Small businesses fall behind on psychosocial hazard management

Many small and medium-sized enterprise (SME) decision-makers remain unaware of their legal obligations to manage psychosocial hazards, posing serious risks to worker wellbeing and compliance with work health and safety laws.

A national multidisciplinary study has found that Australian enterprises with fewer than 20 workers showed concerning gaps in awareness and action on psychosocial hazard management, with around one-fifth unaware they had legal obligations to manage these workplace risks.

The national survey of 288 decision-makers across Australian small to medium-sized enterprises found that micro-sized businesses reported the lowest levels of compliance across all measures examined. More than half of these organisations lacked formal policies to manage psychosocial hazards, while 44 per cent had not attempted to identify such hazards in their workplaces.

The pattern became clearer as researchers compared responses across enterprise sizes. Businesses with 20-100 workers and those with 101-200 workers demonstrated higher awareness and more structured approaches to managing psychosocial risks, which include workplace factors such as bullying, excessive workloads, and poor workplace relationships.

The research team, comprising Dr Rebecca Langdon from the QUT School of Management, Associate Professor Nektarios Karanikas from the  QUT School  of Public Health and Social Work and Associate Professor Carol Hon, from the QUT School of Architecture & Built Environment, examined seven areas including awareness of legal obligations, formal policy adoption, hazard identification attempts, and use of official codes of practice. 

“Psychosocial hazards can seriously affect mental and physical health, yet many SMEs are not meeting their legal obligations,” Dr Langdon said. 

“With SMEs employing around 65 per cent of Australia’s workforce, improving awareness and compliance is critical. We need scalable solutions and campaigns that make it easier for these businesses to protect worker wellbeing and meet regulatory requirements.”

Despite amendments to WHS regulations across most jurisdictions making explicit mention of psychosocial hazard management, and the introduction of Codes of Practice since 2021, uptake remained inconsistent across business sizes.

Responsibility for managing psychosocial hazards also varied by enterprise size. Micro-sized businesses often relied on general or senior managers, with 31 per cent reporting no dedicated person for this role. In contrast, larger SMEs typically assign responsibility to HR personnel, suggesting a more formalised approach.

The research team identified two priorities for supporting SME compliance: creating practical and scalable resources suited to businesses with limited time and expertise, and designing targeted education campaigns that account for the contexts of micro-sized enterprises. Industry associations could play a stronger role in sharing resources and promoting practices, the researchers noted, helping SMEs create safer workplaces and meet their legal obligations.