A $9 trillion deficit or an $12 trillion payoff: the choice is organizations’ to make. 

In 2025, burnout and psychological injury are costing organizations more than just money.  They’re wasting time, damaging reputations, compromising legacies, and, most of all, costing employers their people.  

The data is unequivocal. Psychological distress in the workplace is directly tied to: 

• Poor performance 
• Low morale 
• Greater conflict 
• Higher turnover 
• Stifled innovation 
• Reduced engagement 

Yet despite this, many organizations are scaling back wellbeing and adjacent programs—believing the short-term savings will somehow outweigh the costs of the very problems such programs are designed to address.  

But mental wellbeing is not just some fad. And burnout is not some passing inconvenience. It is a warning sign—a clear indication that the systems in place are no longer working; that employees are not being adequately supported.  

To move forward, organizations must embrace a new standard of care—one that embeds psychological safety and wellbeing into the fabric of workplace health and safety. This goes beyond offering  counseling or mental health training. It requires deliberate, systemic attention to psychological safety—the oft-forgotten yet no less vital component of a truly safe workplace.  

Reframing Health and Safety for the Modern Workplace 

All too often, occupational health and safety is thought of only in terms of hard hats, hazard signage, and accident prevention. While protecting employees from physical harm is important, it’s only part of the picture. In today’s workplace—marked by rapid change, mounting pressure, and blurred boundaries between work and life—psychosocial risks can be just as injurious, and just as crucial to address, as physical risks. 

“Psychosocial hazards like excessive workloads, toxic dynamics, poor communication, and a lack of support are not merely cultural issues; they are core health and safety issues,” says Oliver Brecht, VP and General Manager of Enterprise Solutions at Workplace Options (WPO). “Left unaddressed, they can lead to burnout, anxiety, depression, and even long-term physical illness. They can undermine team cohesion, fracture trust, and silently erode the wellbeing of an entire organization.” 

The dangers don’t end there. When psychological safety is absent and psychosocial risks abound, conflict escalates, mistakes multiply, and the risk of injury—both physical and psychological—soars. A staggering 84 percent of employees report experiencing at least one mental health challenge due to workplace conditions, research shows, while nearly half would grade their employers’ commitment to mental health a ‘C’ or worse in the absence of psychological safety and psychosocial risk management. 

Findings from the 2025 WPO Psychological Safety Study further reveal the cost of inaction. As global pressures mount—from rising employee stress to deepening political tensions—organizations are seeing more dysfunction, more disconnection, and more burnout. 

“Our study is a wake-up call,” says Dr. Kennette Thigpen Harris, LCSW. If organizations do not prioritize psychological safety now, the next generation will inherit a workforce defined by stress, conflict, and disengagement.” 

Why Psychological Safety is Crucial 

Psychological safety isn’t just a feel-good buzzword—it’s a measurable driver of health, wellbeing, safety, and performance. 73 percent of employees who perceive their workplace as psychologically safe report improved mental wellbeing; 75 percent report enhanced morale. Meanwhile, organizations that prioritize inclusive leadership and psychological safety see significant gains in engagement (+64 percent) and innovation (+22 percent).  

The connection is clear: when employees feel psychologically safe, they bring their best selves to work. This not only results in better performance metrics for employers, but creates better, safer conditions for employees. When people feel empowered to show up authentically—bringing their truest, highest selves to work—they leave their exhausted, irritable, inattentive, apathetic, and accident-prone selves at the door.  

Psychological safety also gives organizations a critical advantage in the race for talent. More than three-quarters of today’s job seekers consider psychological safety, inclusivity, and belonging when evaluating potential employers—a figure that rises to 83 percent among Gen Z candidates, a fast-growing yet elusive segment of the workforce. By intentionally fostering psychological safety, therefore, organizations can not only improve current working conditions but attract and retain the very individuals who will help sustain safer, healthier environments for the long term. 

“Psychological safety is self-reinforcing,” argues Gana Diagne, Chief Knowledge Officer at WPO. “When people feel secure, valued, and supported, they’re more likely to stay, more likely to thrive, more likely to innovate and collaborate, and more likely to create that same atmosphere for others. Safe workplaces start with secure individuals who model, protect, and pass that culture forward.”  

Tackling Stress at its Source: Enhancing Wellbeing Strategies with Psychological Safety and Psychosocial Risk Management 

For too long, wellbeing strategies have been relegated to the background—offered through apps and helplines but disconnected from daily work realities. While these supports play an important role, they often treat the symptoms, not the root causes, of work-related stress. 

That’s why Workplace Options launched the Center for Organizational Effectiveness (COE)—a strategic initiative powered by more than 40 years of global expertise and billions of data points collected from employees around the world. The COE works directly with organizations to uncover the specific psychosocial risks facing their workforce and deliver tailored, data-informed strategies that strengthen psychological safety, reduce psychosocial harm, and foster long-term resilience and wellbeing. 

“Psychological safety is ultimately about helping people feel seen, heard, and valued,” says Brecht, who led the formation of the COE. “You can’t do this without truly understanding what’s going on in your teams. That’s where the COE comes in—pulling back the rug, listening to what’s really happening, and helping leaders respond in ways that actually make a difference.” 

Leadership: The Linchpin of a Safe, Healthy Workplace 

It’s no secret that one of the biggest barriers to wellbeing programs’ success is sub-optimal participation. While relevance is often cited as the issue, the importance of leadership buy-in cannot be overlooked. 

