The unseen threat: Tackling psychosocial risk in the workplace

Protecting the health and safety of employees is a central pillar of any people strategy. Employers need to ensure they have robust policies and procedures in place to safeguard the wellbeing of their workforce — including their mental health.

In today’s modern, fast-paced world of work, there are a growing number of ‘unseen’ factors that can pose a threat to the mental health of employees. These psychosocial risks include:

Workload and work pace
Work-life challenges
Toxic leadership behaviors, job demands and insecurity
Organizational culture
Violence, harassment and bullying

Such risks are typically the result of poor job design or an unhealthy management culture — factors that can have a major impact on employee health and well-being. Mercer Marsh Benefits (MMB) Health Trends 2025^[1] report showed that psychosocial risks (toxic work environment, stress from work pressures), were the number three risk factor on employer-sponsored medical plan costs globally, according to insurers. And yet MMB’s People Risk 2024 research^[2] found that just 29% of employers have effective initiatives in place to create a psychologically safe workplace and address work-related causes of mental distress.

Clearly, employers need to do more to tackle psychosocial risks and create a healthy, supportive work environment. Where should they start?

Raise awareness and understanding of psychosocial risk factors

First and foremost, leaders need to raise awareness of how poor job design and harmful working conditions can impact people’s mental well-being and to make it okay for employees to talk about any pressures they are feeling at work. They need to ensure that people at every level of the organisation understand the psychosocial risks the workforce is facing and that managing these risks is a shared responsibility. It is not just up to HR or occupational health to deal with these dangers, every people leader has a responsibility to manage the risks their teams are facing.

Identify psychosocial risks through employee listening

It is important for employers to conduct proper risk assessments to identify the specific psychosocial hazards their workers face and the individuals who are most at risk. And this means getting out into the workforce and listening to people. Asking individuals to report aggression or violence may not capture all voices and could potentially misrepresent the lived experience of employees. Standardized questions can miss the nuances of how psychosocial risks manifest in different roles, teams and locations — for example, the occupational violence and aggression experienced by frontline workers can often go unreported^[3]. The only way to identify the real hazards being faced by workers is by getting them involved in the assessment, using focus groups, official reporting channels and employee listening tools to understand the specific challenges they face.

Protect and promote mental health at work by managing risks

Once an employer has identified the psychosocial risks their workers face, they need to take proactive steps to mitigate these hazards. There are no simple solutions here — employers cannot expect to apply a standard set of guidelines and achieve results. No two industries are the same, no two organisations are the same and no two employees are the same. Employers need to understand the profile of their workforce and the particular risks they face, and design solutions that address the root causes of mental ill health. This might mean adapting the design and management of work — for example, introducing flexible working and increasing employee participation in decision-making. It may involve creating more supportive cultures and better working environments, such as promoting greater autonomy as well as resources and support towards navigating work and life demands, while addressing social risks in the workplace, such as bullying. This will often require making investments in manager training in order to help them recognize and respond to the mental health needs of their teams.

Figure 1: Work factors impact employee health

*Source: Mercer Marsh Benefits

Build better care pathways

While employers should do all they can to mitigate psychosocial risks and prevent employee mental ill health, there will always be people who are affected by these hazards. And when this happens, it is important to get them the support and treatment they need as soon as possible. This means building care pathways that provide access to mental health benefits and medical services, such as psychological and psychiatric counseling, prescription medications for mental health, employee assistance programs and inpatient care for mental health needs.

Figure 2: The mental health care continuum

*Source: Mercer Marsh Benefits

In several countries around the world, governments are mandating employers to do more to manage psychosocial risks in the workplace.

Australia has been particularly progressive in this regard. In recent years, its governments has introduced several major pieces of legislation aimed at ensuring employers improve their psychosocial health and safety practices, including the ISO 45003 standard in 2021. Most recently, it added the ‘right to disconnect’ amendment to the country’s Fair Work Act 2009, which entitles employees to refuse contact from their employers outside their working hours^[4]

The government in Mexico has also been active in recent years. In 2018, it published NOM-035, legislation that compels employers to implement, maintain and disseminate a psychosocial risk policy and to adopt measures for the prevention of psychosocial risk factors — including psychological assessments of workers exposed to these risks.^[5]

Legislation such as this underscores the need for employers to address psychosocial risks in the workplace, but it is important to recognise that simply complying is not enough. Mental health should never be seen as a ‘tick box’ exercise. Organisations need to go above and beyond their legal duties if they are to truly safeguard the mental health of their employees.

