How to navigate employee health concerns and psychosocial hazard risk

Australian workers are taking less sick leave and feeling more guilt and stress about not turning up to work when they are unwell, new research shows. The broader impact on employees leaves companies at risk of failing to take potential psychosocial hazards seriously. Directors have a legal and ethical duty to manage these risks. What action should they be taking?

A study by People2People recruitment agency found 63 per cent of the workers surveyed admitted to turning up to work when they were unwell. Reasons beyond simply running out of leave included 22 per cent who “felt guilty”, 18 per cent “too busy” and 16 per cent who “feared judgement”.

Peta Seaman, Managing Director South Australia People2People

A shortage of candidates to fill open positions means many businesses are struggling. Teams are saying they’re not getting through the workload. There’s a real guilt around that in regard to taking the time out that they need. That’s showing in the data in this poll.

It’s not just being sick. It’s the pressure that workload brings. That psychosocial risk means it’s on us as leaders to make sure our employees’ wellbeing is taken care of. Part of that is to ensure they’re taking time when they need to, and also recognising when a person is required to take some leave. It’s not approached particularly well by managers, directors or team leaders. We need to educate those people to make sure they have the skills to recognise those signs.

Justin Angsuwat, CPO Culture Amp

There is a growing disconnect between awareness of workplace wellbeing and actual behaviour. While many organisations emphasise health, the reality is employees are still coming to work unwell, often because they feel they have no choice. Our research shows when employees feel psychologically safe, they’re more likely to speak up and may be more willing to take necessary time off. Our data also shows employees who feel psychologically safe at work are more able to sustain high performance over time.

Organisations need to start by measuring psychological safety across teams and departments. Leveraging analytics and AI can help uncover areas where wellbeing is at risk, often before problems become visible on the surface.

Managers also need to be trained to identify early signals of burnout and poor wellbeing — and to know how to respond. One of the most effective interventions is light-touch and frequent. For example, starting each one-on-one meeting with a simple sliding scale check-in on wellbeing, impact or workplace relationships can detect subtle shifts over time. Such small practices can lead to meaningful conversations and foster a healthier, more sustainable workplace culture.

Raj Tapper MAICD, Director Mirabel Foundation

In my experience working in the private sector, more people are opting to work from home while sick. This risks prolonging or aggravating illnesses, whether physical or mental. Periods of rest are curative, not a luxury. In business there is an inherent tension between delivering profits and caring for employees, especially in the short term. However, a key duty of the board is protecting long-term sustainable business success. This requires a sharp focus on the environment in which people work. An unsafe workplace can lead to a range of penalties and irreparable harm to a company’s reputation among consumers and future employees. This can be avoided through proactive steps to understand the potential sources of psychological harm in the organisation and putting in place measures to address them.

Fiona Crawford, Chief People & Culture Officer CreditorWatch

Data provides valuable insights, but not all impacts, such as those related to absenteeism, are captured in the numbers. Anecdotal feedback from the floor, meeting rooms and one-on-one conversations with managers offer critical context, helping to build a fuller picture of what’s really happening within the organisation. Performance energy naturally fluctuates throughout the year, especially during busy periods like the lead-up to Christmas, when personal and professional commitments peak. To navigate this, employees need to feel psychologically safe, built on trust and confidence in their manager.

When managers have meaningful, empathetic conversations, they gain deeper insight into individual needs. This opens the door to more honest, supportive dialogue and enables truly personalised approaches that reflect each person’s unique circumstances. By leading with understanding, you create an environment where people feel seen, supported and better equipped to perform at their best.

Peter Burnheim, Co-founder/COO Sonder

Our latest data showed 49 per cent of Australian and New Zealand employees are experiencing feelings of “burnout or exhaustion”. Despite this, only 23 per cent of employees said they took time off for their mental health in the past year — and 10 per cent took no time off at all.

Directors have a duty to ensure the company is managing risks to employee wellbeing effectively. Bringing this data to the board table helps elevate the issue to a strategic level so it receives the attention, resources and policy response it requires. Employees feeling “too busy” to take time off points to excessive job demands, low job control and inadequate support — psychosocial risk factors.

While the emergence of the normalisation of work-from-home arrangements has enabled more flexibility for many, this benefit does not extend to all. Job insecurity remains a key challenge for many. Australian Bureau of Statistics data indicates that 2.6 million workers (22 per cent of all employees) have no paid leave entitlements. It is not just cultural pressure, but pure financial pressure that compels people to work through sickness.

Safe Work Australia reports that the median workers’ compensation paid for a serious mental health-related claim is $65,400 — four times higher than the median paid across all serious claims. Beyond the financial cost, there’s a risk of serious incidents resulting from impaired performance, from errors in judgement to major safety breaches.

Nicole Karagiannis GAICD, Country Manager — Australia MyHR

Directors need to work with management to ensure both legislation compliance and the right culture is being fostered for a successful and sustainable business. Accountability and role modelling the right behaviours start at the top. There are many reputational risks companies must not ignore, especially in this social media and online era, where it’s increasingly easier for external parties such as candidates, customers or suppliers to learn more about a company culture.

Directors and leaders should recognise and discuss the nuances to this topic. Often human factors can create a subtext to a company culture. For example, accepting that a particular team member is always working through their illness because they are perceived to be a key person without whom the work suffers, or watching a colleague get recognised for their hard work despite being unwell, reinforces that this is not only tolerated, but encouraged.

The cost-of-living consideration leaves employees worried about taking unpaid leave. Add the complexity for working parents or employees caring for a sibling or a parent, who might need to bank personal leave for caring responsibilities. The reality is this is only getting worse as we get older and as our cost of living continues to rise. We have a collective duty to have a discussion about this and to think of sustainable and effective solutions.

This article first appeared under the headline 'Tackling employee health and wellbeing' in the August 2025 issue of Company Director magazine.