By Emma Clark-Norris, CMHAA Program and Content Lead
Workplace mental health has never had more momentum in Australia. Psychosocial risks are now more explicitly addressed within workplace health and safety requirements, boards are asking questions they might not have considered five years ago, and many organisations now have roles dedicated to employee mental health and wellbeing. As positive as this shift is, this has also created pressure to act quickly. When workplace mental health becomes a priority, the instinct is to introduce an initiative — any initiative — to show that something is being done. This often means choosing a program, platform or provider that ticks the ‘right’ boxes, without first considering: What are we actually trying to improve?
Imperfect action may be better than perfect inaction: but acting without a clear understanding of the issues can lead to reactive initiatives that fail to address the most pressing psychosocial risks. The result is time, money and effort invested in solutions that may have little impact — resources that could be invested elsewhere to make a real difference.
“Where do we start with mental health when everything looks like a priority?” is a question our Alliance members have been working together to answer.
A practical starting point is often the data organisations already collect. Four measures in particular — absenteeism, presenteeism, turnover and workers’ compensation — can provide valuable signals about how work is planned, resourced, designed, and led. None tells the full story on its own, but each points to different workplace conditions, risks and opportunities for improvement.
Together, they help leaders identify where workplace mental health may be affecting performance, productivity and organisational risk, and where investment is most likely to have an impact.
Tip: If you haven't already, try out our Mentally Healthy Workplaces Value Calculator
Key Takeaways
- Start with the data you have: Absenteeism, presenteeism, turnover and workers’ compensation, which you are already collecting, can provide some of the clearest signals that workplace mental health needs attention.
- Each measure is telling you something different: High absence, reduced performance, employee turnover and psychological injury claims can often point to different issues in how work is planned, resourced, designed and led.
- Programs help, but they are not the whole answer: Mental health and wellbeing initiatives can provide valuable support, but they cannot address the underlying work conditions that often drive poor outcomes.
- Turnover may be a larger cost than you thought: Many of the factors that influence whether people stay or leave, including workload, manager support, flexibility and recognition, are also closely linked to workplace mental health.
- The most effective investments start with identifying the problem: Organisations are more likely to see meaningful improvements when they identify the specific problem they are trying to solve before investing in mental health or wellbeing programs.
Absenteeism and Early Support
Every employee should feel able to take their sick leave when they need it. At the same time, frequent or extended absence can be a visible indication that workplace mental health needs closer attention. Absence is also often the first measure raised, because it’s easy to track and part of regular reporting.
Frequent or extended absences are rarely the result of a single challenging week and may have deeper causes. Often, they can reflect pressures that have accumulated over time, alongside missed opportunities to recognise and address concerns before they affect work capacity. Looking at patterns across teams, roles and time periods can help organisations understand whether factors such as workload, poor support, role uncertainty, workplace relationships or poorly managed change may be contributing.
Our Leading Mentally Healthy Workplaces Survey 2025 found that only 55% of employees feel safe discussing mental health concerns with their manager, and 51% feel safe raising them within their organisation. This leaves a substantial group who may not feel they have a safe or clear way to raise a concern early, reducing an organisation’s opportunity to provide support, address work-related contributors and prevent any concerns from escalating.
Strategies for Change:
- Use regular conversations with employees to talk about workload, work pressure and the support they might need so that concerns are more likely to be addressed early.
- Give managers the time, skills and practical options to respond to changes in absence early, which might include having a supportive conversation, adjusting the work or connecting someone with the right support.
- Reduce stigma around taking leave and make sure employees understand what leave and supports are available if needed.
- To identify potential at-risk employees, measure absence across teams and over time rather than as an organisational average to identify where further investigation and support may be needed.
Presenteeism and Reduced Capacity
Presenteeism refers to employees coming to work but performing below their usual level of productivity and output quality. Unlike absenteeism, presenteeism isn’t a precise figure that can be measured and recorded. Signals could include a team whose output has slowly dropped, or a capable person who has become uncharacteristically slow to finish things. Or at a group level, a team might meet deadlines, but with less margin than they used to have.