In 2023, MMB worked with a local government agency in Australia to help address gaps in how they were managing psychosocial risks and mental health. A team of experienced psychologists developed and delivered a three-stage mental health solution to support the agency at all levels. This included:

Mental health awareness workshops for more than 300 employees, designed to increase mental health awareness, reduce stigma and empower individuals to reach out to colleagues who may need support.
Training for over 120 leaders aimed at increasing their skills and confidence in navigating mental health challenges within their teams and ensuring they were meeting their legal obligations in this space.
Mental health first aid training to 60 employees, who now provide an additional layer of support across the organisation — particularly for those experiencing a mental health crisis.

Following the success of the program, further training will be delivered throughout 2024 and 2025 to more of the agency’s staff, including new recruits.

In Mexico, MMB worked with a large national retailer that was experiencing mental health concerns among its 75,000 employees, including increases in anxiety, depression and suicide attempts. To understand the issues faced by different employee groups, they designed and implemented a tool to screen psychosocial risks, segmented by zone, business unit and employee type— achieving a participation rate of over 70%. MMB worked with the retailer to analyze these risks, building a strategy to address the most significant hazards in each part of the business, including protocols to help leaders recognize the indicators of emotional distress, quickly identify symptoms and ensure their employees were able to access the support they needed. The program saw a 20% increase in employee assistance program utilization from staff, together with a decrease in the number of mental health ‘red flags’ reported.

Taking a joined-up approach to managing psychosocial risk

In summary, it is important to take a holistic, ‘integrated’ approach to managing psychosocial risks in the workplace. By raising awareness, conducting comprehensive risk assessments, implementing tailored mitigation strategies and building robust care pathways, employers can create healthier, more supportive work environments that promote employee mental well-being. This will not only benefit individual workers but also enhance organizational resilience, productivity and long-term success.

¹ MMB. Health Trends 2025, 2024

² MMB. People Risk 2024 report, 2024

³ C. Song, G. Wang and H. Wu. “Frequency and barriers of reporting workplace violence in nurses: An online survey in China,” International Journal of Nursing Sciences, Volume 8 Issue 1 (2021), pp.65–70

⁴ Australian government Fair Work Ombudsman. “Right to disconnect,” available at www.fairwork.gov.au

⁵ American Bar Association. “MEXICO - NOM-035 on Psychosocial Risks Takes Effect,” available at www.americanbar.org

Protecting the health and safety of employees is a central pillar of any people strategy. Employers need to ensure they have robust policies and procedures in place to safeguard the wellbeing of their workforce — including their mental health.

Raise awareness and understanding of psychosocial risk factors

Identify psychosocial risks through employee listening

Protect and promote mental health at work by managing risks

Figure 1: Work factors impact employee health

Build better care pathways

Figure 2: The mental health care continuum

Taking a joined-up approach to managing psychosocial risk

About the authors

Dr. Octavio Gascón Enriquez MD, PsyD, MS

Gretchen Masters

Key Solutions

Employee health & benefits

Workforce resilience and wellbeing

Corporate wellness programs

Related insights

People Risk 2024

Thriving beyond burnout - Three recommendations for improved employee mental health

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The unseen threat: Tackling psychosocial risk in the workplace

Protecting the health and safety of employees is a central pillar of any people strategy. Employers need to ensure they have robust policies and procedures in place to safeguard the wellbeing of their workforce — including their mental health.

Raise awareness and understanding of psychosocial risk factors

Identify psychosocial risks through employee listening

Protect and promote mental health at work by managing risks

Figure 1: Work factors impact employee health

Build better care pathways

Figure 2: The mental health care continuum

Taking a joined-up approach to managing psychosocial risk

Speak with a Mercer Marsh Benefits consultant

Health Trends 2025 report

About the authors

Dr. Octavio Gascón Enriquez MD, PsyD, MS

Gretchen Masters

Key Solutions

Employee health & benefits

Workforce resilience and wellbeing

Corporate wellness programs

Related insights

People Risk 2024

Thriving beyond burnout - Three recommendations for improved employee mental health