In April 2023, significant changes to Commonwealth Work Health and Safety laws came into effect, focusing on psychosocial health and safety in the workplace. For the first time, the Work Health and Safety Regulations now prescribe how employers must identify and manage hazards and risks to workers’ psychological health and safety.
What does this mean for small to medium businesses? Well, organisations are now legally required to take proactive action to prevent psychological harm. In addition, workplaces that are found to have caused psychological harm may face legal action and fines.
Why SMEs are most at risk from the new safety laws
Ironically, the same qualities that make working for an SME appealing – such as agility, flexibility, and a reputation for less bureaucracy and red tape – also create psychosocial hazards and a risk to worker safety.
1. Many operate on stretched resources
Many SMEs already operate with stretched resources and limited funding, and employees often wear multiple hats. This role-juggling can create a psychosocial hazard, with burnout being a leading cause of resignation, SMEs are all too aware of the increasing costs of recruitment and retention.
2. Typically have a hands-off approach to safety
SMEs may not have a dedicated WHS or HR professional. In some cases, they outsource these roles. In others, the functions don’t exist at all. This hands-off approach to people and safety can lead to psychosocial risks, in particular the management of harmful behaviours, as workplace bullying is now the leading cause of workers compensation claims.
3. Reactive instead of proactive systems
External pressures – like new legislation or market shifts – often result in rapid workplace changes. While SMEs are celebrated for their flexibility, this agility sometimes comes at the expense of organisation-wide proactive strategies that protect workers from psychological harm and improve worker wellbeing.
What hazards are most common for SMEs?
The code of practice identifies 14 hazards, but some are more prevalent and challenging for SMEs than others.
Job demands – Sustained or intense high levels of physical, mental or emotional effort that are unreasonable and chronically exceed workers’ skills.
What to do: SMEs can take preventative action by monitoring workloads, have a time-in-lieu policy for overtime and ensuring a culture that does not encourage excessive work hours.
Lack of role clarity – Unclear, inconsistent or frequently changing roles, responsibilities or expectations, and a lack of important job-related information can create stress.
What to do: Regularly updating job descriptions, having clear communication with staff regarding changes and supporting organisations to have open dialogue relating to changes.
Poor support – Lack of support could be the practical skills and resources required to complete the role, or the interpersonal support from managers and peers.
What to do: Provide adequate training and resources through onboarding and ongoing employment, supporting leaders to upskill in coaching and communication skills, and creating a workplace culture that encourages asking for help and support.
Individually, these hazards may not cause psychological harm. However, when they occur together, the risk of harm increases.
Next steps
Taking a proactive approach is not only best for workers but also more cost-effective in the long run.
Costs such as workers compensation claims or regulator fines are a major business risk for SMEs. Wellbeing solutions like an Employee Assistance Program (EAP) is only part of the solution – it’s only effective only if it’s part of a bigger strategy to improve workers’ well-being and prevent harm.
Implementing a comprehensive psychosocial risk management strategy is crucial for SMEs to comply with the new regulations, improve worker retention and create a people-first culture.
