“We don’t have time for another leadership program.”

It’s something we hear often from leaders under pressure. The constant change happening in organisations, managing heavy workloads, trying to keep their teams engaged through uncertainty; it’s no wonder leaders feel like they have no space for anything else.

The funny thing is, it’s these same pressures that are the very reason learning to develop leadership capability matters more than ever.

According to the AHRI Psychosocial Risks Report 2025, just 28% of employers say they invest in leadership and management capability to improve psychosocial health in their organisation. Yet those who do are seeing remarkable results — reduced claims, higher wellbeing scores, and stronger engagement.

So why does leadership matter so much when it comes to psychosocial safety?

The emotional ripple effect of leadership

Research in organisational psychology consistently shows that leaders set the emotional tone of the workplace.
The Job Demands–Resources Model (Bakker & Demerouti, 2017) tells us that when leaders manage demands and boost resources — such as support, autonomy, and recognition — employees are more likely to experience higher levels of engagement rather than stress and burnout.

Conversely, when leaders are under-equipped to lead their teams well, the ripple effect can be damaging: unclear communication, employees who feel overworked, an increase in conflict, all of which can quickly erode trust and wellbeing.

In fact, studies by Kelloway and Barling (2010) found that transformational leaders — those who show empathy, provide clarity, and build psychological safety — significantly reduce employee stress and emotional exhaustion.

Leadership capability isn’t just a “nice-to-have.” It’s a psychological buffer.

Leadership in the age of psychosocial risk

Today’s leaders face a complex landscape: hybrid work, automation, role ambiguity, and heightened expectations of care.

The AHRI report highlights that the top psychosocial risks including high job demands, poor relationships, and lack of role clarity, all sit squarely within a leader’s sphere of influence.

When leaders have the skills to manage workload conversations, mediate conflict, and create clear role expectations, they’re actively reducing psychosocial risk.

That’s why at Steople, we work with organisations to develop leaders who can:

• Recognise early signs of distress and respond with empathy

• Communicate with clarity during change and uncertainty

• Foster trust and civility in team relationships

• Balance performance with wellbeing

Through our Leadership Development Programs, 360° Assessments, and Coaching for Behaviour Change, we help leaders move from reactive to proactive, from firefighting to foresight.

Psychosocial risk management isn’t about removing pressure; it’s about equipping people to navigate it safely and practively.

The data behind the difference

When leadership capability improves, the ripple effect shows up everywhere:

• Teams report higher trust and engagement (Edmondson, 2019)

• Organisations see lower turnover and absenteeism

• Cultures become more open, inclusive, and adaptive

Our own work at Steople reflects these outcomes. When clients integrate leadership assessment and targeted coaching, we see measurable improvements in team climate and wellbeing scores, often within months.

Data gives leaders insight. Coaching gives them the confidence. Together, they build cultures where people feel safe, supported, and seen. All the key ingredients to a great culture and successful business.

From compliance to capability

The new psychosocial regulations have led many organisations to act reactively — reviewing policies and conducting risk assessments. That’s a good start. But as AHRI and DLPA point out, psychosocial health isn’t a compliance issue — it’s a performance issue.

Compliance prevents harm.
Capability creates value.

When leaders are empowered to manage psychosocial risks with empathy, communication, and evidence-based skill, they don’t just protect wellbeing, they amplify it.

At Steople, we see leadership development not as a “program” but as an investment in sustainable success through people.

The takeaway

Psychosocial safety doesn’t start in HR or policy manuals.
It starts in conversations — between leaders and their teams, between insight and action.

If only 28% of organisations are building leadership capability to support psychosocial health, that means 72% are leaving their greatest opportunity untapped.

It’s time to close that gap.
Because when leaders grow, people flourish, and when people flourish, so does the organisation.