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Why Both Are Essential for High-Performing, Healthy Teams
When we work with leaders across Australia and New Zealand, one thing is clear: there’s a lot of conversation about workplace wellbeing right now. But often, important terms like psychological safety and psychosocial risk are confused—or worse, used interchangeably.
While they’re deeply connected, they are not the same thing. In fact, understanding the difference is crucial for organisations that want to build healthy, high-performing cultures.
At Steople, we work with organisations every day to unpack these concepts, applying the latest organisational psychology research to drive real, lasting change.

First, What’s Psychological Safety?

Coined by Harvard Professor Amy Edmondson, psychological safety is the belief that you won’t be punished, humiliated, or ignored for speaking up with ideas, questions, concerns, or mistakes.
In a psychologically safe workplace, people feel empowered to:
  • Challenge the status quo
  • Share bold ideas
  • Admit mistakes without fear
  • Ask for help when needed
Research consistently shows that psychological safety is one of the strongest predictors of team performance, innovation, and resilience. Google’s famous “Project Aristotle” found that psychological safety was the number one factor distinguishing high-performing teams.
Simply put, when people feel safe, they are more engaged, more collaborative, and more creative.

And What’s Psychosocial Risk?

Psychosocial risks refer to factors in the workplace that could cause psychological harm. This includes things like:
  • High job demands without support
  • Workplace conflict and incivility
  • Poor change management
  • Lack of role clarity
  • Discrimination, harassment, and bullying
In Australia, new WHS regulations and Codes of Practice now legally require organisations to manage psychosocial risks. Similarly, in New Zealand, the Health and Safety at Work Act 2015 emphasises the duty to ensure both physical and mental wellbeing at work.
Unmanaged psychosocial risks can lead to:
  • Stress and burnout
  • Anxiety and depression
  • Reduced productivity and performance
  • Increased absenteeism and turnover
In short: psychosocial risks undermine employee wellbeing and organisational effectiveness—and ignoring them is no longer an option.

The Key Difference (And Why It Matters)

Think of it like this:
  • Psychological safety is the outcome we want—an environment where people feel safe and supported.
  • Psychosocial risk is the hazard we need to identify and manage—the factors that threaten that safety.
One is about building positive conditions; the other is about eliminating harmful ones.
At Steople, we often explain it to clients like a garden:
  • Managing psychosocial risks is like removing weeds and nurturing healthy soil.
  • Building psychological safety is about planting seeds, watering growth, and fostering a thriving ecosystem.
You need both to create a healthy, high-performing workplace.

What the Research Tells Us

Leading organisational psychology research shows that:
  • Psychological safety acts as a buffer against the negative impacts of psychosocial risks. (Newman et al., 2017)
  • Teams with high psychological safety recover more quickly from stressful events, showing greater resilience.
  • Employees in psychologically safe environments are 50% more likely to stay with their organisation and 67% more likely to recommend it as a great place to work (McKinsey, 2021).
  • Managing psychosocial hazards reduces mental health claims and improves overall organisational performance (Safe Work Australia).
In other words: it’s not enough to manage risks. If you want a workplace that thrives, not just survives, you must also actively cultivate psychological safety.

How Steople Supports Organisations Across Both Dimensions

At Steople, we take an integrated, evidence-based approach to building better workplaces. Our work spans both:
 Psychosocial Risk Management
  • Conducting psychosocial risk audits and organisational diagnostics
  • Designing tailored action plans to eliminate or mitigate hazards
  • Supporting compliance with WHS legislation and codes of practice

 

 Building Psychological Safety
  • Leadership development programs focused on emotional intelligence, inclusive leadership, and feedback culture
  • Team coaching interventions that build trust, accountability, and open dialogue
  • Culture transformation initiatives that embed respect, wellbeing, and collaboration into everyday behaviours

 

We also use tools like the Steople Leading for Performance & Wellbeing Survey™ to capture a complete picture of both risks and strengths—giving organisations a clear roadmap for change.

Thriving Workplaces Start with Both

In today’s dynamic, complex world, performance and wellbeing are two sides of the same coin. Organisations that lead the future will be those that:
  • Proactively manage psychosocial risks, and
  • Intentionally build cultures of psychological safety.
If you want to create a workplace where people are safe, inspired, and set up to perform at their best, we’re here to help.
 Ready to strengthen your workplace culture? Let’s talk: info@steople.com.au