You Can't Hire Your Way Out of Psychosocial Risk

You can't hire your way out of psychosocial risk. Most psychosocial hazards aren't brought into a workplace by employees. They're created by how work is designed, managed and led. Hiring carefully still matters, but building a healthier workplace is what actually lowers your legal risk and lifts performance.

Since the new psychosocial laws came in, I'm hearing the same reaction from a few business owners.

The instinct is to manage the risk at the front door. Be more careful who you let in. Screen harder. Avoid anyone who might struggle with the pressure of the role, or who might be more likely to raise a problem down the track.

You can understand the thinking. The duties are serious, the potential liability is real, and hiring feels like the one lever you fully control.

But it's the wrong end of the problem. And it quietly makes you weaker, not safer.

It's an understandable mistake, because hiring feels controllable. You can't instantly redesign workloads, fix a stretched manager or shift a whole culture. You can choose who walks through the door tomorrow morning. So recruitment becomes the lever people reach for. Not because it's the right one, but because it's the one within reach.

"But what about the person who games it?"

It's worth naming the thing a lot of owners are quietly thinking. Yes, occasionally someone will try to use the laws in bad faith.

But you don't build your whole people strategy around the rare bad actor. And here's the part worth noticing: a strong culture is actually your best protection against them, not your weakness.

Healthy cultures make behaviour easier to read. When most people are engaged, accountable and supported, someone acting in bad faith becomes much easier to spot. In an unhealthy workplace, everyone looks disengaged, overwhelmed or withdrawn, and the signal disappears. You can't tell the difference between someone genuinely struggling because of how work is designed and someone taking the piss. Fix the environment and you don't just lower your risk. You get the clarity to deal fairly with the odd person who really is the problem.

Careful hiring matters. It just doesn't do what people hope.

To be clear, hiring well is always worth doing. Getting the right people into the right roles is one of the most important things any business does.

The catch is that hiring can only ever tell you so much. Some people interview brilliantly and struggle in the role. Others interview quietly and turn out to be your best. A CV and a couple of conversations is a thin slice of a person, and you're making a big bet on it.

So if your plan for managing psychosocial risk is "just hire better people," you've built your safety on the least reliable information you'll ever have about someone. You find out what they're actually like after they start, when the environment you've built starts acting on them.

Some businesses take it further. One approach I've heard of is quietly avoiding hiring anyone under 30, on the theory that younger workers are more aware of the new rules and more likely to use them. Beyond being short-sighted, it's a genuinely dangerous move.

Here's why. Refusing to hire someone based on their age is unlawful age discrimination in Australia, full stop. So in trying to dodge a psychosocial risk you could have managed, you've created an entirely new legal risk instead.

It's also self-defeating on its own terms. Screen out the under-30s and you lose exactly the hungry, driven people who would have run through walls for the right environment. You're not lowering your risk. You're shrinking your talent pool and stacking up legal exposure at the same time.

Which is the real point.

The same person can thrive or unravel depending on what you drop them into.

Why you can't hire your way out of psychosocial risk

Here's what the screening instinct misses.

Most psychosocial risk doesn't walk in the door with a person. It's created by the environment they walk into. Unclear expectations. Unmanageable workload. No support from a stretched manager. No safe way to raise a problem. A culture where people quietly carry too much until they break.

You could hire the most resilient people on earth and still generate all of that. And you'd still be exposed, because the law looks at how work is designed and led, not at how tough your people are.

The stakes aren't small either. Mental health conditions are already the most expensive category of workers' compensation claim in Australia, with a median payout of around $58,000 per serious claim, well over triple the figure for physical injuries. That cost doesn't come from who you hired. It comes from the conditions they ended up working in. That's because the law focuses on how work is organised, supervised and managed, not on whether an employee happened to be naturally resilient.

So screening at the door doesn't remove the risk. It just delays the moment you meet it, and shrinks your talent pool in the meantime.

The move that actually protects you also drives performance

This is the part worth sitting with, because it's where protection and performance stop being two separate jobs.

The thing that genuinely lowers your psychosocial risk is a workplace where people are set up well, supported, clear on their role, and able to speak up. That's not a compliance exercise. That's just a good place to work. And a good place to work is also where people perform at their best and stay.

So the same investment does both jobs at once. You lower your exposure and you lift your output, from one piece of work, not two.

That's the opposite of the screening approach, which costs you good candidates and doesn't even fix the thing it's worried about.

Become the place people are trying to get into

Here's the version of this that should actually excite a leader.

Get the environment right and something shifts. You stop chasing talent and talent starts coming to you. People hear it's a good place to work. Your team tells their friends. Roles get filled before you've finished writing the ad.

And when people are knocking on your door to get in, hiring gets easier, not harder. You're no longer taking whoever's available and hoping. You've got the pick of the bunch.

That's the real answer to the anxiety behind all the screening. You don't protect yourself by being more suspicious at the front door. You protect yourself by building somewhere people want to be, then choosing from the people who want in.

The bottom line

You can't hire your way out of psychosocial risk, because the risk mostly isn't in the people. It's in the environment. The same person can thrive or unravel depending on what you drop them into.

Screen harder and you shrink your talent pool without fixing the exposure. But build a better workplace and three things happen at once. Your psychosocial risk falls. Your people perform better. And the best candidates start wanting to work for you. That's a far stronger strategy than trying to screen your way to safety.

That's what we do at Base State. We help you build the kind of workplace that protects you and performs, so hiring becomes the easy part.

Culture that drives performance.

If you'd like to discover whether Base State can help your business perform better, click here to enquire.