likelihood of employees seeking work elsewhere.
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Solution: Develop regular recognition programs to celebrate employee contributions, and use STAR metrics to assess the impact on morale and retention.
07
Organisational Justice
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Description: Perceived unfairness in policies, decision-making, or disciplinary actions.
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Impact: Employees who feel that workplace justice is lacking may experience resentment, stress, and reduced engagement.
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Solution: Ensure that policies are applied consistently and fairly. STAR insights can help identify areas for improvement in organisational justice.
08
Traumatic Events or Material
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Description: Regular exposure to distressing situations, such as accidents, injuries, or sensitive content.
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Impact: Exposure to trauma can lead to anxiety, depression, and other mental health challenges.
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Solution: Provide mental health resources, offer debriefing sessions after traumatic events, and ensure employees know where to access support.
09
Remote or Isolated Work
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Description: Working alone or in isolated locations where immediate support may not be available.
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Impact: Isolation can lead to loneliness, increased stress, and heightened risk in emergencies.
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Solution: Conduct regular virtual check-ins, establish peer support networks, and provide resources to ensure remote worker safety.
10
Physical Environment
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Description: Uncomfortable or unsafe physical work conditions, such as poor lighting, noise, or inadequate facilities.
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Impact: Poor environments can cause physical discomfort, reduce concentration, and increase stress.
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Solution: Regularly assess and improve physical workplace conditions to ensure they are safe, comfortable, and conducive to productivity.
11
Workplace Violence and Aggression
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Description: Exposure to physical or verbal aggression in the workplace.
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Impact: Violence and aggression increase fear, reduce morale, and can lead to lasting psychological harm.
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Solution: Establish and enforce anti-violence policies, provide conflict resolution training, and encourage employees to report incidents.
12
Bullying
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Description: Repeated harmful or disrespectful behaviour, including intimidation or exclusion.
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Impact: Bullying damages mental health, reduces morale, and leads to high turnover.
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Solution: Implement a zero-tolerance bullying policy, provide reporting mechanisms, and conduct regular climate surveys to monitor workplace culture.
13
Harassment, including Sexual and Gender-Based Harassment
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Description: Unwanted behaviour of a sexual nature or behaviour that targets someone based on gender or other protected characteristics.
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Impact: Harassment creates a toxic work environment, increasing anxiety and reducing productivity.
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Solution: Enforce anti-harassment policies, provide training, and make reporting processes accessible and anonymous.
14
Conflict or Poor Workplace Relationships and Interactions
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Description: Frequent conflicts or negative interactions between colleagues or supervisors.
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Impact: Conflict creates a hostile work environment, increasing stress and decreasing teamwork.
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Solution: Encourage open communication, offer conflict resolution resources, and foster a supportive, inclusive workplace culture.
Taking Proactive Steps to Manage Psychosocial Risk with STAR
Effective psychosocial risk management requires ongoing effort and regular evaluation. Here’s how business owners can use STAR to take proactive steps:
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Register for a Psychosocial Risk Assessment:
Begin with STAR’s assessment to identify and understand psychosocial risk factors in your workplace.
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Review Benchmarks
Use STAR’s benchmarking data to set realistic improvement goals based on industry comparisons.
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Implement Actionable Plans
Address key risks, such as role clarity or conflict management, by implementing targeted changes.
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Monitor and Adjust
Review your psychosocial risk metrics on an annual basis to ensure improvements are effective and sustained.
For Australian SMEs, managing psychosocial risks is crucial for compliance, employee well-being, and organisational success. Addressing these hazards not only ensures compliance with WHS legislation but also fosters a supportive, high-performing workplace that attracts and retains talent. The STAR Workplace Program provides the tools, insights, and benchmarking capabilities needed to create a proactive, resilient workplace.
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What is the difference between an employee engagement survey and employee satisfaction survey?Employee satisfaction surveys report on the satisfaction of employees - and nothing else, regardless on if it impacts the business. Employee engagement and alignment surveys have employee satisfaction as a metric in the analysis, but don't rely solely on satisfaction. Employee engagement surveys should measure employee culture, management culture, employee satisfaction, company performance, employer satisfaction and psychosocial risk.
