Data. The productivity benefits of psychologically safe workplaces

‘Through the successful implementation of an effective action to create a mentally healthy workplace, organisations, on average, can expect a positive return on investment (ROI) of 2.3.’

This blog is my third follow-up of Respect at Work’s October WorkSafe Month webinar questions, today’s title is Data. The productivity benefits of psychologically safe workplaces and it relates to the following question that I received: Do you have any data to emphasise the productivity benefits of psychological safety?  My reply at the time was something like ‘yes bucket-loads, but none that I can quote right now’, not the best answer, so here is just a sample…

My favourite definition of psychological safety is:

‘a sense of confidence that the team will not embarrass, reject, or punish someone for speaking up.’ (Amy Edmonson)

I’ve also just finished reading a simple yet powerful book, The 4 stages of psychological safety, the author, Timothy R Clark, defines psychological safety as:

‘a condition in which human beings feel (1) included, (2) safe to learn, (3) safe to contribute, and (4) safe to challenge the status quo – all without fear of being embarrassed, marginalized, or punished in some way.’  

Psychological safety should be the foundation of any workplace; productivity, innovation, trust and engagement thrive in environments where we feel included and safe.

According to research (State of Workplace Mental Health in Australia – well worth a read!) most Australian workers believe that a psychologically healthy workplace is important. However, this report also shows that most Australian workers also believe that their workplace is NOT psychologically healthy.

If we look at workplaces that have low PSC (psychosocial safe climates), there is a marked increase of stress, staff turn over and toxic cultures, all impacting time-off work and presenteeism, these issues then contribute to productivity loss.

Key findings from a report completed by Safe Work Australia, Psychosocial Safety Climate and Better Productivity in Australian Workplaces, are as follows:

• The total cost of low levels of PSC to Australian employers is estimated to be approximately $6 billion per annum.

• Workers in low PSC workplaces had significantly higher sickness absence and presenteeism than those in high PSC environments: they took 43 per cent more sick days per month and had a 72 per cent higher performance loss at work, equating to $1887 per employee per year in cost to employers.

• The total cost of depression to Australian employers through presenteeism and absenteeism is estimated to be approximately $6.3 billion per annum.

• Workers with severe depression took 20 times more sick days per month and had a 270 per cent higher performance loss than those without depression.

• Depressed workers cost employers, on average, between $2791 per year (mild depression) to $23 143 per year (severe depression).

• Workers with psychological distress took four times as many sick days per month and had a 154 per cent higher performance loss at work than those not experiencing psychological distress. This equates to an average cost of $6309 per annum in comparison with those not experiencing psychological distress.

• Relative to workers with high engagement, workers with low engagement have approximately 12 per cent more sick days per month and an average performance loss of 8 per cent, costing employers $4796 per annum.

But it’s not all bad news - these figures can be turned around.

The Heads-Up Report: Creating a Mentally Health Workplace, Return on investment analysis, states that;

‘…through the successful implementation of an effective action to create a mentally healthy workplace, organisations, on average, can expect a positive return on investment (ROI) of 2.3. That is, for every dollar spent on successfully implementing an appropriate action, there is on average $2.30 in benefits to be gained by the organisation.

These benefits typically take the form of improved productivity, via reduced absenteeism and presenteeism (reduced productivity at work), and lower numbers of compensation claims.’

Let’s commit to getting our workplace cultures healthy, because if we do that, the rest will follow.

I accept that some people need data and ROI figures as motivators to implement safe, supportive and respectful workplace cultures – for me and others it just makes sense.  However, there is always merit to data that supports us to say, ‘see I told you so’.

Invest in your workplace - I promise it will be worth it. 😊

Respect at Work can assist to implement a culture of psychological safety in your workplace – contact us for a chat