Handle with care: How psychosocial risks reduce when organisational change is done well

Addressing psychosocial harm has become a critical priority as employees increasingly articulate how these risks manifest, particularly during periods of organisational change. While psychosocial risks and their impacts on mental and physical wellbeing are not new concepts, it is how modern leaders interpret and address them that requires a fundamental shift in both language and mindset.

In this article, we examine strategies to mitigate psychosocial risks during organisational change and divulge strategies for leaders to initiate tangible change communication to build psychosocially safe workplaces.

To address these critical questions, we consulted with our Senior Workplace Relations Advisor, John Brennan, who brings extensive experience helping businesses identify risk factors and coaching leaders to recognise key warning signs that require monitoring during change initiatives.

To understand which risk factors trigger disputes during organisational change processes, leaders must first understand psychosocial harm at its foundational level.

What constitutes psychosocial harm in the workplace?

According to our expert, psychosocial harm manifests when employees experience anxiety, a sense of overwhelm and lethargy, anger, or sadness. Any emotional state that drives unwanted behaviours in the workplace.

Harm caused by psychosocial risks stems from an ‘overactive amygdala’, a state of heightened reactivity to situations of fear and dread, often accompanied by thoughts of failure, humiliation and inadequacy. When employees experience these risks, they typically exhibit one of three distinct emotional responses:

1.    Fight – The state of resistance

Employees in ‘fight’ mode actively resist change processes and may sabotage any change initiatives. They create disputes around evolving processes and systems, viewing change as a threat.

2.    Flight – The state of escapism

During this stage, employees seek to escape the changing environment through avoidance behaviours. This can be noticed through increased sick leave usage, disengagement from responsibilities, or in severe cases, resignation from the organisation.

3.    Freeze – The state of reactive immobility

The ‘freeze’ response manifests as presenteeism and chronic deadline failures. Employees remain stuck during change, failing to complete tasks effectively, which directly impacts team productivity and organisational performance.

As a leader, understanding change’s psychological impact on your workforce is critical. Leaders must help employees conceptualise change as a tangible, manageable process by addressing fundamental questions:

• What does this change actually mean for daily operations?
• What new responsibilities will employees assume moving forward?
• What current activities they will discontinue?
• Most importantly, what remains constant after this transition?

However, leaders need to be thoughtful when communicating organisational change initiatives, as if they falter, it can inadvertently amplify psychosocial risks rather than mitigate them.

Managing Organisational Change and Innovation: The Leadership Imperative

To drive effective organisational change, leaders need to remain grounded and intentional when describing initiatives and communicating them to their workforce.

Leaders must contextualise organisational change rather than becoming swept up in the excitement of transformation itself. Through extensive experience assisting organisations with change implementation, we’ve identified a concerning pattern: leaders who focus disproportionately on the change are unnecessarily overwhelming employees who feel unprepared.

In many cases, the actual change might only affect 5-10% of an employee’s daily responsibilities, yet it spreads stress and anxiety throughout the organisation.

When change lacks careful management, the organisational climate becomes destructive, as the scope of change magnifies to a greater extent in the employees’ eyes.

Therefore, leaders must clearly articulate what is changing, what requirements are being eliminated, what practices continue unchanged, and what behaviors to avoid.

Our expert encourages leaders to consider two critical behaviours when approaching organisational change:

1. Avoid polarised leadership approaches during change

The Overly Optimistic Trap: Many leaders adopt an overly optimistic stance when discussing organisational change, overselling the benefits and emphasising how transformation will drive growth. Rather than focusing on practical work implications, leaders concentrate on overselling advantages at the frontline level. Employees just need clarity about personal impact.

This overly optimistic narrative proves counterproductive by creating unrealistic expectations and skepticism.

The Pessimistic Pitfall: Conversely, the overly pessimistic approach catastrophises everything, infusing discussions with negative language that creates employee distress. Phrases like “if we don’t implement this, we’ll go out of business” instill fear and unease within the organisational culture. Our expert emphasises that pessimistic leadership demonstrates a leader’s own fears, which proves more damaging than optimistic practices.

2. Be tangible when discussing organisational change and development

Culture is the by-product of effective work practices and team engagement. Attempting to change culture through transformation confuses employees and risks losing their engagement entirely. Instead, leaders should focus on more tangible discussions: tasks, processes, technology, and applications.

Maintain organisational change conversations at the sensory level—discuss what employees can see, hear, feel, touch, and experience. Avoid abstract descriptions of change, as vague leadership messaging triggers withdrawal from employees.

When leaders cannot articulate change in concrete terms and resort to abstract language, it signals a lack of understanding of the change itself.

