The Business Case for Reducing Psychosocial Hazards and Workplace Bullying

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The Business Case for Reducing Psychosocial Hazards and Workplace Bullying

In recent years, there has been a concerning rise in workplace bullying-related workers’ compensation claims in Australia. Shockingly, statistics show that 1 in every 10 workers in the country is affected by bullying. This epidemic not only takes a toll on individuals but also has a staggering economic impact, costing up to $47 billion annually.

Despite government efforts to curb workplace bullying, the problem continues to escalate. However, there is hope on the horizon. Organisational management now has the opportunity to drive a lasting change in workplace culture by prioritising Psychological Safety Cultures. This shift aims to eliminate the risk of injuries caused by workplace bullying through compliance with the Safe Work Australia Managing
Psychosocial Hazard at Work Code of Practice 2022. It’s important to note that this code of practice is legally binding on organisations, falling under the duty of care mandated by Victorian and harmonised national Work Health and Safety legislation.

Accountants and financial officers hold unique positions to champion the elimination of psychosocial hazards and workplace bullying. By helping management understand the long-term benefits of compliance, such as reduced recruitment costs, increased productivity, and enhanced creativity, they can make a compelling case. Moreover, this commitment to fostering a safe workplace makes the organisation more attractive to top-tier talent, solidifying its status as an employer of choice.

However, the primary concern for management should be the potential personal liability faced by directors and managers due to the new code of practice. This code meticulously identifies necessary behavioural changes and assesses risks in line with work health and safety risk management procedures. It also delegates the responsibility of risk control and monitoring to organisations, emphasizing collaboration with workers and making everyone accountable for its implementation.

The code identifies psychosocial hazards such as conflict escalation, discrimination, and poor job design. While job design falls under the purview of management through strategic human resource management, conflict and discrimination often do not. To control these risks effectively, employee education and management’s commitment to promoting positive behaviour among employees is crucial. This can be achieved through early conflict resolution skills training and timely mediation to prevent conflicts
from escalating into bullying. In cases of discrimination and self-interest, individualised training or counselling may be necessary. Employment contracts can now include provisions to address predatory bullies breaching work health and safety duties as outlined in the psychosocial hazard code of practice.
Implementing these controls requires specialised knowledge in legal, management, psychology, and health sciences. Fortunately, these resources are now readily available through online AI education, training, policy templates, and employment contract templates. For small businesses, utilising specialized third-party solutions can be cost- effective compared to recruiting and coordinating multiple specialists. For larger organisations, outsourcing the expertise required to provide solutions may be more

Just as businesses rely on third-party suppliers for protective equipment like helmets or personal protective gear, psychosocial hazard protective controls are best developed and maintained by dedicated third-party specialists for off-the-shelf purchase and in-house application. Third-party providers typically offer cost-effective solutions due to their economies of scale. Empathyse®, for instance, is an evidence-based web and subscription product available in Australia that can be immediately applied in
organisations of any size. Trusted third-party suppliers can also carry more credibility with an organisation’s workforce than in-house initiatives.

Accountants and financial officers play a pivotal role as trusted advisors to both small business owners and directors of larger organisations. They are responsible for ensuring the ongoing profitability of these entities and, importantly, for protecting the personal wealth of directors and small business owners from legal liability that may not be covered under standard professional indemnity insurance. The long-term benefits of reducing compliance and recruiting costs, along with boosting productivity, far outweigh any short-term gains from ignoring psychosocial risks.

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