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What is the difference between an employee engagement survey and a culture survey?Culture surveys only look at pre-determined culture markers for your business. Sometimes these are unique to your business, but usually they are a mixture of the 10 key culture drivers of Australian businesses. Engagement and alignment surveys look at the entire business performance and give you a rating on employee satisfaction, employee and management culture, employer satisfaction and psychosocial risk.
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How much work will I have to do?STAR Workplace is 100% managed and facilitated by expert consultants. You don't have to interview your team, send out survey links, analyse the data. All you have to do is contribute to the data collection, using our proprietary Employer assessment and Company Performance assessment. Then sit back and wait for the results to be analysed and presented back to you. Over a 6 week program, you might have to invest 6 hours of your time in total, including having the results presented to you.
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How often should you survey your team?Once a year. Any more than that and your business doesn't have time to make changes and for the changes to set in. Surveying your team also takes them away from doing their job, and can create survey overload - where employees become less engaged because nothing has changed since they last provided feedback.
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What is psychosocial risk?Psychosocial risk refers to the potential harm to employees' mental health and wellbeing caused by workplace factors such as excessive job demands, poor workplace relationships, or lack of support. For Australian business owners, understanding and managing psychosocial risks is now a legal requirement under WHS laws and directly impacts your bottom line through productivity, retention, and compliance costs. Key workplace factors that create psychosocial risks include: High workload or job demands Low job control Poor support from supervisors Workplace conflict or poor relationships Lack of role clarity Poor organizational change management Job insecurity Work-related violence and aggression The Business Impact: Increased absenteeism and sick leave Higher staff turnover Reduced productivity Legal and compliance risks Workers' compensation claims Damage to company reputation
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Why is benchmarking important?Benchmarking in employee engagement surveys is crucial for Australian businesses because it transforms raw survey data into actionable business intelligence. Without benchmarking, you're essentially operating in the dark – you might know your engagement score is 70%, but you won't know if that's cause for celebration or concern. Key Benefits of Benchmarking: 1. Performance Context Compare your engagement levels against similar Australian businesses Understand if your employee experience is helping or hurting your competitive advantage Identify whether your HR investments are paying off relative to industry standards 2. ROI Validation Justify your investment in employee engagement initiatives Identify which areas need immediate attention to prevent costly turnover Prioritize improvements based on where you fall significantly below benchmarks 3. Strategic Planning Set realistic improvement targets based on industry standards Focus resources on areas where you lag behind competitors Track year-over-year progress against both internal and external benchmarks 4.Risk Management Identify engagement scores that could signal compliance risks Spot potential turnover risks before they impact your bottom line Compare your results against Australian workplace standards What Good Benchmarking Looks Like: Industry-specific comparisons Size-appropriate business comparisons Local market context Regular updates to reflect current market conditions
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Is this an ongoing subscription?No. You only pay for the work that gets completed with no lock in obligations. Businesses typically complete the STAR Workplace assessment and action plan with their HR Coach. From there, they decide on what they need to focus on, what the budget for these actions are, and who will do it (either internally, externally, or a mixture of both).
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What do I get out of it?All businesses, regardless of size receive: ​ The entire process facilitated by a Licensed HR Coach, so you can focus on running your business STAR Workplace Report - including all analysed data and benchmarked against 900+ Australasian businesses Qualitative Report - including all data from participants, broken down by question to protect the anonymity of the participants and gain the most value for the business. Team Dashboard - to share your results with all the members of your team HR Dashboard - to share HR-specific data with your HR team to start actioning change Psychosocial Risk Report - your data points mapped against the Psychosocial Risk Factors Industry Benchmark Report - your data directly compared with other businesses in your industry Certificate - to share with your network, highlighting your business's success and help attract new employees and customers
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Who does all the work?Your HR Coach facilitates the entire process from start to finish. You will be asked to provide input during the Employer Assessment and your team will provide anonymous input using our built for purpose survey platform. Once the results are known and presented back to you, you decide on what you want to focus on, the budget and who is responsible.
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Can I ask my employees questions specific to my businessYes. Our platform allows up to 10 free text questions to be asked of your team, in addition to the benchmarked questions. These questions allow participants to respond using a rating scale or free text.
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Is the survey anonymous?100%. We've built the platform to provide participants with 100% anonymity to ensure we get the most reliable results possible. We know if participants have completed their survey or not - but that is the extent of it. As soon as they complete their survey, all emails and names are scrubbed from the data to protect their anonymity.