Are younger employees suffering from more stress at work – or do they just think they are?

Safe Work Australia reported in October 2025 that serious workers' compensation claims for mental health conditions reached 17,600 in 2023-24 - a 14.7% increase from the previous year and a 161% increase over the past decade, the largest growth of any injury category. Mental health conditions now account for 12% of all serious claims, the highest proportion ever recorded. The median time lost for a psychological injury claim is 35.7 weeks - almost five times longer than other serious claims. The median compensation is $67,400, compared with $16,300 across all serious claims.

Those figures represent a relatively small share of total claims volume but almost a third of total compensation cost. The financial pressure on employers is real. So is the regulatory pressure: in Victoria, the Occupational Health and Safety (Psychological Health) Regulations 2025 came into force on 1 December 2025. The Safe Work Australia national model WHS regulations, adopted in 2022, require all employers to identify and control psychosocial hazards. The regulatory landscape has shifted from responding to complaints to proactive risk management as a baseline obligation.

All of that may be correct. But before the policy prescription, it is worth pausing at the diagnosis.

What the numbers actually show

John Burn-Murdoch, the Financial Times's chief data reporter, published an analysis this week that raises a question the headline figures do not answer: are we measuring an increase in psychological distress, or an increase in the willingness to describe ordinary difficulty in clinical terms?

Working across UK, US and international data, Burn-Murdoch found that the share of young people reporting a mental health problem has risen steeply over the past decade. The share who say a mental health condition limits their day-to-day functioning has barely moved. In England, a peer-reviewed study by Christoph Henking and Ben Baumberg Geiger, published this year, found that while there has been a steep rise in the share of young Britons reporting a mental illness, the share saying a mental health problem limits their day-to-day functioning has barely budged.

The Australian workers' compensation data is not self-reported in the same way as British Labour Force Survey figures - it requires a formal claim, medical certification and insurer acceptance. That makes it harder to dismiss as pure labelling shift. But it does not make it immune to the broader cultural change Burn-Murdoch documents. What constitutes a compensable psychological injury, what workers and their doctors are prepared to claim, and what insurers will accept has shifted alongside the broader social change in how mental health is discussed and understood.

When young people were asked whether someone experiencing "broad happiness but occasional moments of worry, frustration or loss of confidence" has a mental illness, more than half now say yes. A generation ago, one in five said the same. That shift in labelling does not remain at the survey boundary. It enters the consulting room, the GP letter, and the compensation form.

The political signal in the data

The rise in reported mental health problems is significantly higher among those who identify as politically left-leaning than right-leaning. The divergence does not appear for physical health.

If the rise were driven primarily by genuine psychological deterioration - caused by economic hardship, housing costs, social media or job insecurity - one would expect it to track fairly evenly across the political spectrum, as physical illness does. It does not. That finding suggests at least part of what surveys are capturing is a shift in how certain cultural communities conceptualise inner experience, rather than a uniform deterioration in the psychological health of a generation.

The most common causes of serious mental stress claims in Australia in 2023-24 were harassment and workplace bullying (33.2%), work pressure (24.2%), and exposure to violence and harassment (15.7%), according to Safe Work Australia. These are specific, identifiable workplace hazards - not vague references to life difficulty. Harassment and bullying causing psychological harm is a categorically different problem from the broad labelling shift Burn-Murdoch documents. The question for Australian employers is which part of the 17,600 claims falls into which category. Current data cannot cleanly separate them.

The Australian dimension

Persephone Stuckey-Clarke, partner in the employment and safety team at Dentons, told HRD that the regulatory shift has moved businesses from being reactive to complaints to being required to take a far more proactive approach to managing mental health. That shift is legally appropriate. It also creates conditions in which the formal classification of psychological difficulty as compensable harm becomes a more natural step for workers who might previously have managed through informal means or left the job.

An employee experiencing the normal difficulties of a demanding workplace - conflict with a manager, excessive workload, uncertainty during a restructure - now operates within a framework that actively encourages them to consider whether those difficulties constitute a psychosocial hazard. Whether this represents a genuine uncovering of previously hidden harm, or a progressive reclassification of ordinary working difficulty as compensable injury, is a question the current data cannot definitively answer.

Frederik Anseel, Dean of UNSW Business School and Professor of Management, made the broader generational point to HRD: many so-called Gen Z traits reflect a natural stage of transition into professional life, rather than an entirely new phenomenon. "Every new generation of young people comes with energy, new ways of speaking, and new ways of working. They're not used to the workplace yet, and that can cause friction - but it's the same story we saw with millennials 20 years ago," he said. The legal obligations on Australian employers are real, and the genuine harm behind many claims is real. Not every number in the statistics represents the same type of problem.

The ambition data

Eight in ten Gen Z workers say their goal is to reach the top of their field, a higher share than millennials or Gen X expressed at the same career stage, according to research cited by HRD. More than half respond to out-of-hours messages immediately.

Professor Anseel's second observation is relevant here: "We know that young people with the best early work experiences are the ones who accelerate in their careers. And those experiences happen in the workplace - not in isolation at home."

A generation taking psychological injury claims at record rates is simultaneously expressing higher career ambition than any of its predecessors. The data is not yet precise enough to explain what is driving the gap between those two facts.

The cost of not asking these questions

The $1 billion threshold for mental injury compensation costs was projected by CEDA to be a 2030 milestone. It was crossed five years early. That acceleration demands a response.

The Victorian regulations, the national model code, the mandatory psychosocial hazard identification requirements - these are legally correct responses to a genuine problem. Harassment, bullying and excessive work pressure causing psychological harm is a problem workplace regulation can and should address.

But if a significant portion of the claims growth reflects labelling shift, cultural change in how difficulty is categorised, and the expanding scope of what constitutes compensable harm, then regulatory compliance alone will not move the numbers. Employers who invest heavily in psychosocial risk management while changing nothing about how work is actually structured may find, some years from now, that the claims trajectory has not responded as expected.

The more useful question - uncomfortable as it is in the current regulatory environment - is which part of the 17,600 represents genuine psychological injury caused by identifiable workplace hazards, which part represents a reasonable response to genuinely poor working conditions, and which part reflects the broader cultural shift in how working difficulty is labelled and claimed. Until those three things can be distinguished, the cost estimates and the prescriptions that follow from them should be read with some care.