Two in every five Australians have reported experiencing a mental health condition at some point in their lifetime.

Psychological health represents an individual’s behavioural, emotional, mental and social well-being. Good psychological health is not just indicated by an absence of mental illness, but rather by the presence of balanced emotions and behaviours.

With businesses increasingly focusing on mitigating physical workplace hazards, psychosocial hazards and their widespread impacts can often be overlooked.

According to the latest National Dataset for Compensation-based Statistics and results from the People at Work and National Return to Work surveys, poorly managed psychological health has greater cost and productivity impacts on Australian businesses than serious workplace injuries.

In Australia, rising rates of poor psychological health are associated with higher compensation claims and greater time away from work.

Australian government statutory agencies such as Safe Work and WorkSafe, define serious claims as worker claims which result in ≥1 lost working week. 

In 2021–2022:

  • Mental health conditions had increased by 36.9% from the previous years and made up 9% (~11,700) of all serious worker compensation claims
  • Australian businesses paid $~43,000 more in median compensations per serious mental health claim than per serious work injury claim
  • Serious mental health claims resulted in a median of 34.2 lost weeks of work compared with 8 weeks for serious injury claims
  • The return to work rate for individuals with mental health claims was 12.5% less than those with workplace injuries (79.1% vs 91.6%)

Of the 10,000 serious mental health claims lodged nationwide between 2021–2022:

  • 27.5% were due to workplace harassment
  • 25.5% were due to work pressures

How does good psychological health promote greater workplace productivity?

Research strongly suggests that employees with good psychological health have:

  • Higher motivation and engagement – engaged employees are more likely to feel a sense of purpose and satisfaction, which often translates to an increased willingness to learn and contribute to business and team goals
  • Enhanced concentration and focus – a healthy mind is less easily distracted by stress or other external factors which can impact work quality
  • Improved problem-solving skills – a well-balanced individual is more likely to approach work challenges with a clear perspective and provide creative or innovative solutions
  • Increased resilience to stress – individuals with good mental health are more likely to have efficient coping mechanisms for stress management
  • Positive workplace relationships – happier employees are more likely to collaborate and communicate with co-workers

For businesses, healthy and happy employees reduce staff turnover and associated recruitment and training costs and increase workplace presenteeism, productivity and revenue.

Fostering good psychological health in your workplace

Psychological health can be supported and fostered across all organisational levels within a business.

Organisation level
  1. Policy creation – ensure your workplace has a clear mental health policy that, where possible, promotes work-life balance and mental wellbeing via flexible working arrangements or ‘doona days’
  2. Invest in mental health resources – allocate resources towards providing employees professional help and educational tools e.g. Employee Assistance Programs, workshops and wellness seminars
  3. Managerial training – train managers and team leads on recognising signs of deteriorating mental health and how to foster safe workplace environments that promote open communication
  4. Regular employee surveys ­­– use feedback from regular employee surveys to help inform decisions on mental health programs and workplace initiatives
Team level
  1. Regular team check-ins – weekly team meetings allow individuals to discuss work progress and share current challenges, providing an opportunity for problem-solving and fostering a supportive environment
  2. Clarify job roles and expectations – clear communication about expectations can help reduce ambiguity, uncertainty and misunderstandings around job roles and responsibilities which can greatly reduce work pressures
  3. Recognise achievements – celebrating and recognising team or individual accomplishments helps boost employee morale and motivation
  4. Encourage peer support – peer support networks are invaluable for stress management. Lead by example and foster collaborative and supportive team environments through open communication, active listening and a willingness to help others
Individual level
  1. Provide career development opportunities – feeling stagnant in one’s career can often lead to feelings of dissatisfaction and stress. Promote internal training programs or create career development initiatives that provide opportunities for advancement
  2. Develop time management skills – individuals often feel overwhelmed when they are not balancing workloads effectively. Communicate with employees and help prioritize daily or monthly tasks to manage workplace pressures
  3. Promote seeking help – battle the stigma of asking for help for mental health. Actively promote available resources to employees e.g. posters in break rooms or around the office, internal campaigns and creation of a dedicated space listing employee benefits   
  4. Stress management – provide employees with resources promoting healthy eating, exercise and mindfulness, or organise annual health and wellbeing workshops focussed on psychological health

To assist you in improving your employees’ psychological wellbeing, Sonic HealthPlus offers a range of Psychologist Services including Cognitive Functioning and Neuropsychology Assessments, onsite Health and Wellness Seminars and Psychological Pre-Employment Assessments. 


Safe Work Australia (2024) Psychological health and safety in the workplace 

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