Effective change leadership requires balancing realistic communication with practical specificity, ensuring employees understand the implications and rationale behind change.

So, how can leadership be held accountable in driving organisational change?

The role of HR in organisational change

When we talk about leadership accountability with change, the role of HR is an important piece of the puzzle.

It can be a very tricky line for HR to tread, as some leaders avoid confrontation or simply dislike being challenged about their preferred change narrative. However, as HR professionals, it’s important to play the role of a honest broker during organisational change.

HR practitioners should be connected to frontline leaders.  The frontline will quickly deliver feedback if they believe that messaging is too abstract. They are the ones who are most attuned to whether the change is penetrating within their teams or not.

An article published in the Harvard Business Review nearly 30 years ago sums up this intention clearly. The article dives into how frontline team leaders have to be fully immersed in the change because they’re often considered to be the most believable people in the organisation who are selling the change. Therefore, this reinforces the need for HR to act as a backbone to the frontline team and identify key challenges to support a smooth facilitation of organisational change.

Building a successful organisational change plan: The SCRAF method

The SCARF model serves as a critical tool for leaders to enhance employee intrinsic motivation and engagement during organisational change. Developed by Dr. David Rock, this neuroscience-based framework identifies five psychological factors at risk when employees feel threatened: Status, Certainty, Autonomy, Relatedness, and Fairness.

Our expert recommends following this checklist to help build a robust change framework that looks at five core social domains:

1.    Status

Problem: The person’s organisational standing becomes undermined or threatened by change initiatives. Status threats often emerge first during transformation, as employees question their relative position and influence within the evolving structure.

Solution: Clearly communicate how roles will evolve rather than diminish.

2.    Certainty

Problem: Change creates unclear expectations, constantly shifting plans, and ambiguous success metrics. When employees cannot visualise themselves being successful in the future, it can greatly intensify their anxiety.

Solution: Develop grounded descriptions of the role each person plays in the future state.

3.    Autonomy

Problem: Changes that reduce employee control over work processes, decision-making authority, or daily task management trigger resistance responses. Loss of autonomy translates directly into perceived threat for employees.

Solution: Identify areas where employee control can be maintained or expanded.

4.    Relatedness

Problem: Disruption of established team connections and predictable working relationships creates a psychological threat. When daily routine is impacted, employees lose their sense of belonging and professional identity in the workplace.

Solution: Map existing relationship networks before implementing changes.

5.    Fairness

Problem: Changes that appear to unreasonably advantage some employees or disadvantage others will be sabotaged.   Leaders often overlook equity considerations during change design, focusing least on fairness implications.

Solution: Ensure transparent criteria for role assignments and opportunities.

Integrating psychosocial risk management into organisational change processes

Most change conversations focus on outcomes rather than process itself.  By focusing only on the successful outcome, we tend to overlook the reasons why the change may not work. So effective change management also considers potential failure scenarios. If we approach major change with the same mindset as business continuity planning (BCP) and recovery planning (DRP), then we can plan for failure scenarios and hopefully navigate away from them ahead of time.

Rather than shielding employees from potential downsides, leaders must encourage employees to face potential failure scenarios. This approach focuses on navigating and recovering from major crises and helping people react appropriately when things go wrong. Therefore, practicing failure scenarios becomes crucial to building organisational resilience.

Here are some practical organisational change examples:

Key questions to ask during the introduction of new technology:

• What happens on day one when the new ERP system fails to function?
• How do teams respond when new software crashes during critical operations?
• What protocols activate when communication systems go offline during transition periods?

Key things to consider during organisational change scenarios:

• If you reduce the workforce by 10%, what does operational continuity look like without those positions?
• Who will replace people with critical roles and responsibilities? How do remaining team members redistribute workload effectively?

This approach directly addresses psychosocial risk management while supporting regulatory compliance objectives. Unlike traditional wellbeing-focused strategies that rely on emotional comfort, practicing failure scenarios during organisational change strengthens both legal compliance readiness and operational continuity.

Regulatory compliance requirements do not accommodate emotional sensitivities during organisational change. Typically, compliance requires operational continuity regardless of psychological comfort levels. When leaders guide change initiatives that include practicing failure scenarios, they cultivate genuine resilience among employees while ensuring the organisation remains prepared for practical challenges.

Where to next?

When employees rehearse potential failure points and develop response protocols, they approach organisational change with confidence. Our team of consulting psychologists and organisational change consultants conduct thorough cultural assessments to ensure proactive, sustainable transformation that meets all compliance requirements.

Our Approach:

• Cultural architecture analysis to identify strengths and vulnerabilities
• Proactive risk mitigation frameworks
• Compliance-integrated change methodologies
• Sustainable transformation protocols

Contact our specialists today.