What is a psychosocial risk assessment and why get one?
Psychosocial hazards like stress, burnout, bullying, and role ambiguity can significantly impact employee wellbeing, and by extension, your organisation’s productivity, culture, and bottom line. While physical safety has long been a focus in workplaces, the importance of psychological health is now firmly in the spotlight.
That’s where a psychosocial risk assessment comes in. It’s not just a best practice, it’s increasingly a legal requirement. So what exactly does this process involve, and why should every business prioritise it?
By Matt Stanton, Clinical Psychologist at Life Matters
Understanding psychosocial risks
Psychosocial risks refer to aspects of work design, organisation, and management that may harm an employee’s psychological health.
These risks often arise from:
Excessive workload or unrealistic deadlines
Lack of role clarity or job insecurity
Poor communication or leadership
Workplace bullying or harassment
Isolation, especially in remote or hybrid work models
Insufficient recognition or support
Unchecked, these factors can lead to chronic stress, anxiety, burnout, and even long-term psychological injury. According to SafeWork NSW, employers must treat psychosocial risks just as seriously as physical hazards.
What is a psychosocial risk assessment?
A psychosocial risk assessment is a structured process that helps identify, evaluate, and control risks to psychological health in the workplace. It allows businesses to understand the root causes of mental stressors, prioritise them, and implement appropriate controls.
This type of assessment aligns with:
Safe Work Australia’s model Code of Practice on managing psychosocial hazards
ISO 45003 – the international standard for psychological health and safety at work
The Work Health and Safety Act 2011 (NSW), which legally obligates employers to eliminate or minimise risks to health and safety, including psychological risks
In essence, it’s about recognising that employee wellbeing is fundamental to workplace safety, performance, and compliance.
Benefits of conducting assessments
Implementing a psychosocial risk assessment brings numerous strategic and cultural benefits:
1. Uncovers Hidden Stressors
While some risks are visible—like excessive overtime—others are more subtle, such as micromanagement, exclusion, or poor communication. An assessment provides the data needed to identify these unseen drivers of stress.
2. Informs Meaningful Action
Assessments don’t just highlight problems—they guide solutions. Insights can lead to targeted actions such as workload redistribution, manager coaching, flexible work policies, or conflict resolution strategies.
3. Demonstrates Commitment to Wellbeing
By proactively addressing psychological risks, your organisation shows a genuine investment in staff welfare. This strengthens employee trust, boosts morale, and enhances your reputation as an employer of choice.
4. Supports Legal Compliance
SafeWork NSW and Safe Work Australia make it clear: employers have a duty of care to manage psychosocial risks. Conducting a formal assessment helps you meet this requirement and prepare for any audits or investigations.
5. Reduces Costs
Addressing psychological risks early can prevent expensive workers' compensation claims, reduce absenteeism and turnover, and improve overall productivity. Prevention is far more cost-effective than reaction.
How the process works
A typical psychosocial risk assessment involves several key steps:
Preparation and Consultation
Collaborate with key stakeholders (including managers and employee representatives) to understand workplace context and goals.Data Collection
Use tools like anonymous surveys, focus groups, one-on-one interviews, and observational analysis. Many organisations choose to work with registered psychologists or workplace consultants.Risk Analysis and Prioritisation
Evaluate findings to identify high-risk areas and prioritise them based on likelihood and impact.Intervention Planning
Develop and implement practical actions, such as improving job design, leadership development, policy changes, or wellbeing programs.Review and Monitor
Track the effectiveness of interventions and adjust as needed. Risk assessment is not a one-off activity, it’s part of a continuous improvement cycle.
Conclusion
Psychosocial risk assessments are no longer optional—they are a critical part of creating a mentally healthy, legally compliant, and high-performing workplace. For Newcastle organisations and others across NSW, embracing this process is not just about ticking a box—it’s about investing in people, performance, and long-term sustainability.
By identifying and addressing psychosocial hazards, your business can foster a safer, more supportive environment where employees can truly thrive.
If you’re interested in learning more about how you can build a mentally healthy organisation beyond implementing an EAP, read our guide Workplace Wellbeing in 2025
Further reading
Life Matters Disclaimer
All content in our article is published for informational purposes only. It is not intended to be a substitute for professional psychological advice and should not be relied on as personal advice. Always seek the guidance of a qualified psychologist with any questions you may have regarding your mental health.
Sources
SafeWork NSW – Managing Psychosocial Hazards at Work
https://www.safework.nsw.gov.au/resource-library/list-of-all-codes-of-practice/codes-of-practice/managing-psychosocial-hazards-at-work
ISO 45003:2021 – Occupational health and safety management – Psychological health and safety at work
https://www.iso.org/standard/64283.html
Comcare Australia – Preventing and Managing Psychological Injury
https://www.comcare.gov.au/preventing/hazards/psychosocial-hazards
