November 2024
Mental health is emerging as a critical focus in workplace health and safety. Data from Safe Work Australia’s 2024 report on psychological health highlights concerning trends in work-related mental health conditions across Australian workplaces. With mental health conditions accounting for 10.5%, or 1 in 10, of all serious workers’ compensation claims in 2022-23 [1] —an almost 40% increase since 2017—this issue is impacting not only workers but also business productivity, recruitment, and retention.
As posters on noticeboards continue to warn us about good posture, appropriate footwear and other physical hazards at work, the question is: are Australian workplaces taking mental health hazards seriously enough to protect their workers’ well-being?
Rising Mental Health Claims and Costs
Psychosocial injury claims are currently the fastest growing claim in Australia, costing the economy upwards of $60 billion per year [2]. But these claims barely scratch the surface on instances of mental illness in Australia. In any year, around 1 in 5 people aged 16 to 85 will experience a mental disorder [3]. The Productivity Commission estimates that mental illness costs the economy between $200 billion and $220 billion a year.
Work-related mental health claims, primarily due to workplace stress, harassment, and bullying, are also rising at nearly double the rate of other work-related injuries – highlighting how much work is impacting Australians’ mental and physical well-being. In 2021-22 alone, 52.2% of mental health claims stemmed from harassment, bullying, and work pressure [4].
These claims aren’t just more frequent; they’re also more costly and time-consuming than physical injury claims. The median compensation for mental health conditions in 2022-23 was $65,402 per serious claim, which is significantly higher than all other injuries and diseases. Additionally, employees with mental health claims took around 37 weeks off work, five times longer than the average for other serious injuries. Absenteeism alone costs Australian workplaces $9.6 billion per year [5]. But this time away from work can have compounding and significant impacts on workers and their families.
It is increasingly clear that Australians need their workplaces to prioritise proactive mental health management to improve their well-being while mitigating the risks poor mental health can have on productivity and work culture. When untreated, psychological injuries can create significant financial burdens, not only in direct costs like compensation but also in indirect costs related to productivity losses and prolonged absences – all of which are symptoms of mental health hazards in the workplace. As such, investing in mental health initiatives is essential to build a healthy, productive workforce and a more resilient business.
Industry-Specific Challenges
It’s important for workers to note that different industries experience different vulnerabilities to work-related psychological injuries. For instance, workers in sectors such as healthcare, education, and public experience higher exposure to psychosocial hazards—such as high job demands, limited resources, and bullying—which contribute to poor mental health. In healthcare and social assistance alone, mental health claims were the highest over the last five years, likely due to the high-stress environments and frequent exposure to distressing situations.
Recruiting and retaining workers in these industries becomes increasingly challenging as workers seek roles that prioritise their mental well-being. Businesses that actively support mental health are better positioned to attract talent, especially as awareness around workplace well-being rises. Failing to address these needs, on the other hand, can lead to high turnover rates, poor reputation and difficulty filling roles in demanding fields. Understanding these industry-specific risks is important for employees, particularly when applying for new roles.
The Business Case for Prioritising Mental Health
tangible benefits, from improving productivity to enhancing employee engagement. Organisations that prioritise mental health can reduce the frequency and severity of psychological injuries, cut down on related compensation costs, and create a more supportive work environment. In turn, this can drive better recruitment and retention outcomes, as well as stronger overall performance.
With mental health at work now in the spotlight and posing such a significant challenge to Australians, treating mental well-being as seriously as physical health is no longer optional.
The current landscape calls for proactive strategies, from mental health training to clear anti-bullying policies and accessible mental health support. By fostering mentally healthy workplaces, workers and their employers can reduce the impact of psychological injuries and build a healthier, more resilient workforce into the future.
[1] Safe Work Australia, 2024
[2] Royal Australian and New Zealand college of Psychiatrists, 2016
[3] Australian Bureau of Statistics, 2023
[4] Safe Work Australia, 2023
[5] Productivity Commission, 2022