Why Psychological Safety Should Be Every Workplace’s Secret Weapon
When people think about workplace safety, it’s usually hard hats, hazard signs or ergonomic chairs that come to mind. But today, another kind of safety is proving just as critical: psychological safety. Our contributing psychologist, Oliver Mills-Edward, brings a unique lens to this conversation. With a career that spans both financial services and workplace wellbeing, he understands not just the human cost of poor mental health, but the very real impact it has on productivity and performance. His view is clear: the psychological safety of Australia’s workforce is inseparable from the health of the Australian economy.
That might sound like a big claim, but it really comes down to something very human: whether people feel supported, respected and safe enough to bring their whole selves to work.
By the end of 2024, poor mental health was costing the Australian economy nearly $936 million every single day. These figures are staggering, but what they actually represent are people—employees stretched too thin, young workers struggling to cope, and managers watching good people burn out. Almost half of Australians (43%) will experience a mental disorder in their lifetime, one in five (21.5%) experienced one in just the last year, and for young people aged 16–24, the rate jumps to 39% in a single year. These are not abstract numbers; they are colleagues, friends and family.
The workplace impact is undeniable. A mental health claim results in an average of 30 weeks away from work—five times longer than the typical physical injury. Absenteeism alone costs employers billions each year, and presenteeism, where staff show up but can’t perform at their best, adds billions more. Mills-Edward points out, “investment in mental health is not an expense—it’s a strategic driver of organisational resilience and sustainability.”
And when organisations take psychological safety seriously, the payoff is remarkable. Research shows that by strengthening role clarity, addressing workload, and supporting open communication, businesses can reduce job strain by 14%, cut depression by 13%, lower sick days by 43% and slash presenteeism by 72%. In dollar terms, that translates to around $180,000 saved each year for a business with 100 staff, and well over $1.8 million annually for organisations with more than 1,000 employees.
“Available data from Safe Work Australia showed that a mental health related claim would result in 30.7 working weeks lost on average, which is almost five times longer than the 6.2 weeks you would typically see associated to a physical injury. If we also adjust for inflation figures, the $9.6 billon that absenteeism cost Australian employers in 2018-2029, would be $11.5 billon last year. And for those who attend work but function below their capacity (Presenteeism), this costs an additional $8.5 billion for the same period. These figures are not simply statistics but represent prolonged strain on teams, disrupted service delivery and diminished organisational performance.”
The key, of course, is prevention. Every health professional knows prevention is more effective than intervention, and the workplace is no different. This means making mental health a genuine leadership priority, checking in on workloads as carefully as physical safety, and designing jobs that allow people to succeed without burning out. It also means giving managers the skills to have open, supportive conversations, promoting help-seeking without stigma, and making support easy to access.
None of this requires grand gestures. Often, it’s the small, consistent steps that create a workplace people actually want to be part of. As Mills-Edward puts it, “the most successful organisations of the future will be those that treat mental health not as a side project, but as a core part of strategic and operational excellence.”
For HR managers, that’s both the challenge and the opportunity.
The challenge is recognising just how high the stakes are. The opportunity is to lead the way—building workplaces where people thrive, culture is stronger, and business performance follows naturally.
If you’d like guidance on taking the next steps toward building a psychologically safe workplace, we’d love to help. Reach out to our team and let’s explore what this could look like for your business.
