When people think of risk management—or even health and safety—they often focus on physical hazards: workplace accidents, security threats, or natural disasters. But what about the risks posed by psychosocial factors?
Such risks are the central focus of new research from Workplace Options (WPO) and the International Institute of Risk and Safety Management (IIRSM). Compiling insights from more than 8,000 professionals across a diverse range of industries and organization sizes, their new report examines the impact of psychological safety on employee engagement and risk management—notably, how a lack of commitment to psychological safety affects employee wellbeing, engagement, overall risk management, and the organization’s bottom line.
Major findings from the report were unveiled during WPO’s recent Leading With Purpose summit held in October. During the session, “WPO and IIRSM Research Insights: The Impact of Psychological Safety on Employee Engagement and Risk Management,” Stephen Galliano, Chief Customer Officer at WPO spoke with Sabreena Roberts, Director of Professional Services at IIRSM—who led the research initiative—about key findings from the report and their implications for leaders, HR and operations managers, health, safety, and wellbeing leads, and the workforce at large.
Read below for a glimpse of their conversation:
Stephen Galliano: The first question I want to ask you, Sabreena, is if you can highlight any trends that came out of this research that really stuck with or spoke to you?
Sabreena Roberts: Yes, there’s so many. But the main headline I would say is that everything that came out of this survey indicates that employee wellbeing is an intrinsic driver of success within an organization. Now that’s a broad statement and I’m sure it’s not news, but I’ll move on to some more specific trends that stood out to me that underline that point.
The first one is: when estimating what impact a psychologically safe work environment has on a figure for return on investment, more than half of the respondents agreed that the ROI contribution could range between 6 and as much as 20 percent, and a third of them suggested that it could contribute to more than 20 percent. But that’s not the only measure of success: Brand reputation, trust, credibility, and corporate culture play vital roles in an organization’s sustainability and impact customer acquisition, staff retention, absenteeism—and these came out as the top three areas that suffer when employee wellbeing suffers.
Stephen Galliano: Let me just ask you, Sabreena—I mean, we didn’t go out there to actually quantify any ROI—but are you saying that the respondents believed that there would be a gain for organizations?
Sabreena Roberts: Yes, whichever way you look at it or however you delve into it, there will be an impact on the bottom line within an organization. If your employee wellbeing is looked after—if your employees are engaged and performing—your revenue streams could increase, your costs could decrease. Either way, there’s a significant impact on the bottom line.
The other point of interest for me was that of the 88 respondents who said they had corporate strategies in place in their organizations that prioritized workplace wellbeing, 42 percent indicated that physical risks were given more priority than psychosocial risks as opposed to equal importance, and only 29 percent believed that their wellbeing programs were very comprehensive—while 24 percent believed that their programs were lacking or somewhat lacking.
Stephen Galliano: So, what you’re saying is some companies still think that physical risk and physical safety is more important than psychological health? That surprises me, considering what’s happened during and post-COVID. Is there a correlation between that priority or that emphasis on physical safety and the type of industry we heard from? Is physical risk more of a focus for some industries than others, is that what we’re seeing?
Sabreena Roberts: It could be. We could dissect the industries that we received responses from. So, a lot of them were types of organizations that would traditionally prioritize physical safety—construction, manufacturing, engineering, and those kinds of organizations. I haven’t seen the version of the report yet that looks at that detail, but from a highlights perspective, it looks like physical safety is still a major priority. It would be interesting to compare the focus on physical vs. psychological safety now compared to a few years ago.
Stephen Galliano: I want to go back to another thing you brought up. You mentioned that 24 percent of respondents said they had a program, but thought it was somewhat lacking in detail or services, and that reminded me of a debate that is currently taking place within the wellbeing industry about whether some employers are kind of just ticking the box, if you know what I mean, rather than going full out to create a program that is more meaningful and more impactful. Is that how one could interpret that figure, do you think?
Sabreena Roberts: Yeah, it could. It could be ticking the box. There’s no doubt as to how important having a program is—so you want to get the headline out that you have a wellbeing strategy and that you’re looking after the wellbeing of your teams but there are easy ways you can do that and there are difficult ways, and the difficult ways take a bit more time and effort and spend, so yeah—that is definitely an interpretation.
Stephen Galliano: Another thing you mentioned was that employee wellbeing has an impact on trust and credibility. How important would you say the impact is when there is no real regard to wellbeing or psychological safety?
Sabreena Roberts: Huge. I think people-centered risks have been hugely underestimated. Trust and credibility and corporate culture directly affect staff’s retention, levels of absenteeism, and therefore performance—and potentially your bottom line. If you aren’t taking care of your staff, they aren’t going to be able to take care of your customers. And word gets around, so then your brand reputation suffers, which means customer retention and customer acquisition suffers.
I think most people who are in HR, or a risk-and-safety-related role will recognize that as true, and that’s why our survey results showed these are the primary areas of risk.
Stephen Galliano: That leads me to a related question: what were the top hazards that the survey identified?
Sabreena Roberts: There’s a very definitive and clear ‘top three’ that were identified by our combined memberships from a list of 20 wide-ranging hazards. Half of those who completed the survey listed the top hazard as job demand—that’s clearly the biggest contributor to a decline in workplace wellbeing. And that’s followed by workplace stress in second place and poor work-life balance in third place, which makes sense as job demand obviously impacts pressure and stress levels and work-life balance, so they’re all connected.
Stephen Galliano: To me, that sounds like a commentary on management and a commentary on the role that a line manager or supervisor plays in managing and looking after his or her team and ensuring that individuals are performing and that they are not being overloaded. Am I interpreting that correctly?
Sabreena Roberts: So, I think that, throughout the report, there are a few findings in relation to management styles and where line managers and supervisors could be missing the mark.
Stephen Galliano: I mean, these are common findings; we’re just confirming what many of us know, so it’s not breaking news. But still, what can we learn from this? What do we need to do?
Sabreena Roberts: I suppose they’re common for a reason, and perhaps sometimes the temptation is there by leadership to dismiss it because saying job demand is ‘too broad,’ for instance, or it’s ‘cliche’ or an ‘easy excuse,’ but we should really be learning from it and taking it for what it is. We’re being told in quite clear terms that this is the biggest issue, so what do we need to do? I think it’s a question of what we need to do to tackle it if it keeps coming up. Of course, an unreasonable level of job demand will impact workplace stress and work-life balance. In a way, if you tackle one, you could also tackle two and three to an extent—but they aren’t the only stressors.
If we expand to the top five psychological hazards, we start to see more specific stressors, and these are poor workplace relationships or conflict and poor organizational change management. So now, maybe we’re starting to learn something. And now that you’ve heard them, I’m sure they aren’t surprising. But I wonder how any people would have actually guessed these two stressors being in the top five hazards without hearing that first. I don’t think they entered my mind when we were doing the research, even though I had the list in front of me. But when I saw them in the results, I thought, “Well, yeah, that’s obvious.”
I think organizational change management is a big one. It’s really difficult to do in a way that doesn’t impact your teams negatively—figuring out how to bring them along on the journey, engage with them, and make them feel like they have some kind of ownership over things. That makes sense to do, but it’s hard to do, and it’s easy to miss.
To hear the rest of their conversation, watch the full session here: https://www.workplaceoptions.com/info/leading-with-purpose-employee-engagement-strategies-to-inspire-and-win/
Download the full report, The Impact of Psychological Safety on Employee Engagement and Risk Management, here: https://www.workplaceoptions.com/uk/whitepapers/the-impact-of-psychological-safety-on-employee-engagement-and-risk-management/
