The Power of Psychological Safety in the Workplace: Increasing Revenue and Employee Engagement

In today's rapidly changing business environment, companies that prioritise the well-being of their employees and create a culture of psychological safety are more likely to thrive.

Psychological safety refers to the perception of feeling safe to take interpersonal risks within a group, without fear of negative consequences. This concept has gained significant attention in recent years due to its enhanced employee engagement and improved business & financial outcomes.

Studies have found that creating a psychologically safe workplace has increased employee engagement, which has been linked to higher productivity, innovation, and profitability.

According to a study by Gallup, companies with high employee engagement levels have 21% higher profitability than those with low levels. The Gallup studies continue to state that disengaged employees cost the country around $54.8 billion (AU) annually.

Another study by Google found that teams with high levels of psychological safety are more likely to be productive and innovative, with employees reporting higher levels of job satisfaction and well-being.

Investing in creating a psychologically safe workplace not only leads to better employee engagement but can also have a direct impact on a company's bottom line. Research has found that companies that invest in the well-being of their employees see a return on investment of up to 6:1. For example, a study by Deloitte found that organizations that prioritise well-being and mental health see a 40% reduction in employee turnover, which can save companies significant costs associated with recruitment and training.

Several organisations have already started to invest in creating a psychologically safe workplace, with impressive results. For example, Airbnb has implemented a program to train managers on how to create a psychologically safe workplace, resulting in a 24% increase in employee engagement. Another example is Microsoft, which has implemented a program to encourage employees to speak up and share their ideas, resulting in a 10% increase in revenue.

It's not just large corporations that are investing in psychological safety either. Australian company, Lendlease, implemented a program to support the mental health of their employees, resulting in a 45% reduction in absenteeism and a 53% reduction in workers' compensation claims.

The link between psychological safety and mental health is also important to note. In Australia, mental health costs businesses an estimated $11 billion per year, with a significant portion of this cost resulting from workplace stress. Creating a psychologically safe workplace can help reduce workplace stress and promote mental well-being, leading to a more engaged and productive workforce.

In conclusion, prioritising psychological safety in the workplace is not only the right thing to do for employees but also makes good business sense. By investing in creating a culture of psychological safety, companies can increase employee engagement, improve business outcomes, and promote mental well-being. As we continue to navigate a rapidly changing business environment, companies that prioritize psychological safety will be the ones that succeed.