Evidence suggests that presenteeism is an early warning sign that job demands may be exceeding employees’ available resources. When organisations see high levels of burnout, chronic stress, fatigue, or people consistently working while unwell, the answer is rarely another wellbeing program or resilience initiative — although these can provide useful support.
Many employees know when their performance is slipping, and why. In our Leading Mentally Healthy Workplaces Survey 2025, 45% of employees rated their current performance as lower than their typical performance, and 60% of that group reported burnout symptoms. Employees experiencing work stress recorded 28.6 days a year at reduced capacity, compared with 6.6 days for employees reporting no stressors.
However, organisations often treat this reduced productivity as a performance management issue, not a mental health or a workload one. This can make employees feel defensive rather than supported. Instead, better questions leaders could be asking include: whether jobs are designed sustainably, whether employees have the time, support and resources they need to perform well, whether managers are equipped to recognise and respond to signs of strain, and whether the organisational culture genuinely supports rest, recovery and help-seeking when people need it.
A truly accurate picture of presenteeism requires employees to self-disclose that they’re not performing at their best — or a switched-on manager who notices the slip early. This requires a culture of strong psychological safety where employees can be open when they’re struggling.
Strategies for Change:
- Treat a sustained, unexplained drop in performance as a possible sign of stress or burnout, before it is treated as a performance issue.
- Tackle the work pressures driving presenteeism (not just how well people are coping) by reviewing workloads, staffing, deadlines, and competing priorities — and plan for people being away by building in coverage.
- Help managers step in early by giving them the time and practical options to adjust work, offer support and encourage leave before working while unwell becomes the norm.
- Make it genuinely safe for people to take sick leave without feeling guilty, judged or concerned that it will count against them, in terms of career progression or performance reviews.
Turnover, Culture and the Conditions That Make People Stay
Employee retention is typically treated as a recruitment issue, which means its connection to mental health is often missed. Yet many of the conditions that influence whether people stay (such as workload, manager relationships, poorly managed change and a lack of recognition) can also affect mental health at work.
Turnover is expensive. Gallup’s US research estimates that replacing an employee can cost between half and twice their annual salary, and that is a conservative estimate. Independent research puts that higher for leadership roles. But the impact goes beyond recruitment costs. When employees leave, an organisation also loses human capital: accumulated knowledge, relationships, and experience. Additionally, the employees who stay often absorb the additional work while a replacement is found and trained, creating further pressure and increasing the risk of others leaving.
Allianz research estimates that nearly 2.73 million Australians are considering leaving their jobs within the next year. Its research has also found that 59% of surveyed employees had experienced work-related mental distress, with workload pressure, meeting overload and unrealistic deadlines among the leading contributors.
People may not write ‘workplace mental health’ on an exit form. They are more likely to describe an unmanageable workload, a ‘difficult’ relationship with their manager, poorly handled change, or a feeling that their work was no longer being recognised. These experiences may seem separate, but together they reveal something important about how work is designed, managed, and experienced.
Strategies for Change:
- Bring turnover, employee experience and workplace mental health data together (with shared accountability across HR, WHS and business leaders) rather than treating them as separate issues. Then, identify where turnover is concentrated — such as by team, role, manager, location or tenure — before deciding how to respond, as organisation-wide figures might conceal more localised problems.
- Look beyond the reason selected on exit forms by analysing themes in exit interviews, employee surveys and conversations with current employees. Lean into the conditions employees say influence whether they leave or stay: including manageable workloads, supportive colleagues, genuine flexibility, recognition, opportunity and strong workplace relationships.
- Hold regular ‘stay’ conversations, so managers understand what is helping people stay, what is making work harder and what could cause valued employees to leave. Be accountable by tracking whether agreed actions are taken.
