The key step HR leaders should not overlook in change management and restructures
Psychosocial risk assessments should be a key part of change management and restructure planning and companies that overlook the process can face “significant legal risk”, according to a leading employment lawyer.
Sarah Clarke, a partner in the employee relations and safety team at King & Wood Mallesons, said attention on psychosocial hazards had increased in the past five years.
“But in particular for HR, and this has been highlighted by unions in certain sectors in the past 12 months, when you're looking at change management programs, whether that's restructures or reductions in headcount, these are now being seen as potential hazards from a psychosocial risk perspective,” she said.
SafeWork Australia defines psychosocial hazards as anything that could cause psychological harm, and businesses are required to manage the risk of psychosocial hazards in the workplace.
Common workplace hazards include job demands, poor support, traumatic events or material, violence and aggression and sexual and gender-based harassment.
“What is prudent now and absolutely necessary given the legal landscape around workplace health and safety, there needs to be a risk assessment of these change management programs, and I don't think historically it has been viewed through that lens,” she said.
Clarke said safety issues in the workplace could no longer be siloed and owned only by workplace health and safety teams and there were now consultation obligations that sit within workplace health and safety laws and consultation obligations in other workplace laws.
“This may require a multi-disciplinary team of HR, workplace health and safety and legal to look at the changes and assess the impact on employees from a psychosocial risk perspective,” she said.
“There is always a concern about impact, but actually looking at it through the lens of safety is incredibly important – looking at the risks here, what's the likelihood of the impact of risk and what are the controls they're going to put in place around our people when they're going through sometimes a very protracted and difficult process.
“It is not about totally derisking work, but it is about looking at those hazards and looking at what a workplace can sensibly do to mitigate those risks.”
Clarke said not all restructures and change management programs will pose a significant risk, but businesses should ask if a risk assessment is needed in the preparation phase.
“I think the identification of the hazards can be quite challenging and not always done that well and really looking at the subtleties of some of these changes and the impacts it can have on people,” she said.
“It’s an incredibly difficult macro environment at the moment - cost of living and the uncertainty of the world means that that backdrop actually is incredibly difficult for people to have when they're also going through change at work, so I think HR professionals really need to be thinking quite broadly actually about these issues.”
She said it was important for HR practitioners to “elevate these issues within their organisation and make sure they are very much at the forefront of discussions at the board level, at the executive level”.
“This is a criminal regime, and these matters are very serious and if they are not paid the attention that they warrant now there can be significant legal risk for organisations,” she said.
Psychosocial hazards can cause both psychological or physical harm, according to SafeWork Australia.
“Stress itself is not an injury. But if workers are stressed often, over a long time, or the level of stress is high, it can cause harm,” it advises.
Psychological harm may include anxiety, depression, post-traumatic stress disorder, sleep disorders, while physical harm may include musculoskeletal injuries, chronic disease or fatigue related injuries.
“Psychosocial hazards may interact or combine to create new, changed or higher risks. It is important to consider all the psychosocial hazards workers may be exposed to when managing psychosocial risks,” it says.
“Some hazards may not create psychosocial risks on their own but may do so if combined with other hazards. For example, when workloads are high the risk may increase if workers cannot take breaks or there is no one around to help. Some hazards may only create risks on their own when severe.”
