Is Cost a Deciding Factor in Psychosocial Risk Management?

When organisations begin to implement controls for psychosocial hazards - like job demands, occupational violence, job controls or workplace conflict - cost is often one of the biggest concerns raised.

“How much will this cost?”

“Can we afford the control measures?”

“Is it worth the investment?”

These are valid questions, but they’re often misunderstood when it comes to legal obligations under Work Health and Safety (WHS) laws.

Let’s clear things up.

What Does the Law Say About Cost?

Under WHS legislation across Australia, employers have a duty to eliminate or minimise risks to psychological health as far as is reasonably practicable. This includes addressing a wide range of psychosocial hazards that may impact workers’ psychological health.

The concept of “reasonably practicable” is central here. It means what can be reasonably be done to manage risk taking into account a range of factors, not just cost.

Cost Is Considered, But Not First

According to WHS law, determining what is reasonably practicable involves a step-by-step consideration of the following:

1. The likelihood of the hazard or risk occurring.

2. The degree of harm that might result.

3. What is known (or ought to reasonably be known) about the hazard and ways to manage it.

4. The availability and suitability of control measures.

5. The cost of those measures.

Cost is the final factor to consider, and only after effective and suitable control measures have been identified. In other words, cost is one factor, but not the deciding one.

What About When Cost Is a Barrier?

It’s not uncommon for businesses to feel daunted by the perceived cost of managing psychosocial risks. But the law is clear: if a control measure is effective and suitable, cost can only be a legitimate barrier if it is grossly disproportionate to the level of risk. Saying “we can’t afford it” is not an excuse for inaction when serious or known risks are present.

If the ideal control is too expensive, you are still expected to act. That might mean implementing alternative controls that are less costly but still reduce the risk as much as possible.

Financial Constraints Don’t Lower the Bar

Your financial capacity does not change your WHS duties. The obligation to manage psychosocial risks still applies, regardless of your size, budget, or sector.

There are also other considerations to keep in mind:

• Psychosocial hazards often interact. Controlling one can improve several others.

• More than one control may be necessary for effective risk reduction.

• Early action typically costs less than dealing with the consequences of psychological injury, staff turnover, or legal claims.

There is also a strong business case for investing in psychosocial safety. Research consistently shows positive returns on investment from proactive psychological health and safety measures.

So, What Should You Do?

The goal isn’t perfection or overspending. It’s about taking reasonable, proportionate action based on the level of risk and what is reasonably practicable.

Need help navigating what's considered reasonably practicable for psychosocial hazards? Get in touch at info@safeworkpsychology.com.au