How are NSW businesses tracking when it comes to mental health?

NSW businesses can significantly boost their productivity and bottom line by building psychological resilience into their work culture.

smiling waitress helping out a customer

Creating a “safe workplace” once meant protecting workers against physical injury. Now employers are also focused on how to keep workers safe from psychological harm and supporting them when something goes wrong. In this series on mental health at work, icare workers insurance looks at the latest data on psychological injury claims in NSW and explores the evidence on how employers can get the best results for their business when it comes to mental health in the workplace. Both before and after a claim. 

The percentage of psychological injury claims lodged with the NSW Government’s Nominal Insurer — now icare workers insurance — has been virtually the same each year over the past five years. From an annual low of 3.25 per cent to a high of 3.59 per cent, the psychological claims lodged from 2013 to 2017 represented 3.5 per cent [1] of total claims. 

While this steady line may run counter to the expectations of some employers, icare-wide data shows that the likelihood a business will incur a psychological injury claim depends on the type of business it is. Rates are higher for workers in certain industries, while total average figures remain steady across the 300,000 businesses insured with icare workers insurance — the majority of businesses in NSW.

The biggest risks

Within this group of 300,000 businesses — importantly, this does not include public sector agencies, where psychological injury claims are rising [2] — the workers most vulnerable to psychological injury worked in the finance and insurance industry, with psychological injuries representing 15 per cent of all icare workers insurance claims for that industry during the five-year period. 

Workers in the health and community services industry were also more at risk, with psychological claims representing seven per cent of total industry claims. Health and community services also represented the largest volume of claims [3], with 21 per cent of all psychological claims lodged with icare workers insurance over the five-year period. This was followed by the property and business services industry (15 per cent of all psychological claims lodged with icare workers insurance) and the retail trade (10 per cent). 

The most common psychological injury during the period was anxiety stress disorder (45 per cent of all psychological claims), which is in line with the National Survey of Mental Health and Wellbeing, followed by depression (20 per cent) and reaction to stressors (15 per cent). 

Work-related harassment or bullying was by far the most common cause of injury (39 per cent of all psychological injury claims), followed by work-related pressure (26 per cent) and exposure to trauma (15 per cent). Again, these findings are in line with national figures.

Within this group of 300,000 businesses — importantly, this does not include public sector agencies, where psychological injury claims are rising  — the workers most vulnerable to psychological injury worked in the finance and insurance industry, with psychological injuries representing 15 per cent of all icare workers insurance claims for that industry during the five-year period.   Workers in the health and community services industry were also more at risk, with psychological claims representing seven per cent of total industry claims. Health and community services also represented the largest volume of claims , with 21 per cent of all psychological claims lodged with icare workers insurance over the five-year period. This was followed by the property and business services industry (15 per cent of all psychological claims lodged with icare workers insurance) and the retail trade (10 per cent).   The most common psychological injury during the period was anxiety stress disorder (45 per cent of all psychological claims), which is in line with the National Survey of Mental Health and Wellbeing, followed by depression (20 per cent) and reaction to stressors (15 per cent).   Work-related harassment or bullying was by far the most common cause of injury (39 per cent of all psychological injury claims), followed by work-related pressure (26 per cent) and exposure to trauma (15 per cent). Again, these findings are in line with national figures.

Counting the cost

The cost of mental ill-health to NSW businesses is much higher than suggested by the five-year average for psychological claims with icare workers insurance (3.5 per cent all claims):

  • First, the five-year data also shows that the average cost of a psychological injury claim with weekly payments was twice as high as that of a physical injury claim with weekly payments. This was because twice as much work time was lost, on average, for a psychological injury claim as for a physical injury claim. Costly mental health claims have a negative impact on the premiums of medium and large businesses in NSW [4], and can undermine productivity and staff retention in any business where they indicate a broader problem in the workplace culture.
  • Second, claim submission rates may not be a true reflection of the actual incidence of psychological injury: the literature refers to indications of under-reporting, for example, among casual employees, which may be linked to fears about job tenure [5]. 
  • Third, and most importantly, claims represent only one end of the full spectrum of mental health operating in any workforce. Whether a mental illness is caused by work or not, and whether it results in a workers compensation claim or not, the national data tells us that one in five Australians over 16 will experience a mental illness in any one year [6]. These people are represented in businesses across NSW and their experience at work will have a significant impact on how quickly they become well again and fully productive at work. 

The total annual cost to NSW employers of mental ill-health at work — through extra sick days taken (absenteeism) and reduced productivity at work (presenteeism) — is currently estimated to be $2.8 billion per annum. [7] 

The other side of that coin is that investing in psychological safety at work can provide a substantial return: estimated at $1.50 to $4 for every $1 spent. [8]

What do I need to know?

There are two clear messages for employers in the latest icare data on psychological injury and the broader evidence base on mental health at work in NSW:

  • The ongoing incidence of relatively long and expensive psychological injury claims provides a strong incentive for NSW employers to better support injured workers to recover at work or get back to sustainable work more quickly.
  • The high incidence of mental ill-health in the society and the workforce means that NSW businesses can significantly boost their productivity and bottom line by building psychological resilience into their work culture.

The next article in icare’s mental health at work series explores how employers can increase productivity by building a more psychologically resilient workplace culture.

References

[1] These statistics are for the NSW Government’s Nominal Insurer, represented by icare since 2015 and by WorkCover in earlier years.

[2] Rates are rising in public sector agencies due to higher rates for workers experiencing occupational violence and trauma (e.g. emergency service first responders, police, teachers).

[3] Volume is significantly affected by the size of the industry, with larger industries likely to generate more claims.

[4] Small businesses do not incur increased premium pricing based on number of claims.

[5] LaMontagne A, Keegel T, Louie AM & Ostry A (2010). Job stress as a preventable upstream determinant of common mental disorders: A review for practitioners and policy-makers. Advances in Mental Health, 9(1), 17-35.  

[6] Australian Bureau of Statistics 2008, National Survey of Mental Health and Wellbeing: Summary of Results, 4326.0, ABS, Canberra.

[7] SafeWork NSW, Mentally Healthy Workplaces in NSW, Return on Investment Study, 19 October 2017.

[8] According to SafeWork NSW’s study Mentally Healthy Workplaces in NSW, investment in workplace health promotion stress management, and psychological focused return to work programs, produce a positive return on investment of between $1.50 and $4 for every dollar spent.