Gallagher warns employers to keep psychosocial risks at front-of-mind

The Australian Workforce Trends Report 2023 has revealed that psychosocial risks have emerged as a major factor for employers when managing workplace wellbeing, with employees experiencing lower wellbeing than 12 months ago, dropping four points from 2022.

 

As well as taking a personal toll, poor workplace wellbeing is costing employers in the form of  decreased productivity and morale, as well as increased employee turnover – an especially pressing concern in a sector under as much workforce pressure as early childhood education and care (ECEC). 

 

Created by global insurance, risk management and consulting firm Gallagher, the annual report drives home the message that employers need to go beyond salary and perks to attract and retain top talent. 

 

Creating safe and healthy workplaces and combining flexible work arrangements with training and development are now key drivers to creating a happy and fulfilled workplace, authors note. 

 

“In today’s challenging recruitment market, employers who recognise the importance of providing a range of benefits that cater to a varied workforce are more likely to attract – and more importantly – retain staff,” said Dr Scott Krebs, Head of HR and People Experience Consulting at Gallagher said.

 

“Our research reveals not only the importance of workplace wellbeing but also the psychosocial risks that are coming into focus for all organisations,” he added.

Despite the importance of these issues, many employers lack an understanding of how to approach and resolve these risks from a practical perspective, leaving them exposed to risk. 

 

The Workforce Trends Report incorporating the Workplace Wellbeing Index is based on insights from more than 2,600 full-time, part-time, and casual employees across Australia. The research demonstrated a deterioration in workplace wellbeing from 2022 and highlighted the need for employers to have a greater focus on career, connection and psychosocial factors to improve the long-term employee experience.

 

Overall, the workplace benefits that are listed as important by employees include flexible working arrangements (70 per cent), professional training and development (69 per cent) and career development programs (63 per cent).

 

Deteriorating Workplace Wellbeing

 

Now in its second year, the Workplace Wellbeing Index acts as a barometer for how Australian workplaces are tracking in providing positive, safe, and effective workplaces for employees.

 

The 2023 Index reveals slightly less than half (48 per cent) of all employees report high wellbeing. This figure shows a deterioration in wellbeing on 2022 figures where slightly more than half (52 per cent) of all employees reported high wellbeing.

 

Of particular concern is that younger employees display significantly lower levels of wellbeing than older employees (5 per cent lower), and there is an increasing trend where employees continue to work even when they feel they should take time off (or more time off) due to their wellbeing. 

 

The research found that almost half of all employees (46 per cent) continued to work when they felt they needed time off – significantly more than the previous 12 months where around a third (31 per cent) of employees reported this.

 

Such findings reveal an increasing risk for organisations is being unaddressed, both in relation to increasing leave, loss of productivity and the likelihood of work-related injury claims, particularly with poor mental health conditions at work increasing as a proportion of serious claims.

 

Psychological health risks have increased, rising from 6.2 per cent of all serious claims in 2014-2015 to 9.3 per cent in 2020-2021, and are one of the costliest form of claims, posing a median cost of $55,270 per claim, compared to $13,883 for physical injuries and diseases.

 

Diverse needs and expectations of a modern workforce

 

When candidates consider joining a new organisation, the research found that rewards and benefits are a crucial factor (22 per cent) in their decision-making, with meaningful work (16 per cent) and a focus on safety, health and wellbeing (15 per cent) also ranking highly. 

 

In contrast, employees who have been working at their current organisation for two to three years place equal importance on remuneration, reward and benefits (19 per cent), career growth (17 per cent) with an equal focus on safety, health and wellbeing (17 per cent).

 

For younger employees (18-24 years) the focus on safety, health and wellbeing is much higher (20 per cent) and ranks above career growth (17 per cent), meaningful work (14 per cent) and remuneration (13 per cent).

 

Actively engaging with employees on wellbeing

 

The research showed the importance of not only actively listening to employee feedback on wellbeing but also ensuring employees are confident in their organisation’s ability to take meaningful action. While only two thirds of organisations (67 per cent) ask for staff feedback only half (50 per cent) of employees are confident that any changes will be made as a consequence of their feedback on wellbeing.

 

From an organisational perspective, the research reveals that budget constraints (43 per cent), different business priorities (39 per cent) and lack of senior leadership support (34 per cent) were named as the key barriers to the implementation of wellbeing strategies in an organisation.

 

Meaningfully addressing workplace wellbeing

 

The report highlights the importance of taking a proactive approach to employee wellbeing and offers practical strategies for employers to create a positive workplace culture. These strategies include fostering employee engagement, providing support for mental health, and creating a sense of community and belonging.

 

“Where meaningful change to workplace wellbeing has been made, our research reveals that employees are 2.3 times more engaged at work, 1.7 times more likely to stay with the organisation and 1.5 times more willing to go above and beyond,” said Dr Krebs.

 

“Our research shows that psychosocial risks are coming into focus for organisations, but employers still lack awareness of what factors impact workplace wellbeing. Employers need to take focused and deliberate action to address these risks and prioritise employee wellbeing or face the significant financial and social costs.”

 

Employers can access the full report and the Workplace Wellbeing Index here.