Wellbeing in the workplace is a leadership priority
Creating a healthy workplace is no longer optional these days. For leaders, actively supporting wellbeing in the workplace beyond just physical safety is a strategic investment that can uplift performance, retention, reputation and resilience and benefit the entire organisation.
The human and economic cost of neglect
Poor workplace wellbeing carries both human and business costs. In Australia, mental health conditions already account for a growing share of workers’ compensation claims; for instance, Safe Work Australia states psychological injury claims represented 9 per cent of serious compensation claims in 2021–22, and the median time lost is more than four times that of physical injuries. The Productivity Commission estimated direct economic costs of poor mental health in Australia at between A$43 billion and A$70 billion, plus an additional A$151 billion arising from disability and premature death. On a practical level, organisations see higher absenteeism, presenteeism (people at work but under-performing), turnover, workers’ compensation costs and reputational risks (Comcare).
One in five Australians have had time off work due to feeling mentally unwell over the past year, according to State of Workplace Mental Health in Australia.
Wellbeing in the workplace affects performance
Research shows that employees who feel psychologically safe, supported and healthy are more engaged, more creative and more likely to contribute discretionary effort. “Psychological safety positively influences employee engagement because a more comfortable environment is created where close team connection exist, good relationships with superiors (supervisor/manager/boss) can increase employee engagement. Employees will be more motivated to work to the fullest physically, cognitively, and emotionally,” one study states.
Incorporating wellbeing practices strengthens morale, loyalty and productivity, according to WorkSafe Queensland.
Leaders set the tone
When senior decision-makers visibly champion wellbeing, other managers and staff follow. Safe Work Australia notes that when you make work health and safety a priority, workers are more likely to make it a priority too.
A recent paper on building a culture of healthy living emphasises that leaders who role-model healthy behaviours and ensure resources are accessible can shift the organisational climate toward one where wellbeing is normalised.
How leaders can support wellbeing in the workplace
Lead by example
Be transparent about your own wellbeing practices, such as taking breaks and managing boundaries. Prioritise psychological safety by encouraging open dialogue about stress, burnout or mental health without stigma. Additionally, publicly support wellbeing initiatives by participating and allocating time and resources.
Build structure and systems
Wellbeing shouldn’t rely on ad hoc perks. It’s not enough to buy your team lunch once a year.
To sustain true wellbeing programs, embed it in systems. Integrate wellbeing into strategic plans, key performance indicators, budgets and performance metrics, ensuring it comes from the top down.
It’s also important to conduct needs assessments or employee surveys to understand pain points and priorities, rather than just guessing. That way, you can design systems to monitor, evaluate and reinforce wellbeing initiatives so they evolve with employee needs. Plus, you can align policies such as leave, flexible working and return-to-work arrangements with wellbeing objectives.
Train and support managers
Line managers are the frontline of wellbeing and they are required to balance delivering results with caring for people. According to the National Workplace Initiative, managers need tools, confidence and capability to promote psychologically healthy workplaces.
Provide training in recognising early signs of distress, having supportive conversations, coaching, workload management and boundary-setting, and referring to services such as employee assistance programs and counselling when needed.
Create a multi-dimensional wellbeing program
To reach diverse needs, a holistic program should address psychosocial health (for example, stress management workshops and mental health literacy), physical health (movement, ergonomic assessments), work design (clarity of roles, autonomy) and connectedness and purpose (inclusive culture, recognition, meaningful work). Engage employees in co-design so the offerings reflect what people genuinely value.
Focus on early intervention and support
Address issues before they become crises. Use regular check-ins, pulse surveys or wellbeing “health checks”. Normalise and promote use of counselling, coaching and peer support. Provide clear pathways for help and ensure confidentiality. The Mental Health Commission recommends that executives and decision-makers acknowledge unique stress and provide tailored supports.
When wellbeing thrives, everyone benefits
When leaders invest seriously in wellbeing in the workplace, the gains are felt across all levels. Lower absenteeism and compensation costs come through fewer sick days, faster return to work and reduced claims. “In workplaces that employees consider mentally healthy, self-reported absenteeism as a result of experiencing mental ill-health almost halves…”
Productivity and engagement improve, talent retention strengthens, and organisations become more resilient and adaptable. A culture of trust and psychological safety emerges, legal risks reduce and the organisation’s reputation improves.
Wellbeing initiatives are a positive investment in performance, culture and long-term sustainability and fundamental for a thriving organisation.