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Psychological Risk Management

Gallagher Workplace Risk has end to end programs that can help you create a healthier and psychologically safe workplace.


Each year, 7,200 Australians are compensated for work-related mental health conditions, equating to around 6% of all workers’ compensation claims, and approximately $543 million paid in workers’ compensation for work-related mental health conditions. At any given time, up to 1 in 5 employees are likely to experience a mental health condition. There are many more statistics being published every day on the impact and cost to individuals, their families, their work colleagues and the organisation they work within. Is now the time to address psychological safety in your workplace?

The Economics of Mental Health

Many businesses struggle with understanding what action can be taken to create a psychologically safe workplace and thereby improve the mental health of its workforce. We also speak with numerous safety practitioners who are struggling to sell the WHY or the ECONOMICS of investing in an appropriate fit for purpose mental health strategy.

In this regard, organisations need to understand that many specific actions designed to promote mental health in the workplace have already been piloted (nationally and internationally) and proven to be effective. There are also numerous studies showing the return on investment towards investment in mental health initiatives. Price Waterhouse Coopers (PWC) published in 2014, that successful implementation of effective actions towards creating a mentally healthy workplace can expect on average (across all industries), a positive return on investment of $2.30 for every dollar spent. A critical component to achieving an ROI is ensuring proactive identification of workplace psychological hazards that can impact upon key financial factors such as absenteeism, workers compensation claims and productivity.

Gallagher Psychosocial Risk Profile

A Psychologically Safe Workplace is a WHS Duty

The model WHS Act requires a PCBU to ensure the health and safety of their workers, so far as is reasonably practicable. It defines health to mean both physical and psychological health. The model WHS laws have not been implemented in Victoria, although this jurisdiction has comparable duties and definitions of health.

  • Under the model WHS ActPCBUs have a duty to protect workers from psychological risks as well as physical risks.
  • Psychological hazards can be managed using the same risk management process applied to physical hazards
  • In much the same way as physical hazards, an employer or PCBU should take a systematic approach to managing psychological health and safety including the preventing harm by eliminating or minimising risks, intervening early and supporting recovery.

What are Psychological Hazards and how do we identify these?

Mental health can be adversely affected by the exposure to a range of hazards or psychosocial risk factors in the workplace, including such examples as:

  • high job demand
  • low job demand
  • poor support
  • poor workplace relationships
  • low role clarity
  • poor organisational change management
  • poor organisational justice
  • poor environmental conditions
  • remote or isolated work, and
  • violent or traumatic events.

When exposure to these hazards is high and or prolonged, it can in turn lead to work-related psychological or physical injury. Work-related exposures to high levels of these psychosocial risk factors have been linked to high levels of unplanned absences including sick leave, staff turnover, withdrawal and presenteeism, and poor work and poor product quality.

By using a combination of tools (i.e. workforce survey, organisational document review, stakeholder interviews, gap analysis and focus groups), the Gallagher Psychosocial Risk Profile can help identify your psychosocial risk factors along with inform on the status of mental health in your organisation across 8 key pillars.

Gallagher Psychosocial Risk Profile Example

Once informed on the status of psychological health in your organisation, Gallagher Workplace Risk are well placed to support you with the development of a well informed mental health strategy and/or specific capability and capacity building education and training programs.

Frequently Asked Questions (FAQ)

What is Psychological Risk?

Psychological risk is a term used to describe the impact of potential psychological hazards or stressors to workers.  Work-related psychological hazards can result in physical, mental and emotional reactions from workers who perceive that their work demands exceed their abilities or resources (i.e. time or support) to do the job.  Prolonged risk of exposure to hazards can have excessive and long-lasting impacts to worker mental and physical health.  Employers are not able to control the hazards or stressors in worker’s personal lives; but do have legal obligations to minimise the exposure to work-related factors that may impact health.  The Gallagher Workplace Risk Team brings a wealth of experience and expertise to help your business understand what organisational, environmental and individual factors may lead to psychological risk and identify ways to reduce the effects of work-related stressors.

What are the obligations in managing workplace psychological risks, and how can this be best be managed and integrated into my organisation?

Employers have a legal responsibility to ensure the health & safety is effectively managed from both a physical and psychological risk perspective. This may not be confined to ‘traditional’ risks associated with stress, burnout or more known psychological conditions such as anxiety or depression. Employers have to look out for how they manage areas that may cause, or expose workers from vicarious trauma, fatigue, bullying, harassment and occupational violence.


There is a lot of implications between departments such as Human Resources, Work Health & Safety and Operations and each employer should have a Psychological Health & Safety Strategy that is designed in conjunction with and/or closely aligns with your WHS Management System. If neither is in place, please feel free to contact us and find out how Gallagher can help.

What is involved in a Psychological Risk Management Program, and how could Gallagher help to address these?

A sound psychological program should be conducted using scientifically validated and evidence based risk assessment tools. Attention should be considered toward the industry specific psychological hazards that are commonly found within your business operations.


Gallagher Workplace Risk take our clients along a project management cycle that is engineered to ensure key stakeholders and business risks are addressed. This will usually include:


  • Formation of a steering/working group – Using a consultative approach with a diverse group of workers
  • Psychological Health workforce survey – This will address evidence based psychosocial risk factors to both line managers and general workers
  • Psychological Safety Gap Analysis – Using ISO OHS management system principles & Psychological Safety risk assessment tools
  • Desktop Review – Covering client policy and procedures relating to Psychological Health, safety and wellbeing
  • Stakeholder interviews
  • Providing a final Psychological Safety Report, inclusive of all program activity insights, findings & recommendations


Further ongoing support can be provided, as needed through the Co-Design of a Psychological Safety Strategy as well as national Training & Education programs for the workforce.