Workers Compensation and Psychological Injury
Psychological injury claims are also occurring in an environment where Australian employers have increasing obligations to identify and manage psychosocial hazards. Under work health and safety laws, psychosocial risks such as excessive workloads, low role clarity, poor support, bullying, exposure to traumatic events and poorly managed organisational change must be managed in the same way as other workplace hazards. For boards and executives, psychological injury claims are therefore not only a wellbeing issue, but also an indicator of organisational, operational and regulatory risk.
A psychological injury claim is the point at which workplace mental health becomes a formal workers’ compensation matter. By then, harm has occurred, and the focus has shifted from prevention to supporting recovery and managing the claim. Companies should pay attention to these claims for two important reasons.
The first is the impact on the person. Psychological injury claims typically involve much longer periods away from work than other serious claims. Safe Work Australia preliminary data for 2023-24 puts the median time lost for a serious mental health condition claim at 35.7 working weeks, which is almost five times the median across other serious claims. That is a substantial period out of someone’s working life, and the recovery process can create significant psychological, personal and financial pressure.
The second is the financial and operational impact. Safe Work Australia figures put the median compensation paid for a serious mental health condition claim at $67,400, compared with a median $16,300 across other serious claims. Over the past decade, psychological injury claims have grown by 161%, and now account for 12% of all serious workers’ compensation claims in Australia.
If an organisation has had previous psychological injury claims, they provide an important place to start. Look at the volume and duration of claims, return-to-work outcomes, whether employees returned to your organisation and in the same role, and any recurring patterns in the circumstances surrounding the claim. The aim is to identify whether claims point to broader patterns in work design, workload, management practices, workplace relationships, exposure to traumatic events, or how organisational change is handled. Safe Work Australia identifies early support and action on workplace issues as important in preventing psychological distress from developing into psychological injury. It can also be valuable to look at how long concerns were present before meaningful support or workplace actions were taken.
A clear recovery-at-work and return-to-work process is crucial once an injury has occurred. Equally vital is identifying and controlling for psychosocial hazards before they cause harm. This means going beyond support services and training to make practical changes to how work is designed, managed and carried out.
CMHAA’s Managing Psychosocial Risk in the Workplace modules cover why psychosocial risk matters, how to plan an assessment, evaluate available options, and act on what an assessment finds. It also incorporates case studies from Bunnings and Commonwealth Bank to demonstrate how two very different organisations approached the task.
One thing worth noting: as awareness and trust grow, organisations may initially see more concerns raised. This doesn’t mean that risk has increased: but rather, that employees may now feel more confident speaking up about issues. What actually matters is how your organisation responds, such as whether concerns are properly investigated, risks are addressed, and employees can see that raising an issue leads to meaningful action.
Strategies for Change:
- Treat a psychosocial risk assessment as the beginning of the work, then act on the findings — make it clear who is responsible and measure whether the changes are reducing the risk.
- Look across different sources of data — claims, absence, employee feedback, performance and turnover — for any recurring patterns of where issues keep appearing.
- Take a long-term approach. Managing psychosocial risk is ongoing work, and you need to respond quickly to immediate risks while regularly reviewing whether controls are working.
Where Actions and Support Fit
Once you identify which areas in your organisation might need attention, prioritising what to implement becomes much easier.
The most effective organisational actions go beyond standalone wellbeing programs by addressing the underlying work conditions, management practices and support systems that contribute to absenteeism, presenteeism, turnover and workers’ compensation claims. And if considering training: practical manager training can help organisations respond earlier and more effectively by building capability to recognise warning signs, have supportive conversations, manage workloads, make appropriate work adjustments, address psychosocial risks and support recovery at work.
The table below is a good starting point to think about your own organisation.
| Area | What is needed | Actions and supports that commonly help |
|---|---|---|
| Absenteeism | Creating a workplace where people feel safe to raise concerns early and take appropriate leave, while addressing the conditions contributing to absence. |
Early support and referral; manager training; reasonable work adjustments; access to occupational health or EAP support; and coordinated return-to-work planning.
