The Hidden Risk of Psychosocial Risk Management

With changes to Work Health and Safety (WHS) legislation across Australia, psychosocial hazards are now explicitly recognised as part of an employer’s duty of care; a long-overdue acknowledgment that mental health risks at work must be taken just as seriously as physical ones. As the new Victorian psychological health regulations are about to land, it’s worth reflecting on how this shift in focus around workplace mental health has influenced organisational practice.

For one thing, this regulatory recognition has given the issue of mental health at work real teeth. It has moved conversations about psychological harm from the margins to the mainstream and helped ensure organisations act not only when things go wrong, but to prevent harm from occurring in the first place.

Yet, as welcome as this progress is, there’s also a hidden risk, that in our rush to comply, we narrow our focus too tightly. Our emphasis on risk management can come at the expense of focusing on the actions that promote positive wellbeing in the workplace.

The irony here is that while the new regulations are designed to encourage preventative action, the risk is that organisations become preoccupied with managing the downside, reducing harm, while losing sight of the critical importance of promoting the upside: the protective factors that shape people’s experience of work in positive ways.

The limits of a prevention mindset

When organisations focus solely on reducing harm, risk management becomes about avoidance: identifying hazards, reducing exposure, and containing threats. This is necessary and important work. But it also positions mental health as a liability to be managed: something that can go wrong, rather than something that can go right.

In doing so, we may inadvertently miss the broader opportunity: to promote wellbeing, strengthen protective factors, and intentionally design work in ways that help people feel connected, capable, and psychologically supported.

Tory Higgins’ psychological theory of regulatory focus is useful here. According to Higgins, we can approach challenges from either a prevention focus where we aim to avoid negative outcomes and maintain safety, or a promotion focus — where we aim to achieve positive outcomes and support growth. Both are important, but they orient us differently. Prevention sharpens our focus on what could go wrong; promotion expands our view toward what could be better.

When applied to psychosocial risk, a prevention focus encourages organisations to reduce excessive job demands, eliminate bullying, and minimise uncertainty. Importantly, these are all vital steps. But a promotion focus urges us to go further: to design meaningful work, build cultures of trust and belonging, and equip leaders to support psychological needs like autonomy, mastery, and connection.

The importance of promoting protective factors

In my experience as a psychologist, it’s generally the promotion of positive and protective factors that is most effective in mitigating psychological harm. It’s also where organisations are likely to find the greatest return on their investment.

A promotion-focused approach doesn’t just support wellbeing; it also aligns naturally with broader organisational goals. When workplaces actively promote mental health, they’re also investing in performance, innovation, collaboration, and employee retention. They’re building teams that are not only free from harm but positioned to thrive.

And crucially, promotion isn’t separate from prevention, it’s often the most effective form of it. Protective factors like role clarity, supportive leadership, and strong team relationships are not just “nice to have.” They are powerful controls that help mitigate risk, buffer stress, and prevent harm before it arises.

But how do we protect against the possibility that this critical component of mental health management gets lost amid the requirements to identify hazards, maintain risk registers, and define controls? While theoretically there should be no such conflict, psychologically it appears there often is.

Shifting the conversation

As more organisations step up to meet their psychosocial obligations under WHS law, the challenge will be to avoid getting stuck in a compliance mindset. The goal isn’t just to meet a standard, it’s to support wellbeing in ways that enable people to perform at their best and to thrive. Good work is good for people, but good work isn’t just the absence of harm; it’s also the presence of the positive.

We need to build systems that not only prevent injury but promote wellbeing. We need to equip leaders not only to spot hazards but to cultivate healthy, human-centred workplaces. And we need to orient not just away from harm, but toward health, growth, and performance.

Because when it comes to psychosocial safety, avoiding the worst should never be our highest ambition.

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