When leaders demonstrate a clear, genuine commitment to their teams’ wellbeing, they send a powerful message: that not only is it okay but expected of employees to prioritize their health at work. Just as psychological safety creates the space to speak up and raise concerns, it also gives people permission to seek support and take care of themselves without fear of repercussions.  

Part of the COE’s strategy is working with leadership teams to determine how they can optimize their wellbeing support—customizing offerings, building a network of active bystanders or “wellbeing ambassadors,” and fostering a culture where asking for help is seen as a strength, not a liability.  

“Ultimately, the most effective wellbeing programs are the ones employees feel safe and empowered to use,” Brecht says. “When support is tailored, leadership-endorsed, and woven into the culture, its impact far exceeds anything a standalone program could achieve.”  

Cultivating Psychological Safety: From Principle to Practice 

While there’s no one-size-fits-all solution to employee wellbeing—there are, however, tried and true methods for cultivating psychological safety. As the US Surgeon Generals Five Essentials Framework emphasizes, centering and uplifting employee voice and creating a workplace where employees feel heard is a matter of making sure they feel: 

• Safe and secure 
• Connected and part of a community 
• Trusted and empowered 
• Seen and appreciated 

There are several ways leaders can achieve this, including: 

1. Redefining the approach to work itself:

Tight deadlines, chronic overwork, and ‘always-on’ cultures—especially in today’s world of hybrid and remote work—are major drivers of burnout and psychological harm. By reassessing workloads, minimizing unnecessary urgency, and creating space for flexibility, leaders can reduce stressors that inevitably undermine wellbeing. 

A psychologically safe team isn’t one that works less—it’s one that works in ways that are sustainable and considerate of individual needs and limits. This fosters an environment where employees feel they can manage their responsibilities without the risk of personal harm—whether physical or psychological. 

2. Recognizing and rewarding contributions:

Recognition is more than a morale booster—it’s a sign that employees are seen, valued, and safe to bring their authentic selves to work. Regular, meaningful appreciation fosters a culture where employees feel confident sharing ideas, participating in decision-making, and speaking up about concerns without fear of retaliation. 

This culture of open and positive two-way communication makes it easier to identify risks before they escalate—allowing leaders and their teams to address challenges early and collaboratively. By reinforcing helpful contributions and positive efforts, a focus on recognition and reward also presents a critical opportunity to reinforce behaviors that contribute to a safer workplace, while discouraging those that don’t.  

3. Championing inclusion and belonging:

Psychological safety cannot exist without a firm commitment to diversity, equity, inclusion, and belonging (DEIB). Tackling issues of bias, discrimination, and marginalization not only makes for a strong DEI initiative, but a robust health and safety strategy.  

A truly safe environment is one where every employee feels respected and secure—regardless of background or identity. By addressing systemic barriers, promoting inclusion, and actively fostering employees’ sense of belonging and togetherness at work, leaders create spaces where people are less likely to encounter bullying, harassment, or exclusion—and the serious health and safety threats they pose.  

4. Offering flexibility and autonomy:

Control over how, when, and where one works is a key determinant of workplace wellbeing—and its absence a well-established risk factor. Flexibility communicates trust, acknowledges employees’ complex lives, and opens the door to more effective navigation of daily demands and workplace challenges. 

When employees are empowered to tailor their workflows, schedules, and environments to fit their needs, they are better equipped to manage daily demands, avoid unnecessary stress, and create conditions that support their own—as well as their colleagues’—wellbeing. 

5. Fostering a sense of purpose:

People thrive when their work feels meaningful. When employees have a voice in shaping the very systems that affect them—and feel they’re actively contributing to the organization’s broader mission—they’re more likely to feel seen, secure, and engaged. 

Involving employees in key decision-making, maintaining open, transparent communication, and empowering employees to offer solutions to emerging challenges are just a few ways leaders can strengthen psychological safety while fostering a sense of mutual responsibility. Through shared accountability, leaders can empower employees to take ownership—not only of their own and their team’s performance, but also of their health, safety, and overall wellbeing at work. 

The Future of Workplace Health and Safety is Psychological Safety 

In today’s world of work, occupational health and safety demands a holistic approach—one that recognizes the undeniable link between psychological safety and organizational resilience. Psychosocial risks are not merely cultural challenges; they are critical health and safety concerns that require urgent action. Failing to address these risks can have profound consequences, including no less than decreased performance, higher turnover, weakened collaboration, and heightened conflict. 

Psychological safety empowers organizations to shift from reactive problem-solving to proactive, people-first leadership. By tackling workplace stress at its source and promoting an environment of trust, transparency, and inclusion, organizations can tap into the potential of a fully engaged and authentic workforce. The Center for Organizational Effectiveness (COE) helps employers achieve this through tailored, data-driven strategies for embedding psychological safety into the heart of their health and safety frameworks. 

The choice is obvious: organizations that prioritize psychological safety will emerge stronger, more resilient, and better positioned to navigate the challenges of today’s fast-paced, ever-evolving world of work. Now, more than ever, is the time to act and build safer, more sustainable work environments that will ensure lasting success, wellbeing, and engagement. 

Ready to unlock the potential of a safe, secure, and empowered workforce? Contact us today to learn more about how Workplace Options can help—and be sure to check out the Center for Organizational Effectiveness for more insights on creating a psychologically safe workplace.