Individualised and counselling-based workplace interventions, although results vary by intervention and workforce. |
| Presenteeism | Recognising changes in work capacity early and treating them as a signal to explore health, workload and work design, not simply as a performance problem. | Workload and staffing review; safe and accessible sick leave; temporary adjustments to duties or hours; backup coverage; manager training; and occupational health support where appropriate. |
| Turnover | Understanding and improving the conditions that influence whether people stay, including manageable work, connection, flexibility, opportunity for development and supportive managers. | Stay interviews; job and workload redesign; flexible work where suitable; manager capability development; career and development pathways; fair reward and recognition; and action on team-level survey findings. |
| Workers' compensation | Identifying and controlling psychosocial hazards before harm occurs, while supporting recovery and sustainable return to work if an injury occurs. | Psychosocial hazard identification and risk assessment; consultation with workers; work-design controls; early reporting and support; suitable duties and reasonable adjustments; coordinated recovery-at-work or return-to-work planning; and access to appropriate clinical or occupational health support. |
Not all workplace wellbeing and mental health programs are created equal. Our short guide, Acquiring Wellbeing, offers practical questions and considerations to help you cut through the marketing, assess quality, and invest in initiatives more likely to benefit your people and organisation. What changes mental health outcomes is not how much an organisation spends, but whether it spends it on the right things.
If you would like to see the potential value each of these areas presents for your own organisation, our Mentally Healthy Workplaces Value Calculator gives you an estimate based on your headcount, industry, state and the programs you already run.
Working On This Together
While having the right data is a great place to start, these issues are too complex for any single organisation to solve alone. Through the Alliance, our members share what they have implemented and what they have learned: including the approaches that did not work, through our case study series, expert sessions and in the research with employees from our member companies, representing more than 500,000 working Australians.
If you’re interested in knowing more about CMHAA, enquire about membership here.
Frequently Asked Questions
Where should an organisation start with workplace mental health?
Start with whichever of absenteeism, presenteeism, turnover or workers’ compensation shows the greatest room for improvement in your own organisation. Each measure points to a different part of how work is planned, resourced, designed and led, so identifying the largest tells you what any investment should address. You can use the Mentally Healthy Workplaces Value Calculator to estimate which presents the largest opportunity for your organisation.
Do workplace mental health programs work?
Yes, within limits. Mental health and wellbeing initiatives can provide valuable support, but they cannot address the underlying work conditions that often drive poor outcomes: workload, role clarity, how change is handled, how much control people have over their own work, and whether managers have the capability and the time to support their teams. What changes outcomes is not how much an organisation spends, but whether it spends it on the right things.
What is presenteeism?
Presenteeism refers to employees coming to work but performing below their usual level of productivity and output quality. Unlike absenteeism it is not a precise figure that can be measured and recorded, so it depends on employees self-disclosing or on managers noticing the change early. In CMHAA’s Leading Mentally Healthy Workplaces Survey 2025, 45% of employees rated their current performance as lower than their typical performance, and 60% of that group reported burnout symptoms.
Why is turnover connected to workplace mental health?
Because many of the factors that influence whether people stay or leave, including workload, manager support, flexibility and recognition, are also closely linked to workplace mental health. Allianz research estimates that nearly 2.73 million Australians are considering leaving their jobs within the next year. Gallup’s US research puts the cost of replacing an employee at between half and twice their annual salary, which makes turnover one of the most expensive areas an organisation can leave unaddressed.
Is managing psychosocial risk a legal obligation for Australian employers?
Yes. Under Australian work health and safety laws, psychosocial risks such as excessive workloads, low role clarity, poor support, bullying, exposure to traumatic events and poorly managed organisational change must be managed in the same way as other workplace hazards. This article is general information rather than legal advice, and organisations should seek their own guidance on compliance.
How much do psychological injury claims cost Australian employers?
Safe Work Australia figures put the median compensation paid for a serious mental health condition claim at $67,400, compared with a median of $16,300 across other serious claims. The median time lost is 35.7 working weeks, almost five times the median across other serious claims. Over the past decade these claims have grown by 161%, and they now account for 12% of all serious workers’ compensation claims in Australia.
