Psychosocial risks are becoming one of the most pressing challenges for organisations and many are still catching up.
According to the AHRI & DLPA 2025 Report, 38% of employers reported an increase in psychosocial risk claims or complaints over the past year. The top contributing factors?
- Excessive job demands and workload pressure
- Poor workplace relationships and conflict
- Lack of role clarity and unclear expectations
These issues don’t appear overnight. They build slowly through small but persistent signals: disengagement, rising absenteeism, communication breakdowns, or an overall drop in morale.
The key to managing psychosocial risk isn’t just compliance — it’s early detection and proactive action. By equipping leaders with the right tools and frameworks, you can strengthen wellbeing, engagement, and performance at the same time.
1. Identify Risks Earlier
One of the biggest challenges in psychosocial risk management is visibility.
By the time formal complaints or claims are raised, the team is often already struggling with low morale, trust issues, or burnout.
Forward-thinking HR and L&D professionals are addressing this by shifting from reactive to proactive monitoring, using diagnostics that give teams a voice early.
Tools like Team Signals allow organisations to regularly measure engagement, trust and wellbeing across eight key areas that influence performance. The feedback is collected confidentially, helping teams identify which areas are thriving, where there are gaps, and which actions to prioritise first.
Team Signals also creates a safe-to-speak culture, where employees can share honest feedback without fear of consequence, a crucial step in building psychological safety.
Find out more about the Team Signals tool HERE.
2. Strengthen Leadership Capability and Team Dynamics
The AHRI report identifies leadership quality as the single biggest factor influencing psychosocial safety.
Leaders set the tone for how pressure, conflict, and feedback are managed. Poor communication, unclear direction, and lack of empathy can quickly escalate everyday challenges into risks for wellbeing and performance.
Strong leaders actively cultivate psychological safety by creating environments where people feel seen, heard and supported.
Here are three simple leadership practices that help reduce psychosocial strain:
- Hold regular check-ins focused on listening. These don’t need to be long or formal. 15 minutes of genuine attention often uncovers what metrics alone can’t.
- Model vulnerability. When leaders acknowledge their own challenges, it normalises open dialogue across teams.
- Encourage upward feedback. Create multiple, safe pathways for staff to share ideas or concerns, anonymously or directly.
For deeper insight, psychometric tools such as the Team Management Profile (TMP) can help leaders understand how they and their teams prefer to work, communicate and make decisions.
It gives everyone a shared, neutral language for understanding differences and resolving friction early, turning diversity of thinking into a strength rather than a source of conflict.
Find out more about the TMP HERE.
3. Create Role Clarity and Better Work Design
Unclear roles and expectations remain one of the strongest predictors of workplace stress and disengagement.
When people aren’t sure what success looks like or how their work contributes to the bigger picture, frustration, overlap and burnout often follow.
Role clarity doesn’t just improve performance, it protects wellbeing. It helps employees make sense of their work and reduces the emotional strain that comes from ambiguity.
A simple starting point:
Ask each team member to list their top three priorities and how they believe success is measured, then compare the responses.
Discrepancies between answers often reveal hidden misalignments in goals, communication, or accountability.
The Takeaway
When leaders can spot early warning signs, communicate effectively, and design clear, meaningful work, they create the conditions for people to thrive.
Early detection, leadership capability, and role clarity don’t just prevent risk — they drive engagement, trust, and retention.
Start with one conversation. Or one diagnostic.
*Read the AHRI & DLPA 2025 Report here: Managing and Minimising Psychosocial Risks in Australian Workplaces | Australian HR Institute
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