For business owners and leaders, managing people can be one of the most rewarding parts of running a business but also one of the hardest.
What happens when the pressures on your team start to quietly build?
When stress, conflict or exhaustion begin to take a toll on performance and morale?
Behind every success story are the unseen pressures that influence how teams perform, communicate and cope when challenges arise. These are the factors that the Psychosocial Code of Practice brings into focus.
I’m Kristy, Co-Founder and Director at Seed HR. With more than twenty years of experience in Human Resources across a range of industries, I have seen firsthand how the right HR approach can transform both businesses and the people within them. My passion lies in helping leaders create workplaces that are compliant, fair and human, where challenges are met with practical solutions and every team member has the chance to thrive.
Earlier this year, I attended an AHRI course on the Code, which explored how employers can meet their legal obligations while building workplaces that are healthy, compliant and high-performing. Managing psychosocial wellbeing is a key part of every employer’s responsibility to create safe, sustainable and thriving workplaces.
At Seed HR, our role is to stay ahead of these changes, distil the complexity and help implement practical solutions that protect both your people and your business.
Let’s take a closer look at what the Code means in practice and how you can use it to strengthen your people, your culture and your business.
Understanding the Shift - What Are Psychosocial Hazards?
Psychosocial hazards are the aspects of how work is designed, managed or experienced that can cause psychological harm, even when no physical injury is present.
They include high workloads, low job control, poor support, unclear expectations, workplace conflict, or exposure to bullying, harassment or distressing events.
These risks are often harder to see, yet their impact can be profound.
They are also twice as common among women, reinforcing the importance of proactive, structured approaches to managing psychosocial wellbeing at work.
Understanding these hazards is only the first step. The next is recognising why they matter and how managing them can protect both your people and your business.
Let’s look at this now.
Why Psychosocial Hazards Matter
Psychosocial hazards have always existed in workplaces, but the way we address them has evolved. The Psychosocial Code of Practice places psychological safety on equal footing with physical safety, setting clear expectations for every business to identify, assess and control risks that can cause psychological harm.
This marks a shift from awareness to accountability, recognising that the mental and emotional demands of work directly shape wellbeing, performance and culture.
In Australia, psychological injuries now account for around one in ten workers compensation claims, resulting in an average of 37 weeks lost time.
A sign that the cost of inaction is now too high.
For business owners, this means moving beyond good intentions and informal support toward structured, proactive action. Psychological safety is now a legal duty and an essential part of creating a workplace where people can thrive.
The Legal Landscape – What Employers Must Do
Under the Work Health and Safety laws, business owners have a duty to protect both the physical and psychological wellbeing of their people. The Psychosocial Code of Practice gives clear, practical guidance on meeting this duty, using the same risk management approach that applies to physical safety. It involves four key steps:
- Identify potential hazards - Look for risks such as high workloads, poor communication, unclear expectations or conflict within the team.
- Assess the level of risk - how likely is it that these hazards will occur and potentially cause an injury? Watch for early warning signs including absenteeism, changes in behaviour, declining performance, or increased tension in the workplace.
- Implement appropriate control measures - Take action to reduce risks through practical steps such as redistributing workloads, clarifying roles, improving communication and providing access to wellbeing or support programs.
- Regularly review their effectiveness - Check that these measures remain effective and adapt them as your business and team evolve.
These steps should be applied as far as is reasonably practicable, meaning actions must be realistic, proportionate and effective for the level of risk.
Employers also have a broader duty of care to maintain a safe, respectful workplace and to prevent harassment or hostile behaviour. Managing psychological risk is no longer optional. It carries the same weight and accountability as managing physical hazards.
That’s all good in theory, but how does this work in business practically?
Here are some examples of how these principles can be applied in everyday business situations.
Practical Examples and Controls
The key here is to turn your obligations into practical, achievable actions that any business can apply, often through simple day-to-day changes. Whether the issue is heavy workloads or low job control, practical steps such as reviewing task allocation, setting clear priorities, and involving employees in decisions about their work can make an immediate difference.
If low job control is an issue, involving employees in decisions that affect their roles or giving flexibility in how work is completed can help restore balance.
Clear job descriptions, regular check-ins, and open feedback channels address low role clarity and strengthen trust between managers and employees.
In situations where employees are exposed to distressing or emotionally demanding work, support mechanisms such as debriefing, access to counselling, or temporary rotation through less intense duties can make a real difference.
Also regular team check-ins about workload, communication and wellbeing are not to be underestimated. They can help leaders spot early warning signs, strengthen trust and build a culture of openness before issues escalate.
From Compliance to Culture
Compliance will always be the foundation, but culture is where lasting change happens. A psychologically safe workplace is one where people feel seen, heard and supported, not just protected by policy.
When leaders listen, set clear expectations and respond with empathy, safety becomes part of everyday working life, not just a box to tick and its impact reaches far beyond compliance.
Teams become more engaged, performance lifts and trust grows. It is the kind of environment where people bring their best selves to work and know they’ll be treated with fairness and respect.
At Seed HR, this is the kind of culture we help our clients build, where compliance creates confidence and confidence builds a workplace where people genuinely thrive.
Every business wants to do right by its people, but sometimes the hardest part is knowing where to start.
The good news is you do not have to do it alone.
My team and I will walk alongside you to turn the Code into something that works in real life. Like simple systems, practical conversations and leadership that feels natural. When people feel safe and supported, they do their best work.
That is what every GREAT workplace is built on.