psychological safety boosts your bottom line
psychological safety boosts your bottom line

Psychological Safety Boosts Your Bottom Line

Elle Tsivka |

Empowering Your Employees Creates a Win-Win

Imagine a workplace where employees feel secure enough to voice their ideas, share their concerns, and engage openly without the fear of negative repercussions — sounds like a dream, right? It is not a distant reality, but rather a tangible goal known as psychological safety, and its importance is more critical than ever. According to the American Psychological Association’s 2024 “Work in America Survey,” only 18% of employees in psychologically safe environments felt their workplace negatively impacted their mental health, compared to a staggering 57% among those in environments considered less safe.

Psychological safety at work is not a simple shield against harm like a hardhat; rather it’s a culture where workers feel comfortable speaking up and discussing difficult issues. And the phenomenon goes beyond safety, impacting areas like workplace productivity, satisfaction, and your company’s bottom line. Let’s dive in.

psychological safety

The Cost of Psychologically Unsafe Workplaces

While the human and ethical costs of psychologically unsafe workplaces often serve as focal points, the financial and operational impacts can be equally as devastating.

The Negative Impact on Employee Wellbeing

A study published by the National Library of Medicine (NIH) underscores a direct relationship between a toxic workplace and employee engagement. This research highlights toxic behaviors in the workplace, i.e., harassment, bullying, and ostracism, can wreak havoc on employees, leading to unnecessary stress, burnout, depression, and anxiety. The damage doesn’t stop at individual mental health; team morale and motivation take a significant hit, fostering a work culture where fear and silence dominate over openness and collaboration.

Increased Employee Turnover & Absenteeism

The toll on employee wellbeing often translates into increased turnover and absenteeism. Employees who feel undervalued and unsupported are more likely to consider leaving their jobs, leading to higher attrition rates. According to the American Psychological Association, a staggering 41% of employees in psychologically unsafe environments intend to look for a new job within the next year, compared to just 19% in safer workplaces.

Damage to Company Reputation

According to the NIH study, “the direct relationship between a toxic workplace environment and employee engagement confirms that if employees are working in a toxic environment, they will spread negative feelings among other co-workers.”

These negative sentiments often spill into public platforms, leading to detrimental reviews and word-of-mouth. This may tarnish an organization’s brand, deterring potential recruits, clients, and partners. The impact goes beyond immediate recruitment challenges, threatening long-term business prospects and necessitating significant investment and time to repair.

psychological safety

Addressing the Issue

To mitigate the impact of psychologically unsafe workplaces, organizations must prioritize creating a culture of psychological safety. Some strategies to foster such an environment include, but are not limited to:

Leadership Commitment

Leaders play a vital role in setting the tone, serving as role models by promoting open communication, actively listening to employee feedback, and addressing concerns promptly and transparently. Amy Edmondson, PhD, the Novartis professor of leadership and management at Harvard Business School, emphasizes that “Leaders must prioritize a culture of learning and innovation for team members to be comfortable speaking up, taking risks, and sharing information. This does not happen by default. It emerges with effort, curiosity, and care.”

speak up assessment tool

Key strategies for leaders fostering a psychologically safe workplace include:

  • Ethics Hotlines: Establish anonymous ethics hotlines to give employees a secure channel for reporting unethical behavior without fear of retaliation.
  • Compliance Training: Regularly conduct compliance training to educate staff on acceptable workplace behaviors and legal standards.
  • Recognition & Appreciation: Regularly acknowledging hard work and celebrating successes cultivates a sense of belonging and trust, enhancing overall job satisfaction.

Embracing these approaches enables organizations to create environments where employees feel valued and empowered to contribute their best ideas, ultimately enhancing both employee well-being and overall organizational success.

Training

Organizations can effectively address psychological safety by investing in comprehensive training programs. By offering courses and microlearning on topics like:

  • Ethics & Compliance
  • Employment Law
  • Diversity, Equity, & Inclusion
  • Hotline Learning
  • Health & Safety
  • Cyber Security
  • Business Skills

Companies empower employees to navigate challenging situations and promote mutual respect. Training that incorporates elements such as active listening, constructive feedback, and the critical role of managers in fostering a supportive environment equips team members with the tools they need to contribute positively, ensuring a culture where everyone feels valued and heard.

Regular Feedback

To enhance psychological safety, organizations should implement robust feedback mechanisms. Introducing regular surveys, focus groups, and one-on-one discussions provides employees with a secure platform to voice their opinions, raise concerns, and suggest improvements without fear of repercussion.

These consistent feedback channels foster a culture of open communication and continuous improvement, ensuring that employees feel heard and valued. By prioritizing regular feedback, organizations can create an environment where everyone is empowered to speak up and contribute to collective success.

psychological safety
roi of good company culture

The ROI of Psychological Safety

Investing in psychological safety isn’t just about employee well-being; it’s a strategic business decision with substantial returns. Beth M. Schwartz, PhD, associate director in the Office of Applied Psychology at APA, noted, “[Psychological safety] allows us to learn what smart and talented team members really bring to the table, and ultimately, leads to more productive organizations.” Research supports this, indicating that organizations with psychologically safe workplaces see higher levels of employee engagement, retention, and innovation. These environments empower employees to contribute their best ideas, driving creative solutions and breakthroughs.

Financially, the benefits are clear. Enhanced employee engagement and innovative outputs lead to improved productivity and customer satisfaction, translating into better financial performance. In essence, fostering psychological safety is a win-win, benefiting both employees and the bottom line.

psychological safety

Transform Your Workplace, Transform Your Bottom Line

By fostering an environment where employees feel valued and secure, companies unlock higher levels of engagement, innovation, and retention. This not only leads to improved productivity and customer satisfaction but also translates into tangible financial success.

Ready to take your organization to the next level? Invest in Mitratech’s psychological safety courses to cultivate a collaborative, innovative, and productive work environment. With our expert-led programs, you’ll equip your teams with the tools they need to thrive both personally and professionally.