The Business Case for Psychological Safety in the Workplace 

There are direct correlations between the level of psychological safety employees experience at work and bottom-line results. Experts say employers can unlock human potential and benefit from high returns on an investment in psychological safety strategies that support OSHA compliance, workforce retention and resilience, and business sustainability.  

What is Psychological Safety? 

The origins of psychological safety are traced to the hierarchy-of-needs pyramid developed by the psychologist Abraham Maslow in the 1940s. According to Maslow, basic human needs must be met before people can achieve their full potential.  

Safety ranks second on the hierarchy after life-sustaining food, water, and shelter. A SimplyPsychology article describes this level of safety as a “desire for a predictable and secure life,” including financial stability, health, and protection from danger. 

Psychological safety was introduced as a workplace-related concept by Harvard University professor Amy Edmondson in an influential study, Psychological Safety and Learning Behavior in Work Teams, in which she describes it as a “shared belief that a team is safe for interpersonal risk taking.” Edmonson found that team learning behaviors influenced candor, accountability, and outcomes. 

The need for psychological safety reassurances may be particularly applicable when there is a perception among employees that production quotas and profits are more important to their employer than their personal safety and health. Feelings of fear, vulnerability, or reluctance to become fully engaged at work may also be influenced by the setting, for example: 

• Fast-paced, high-production industries 
• Lower-pay-scale jobs without benefits 
• Isolated locations and outdoor environments 
• Risk of exposure to hazardous conditions or materials 
• Occupations with risk for violence or discrimination  

According to attorneys with Seyfarth Shaw, a national employment law firm, “employers increasingly recognize that the most sophisticated programs can falter when workers do not feel safe to speak. The strength of a safety program depends not only on written procedures, training, and audits but on an underlying culture where employees can raise concerns, report hazards, and suggest improvements without fear of embarrassment or reprisal.”  

The Business Case for Psychologically Safe Workplaces 

Along with a greater sense of ease, studies show that psychologically safe employees are more likely to enjoy a personal sense of accomplishment when they are held to a high standard of performance and feel respected, heard, and valued for their contributions. That translates to higher productivity and greater job satisfaction.  

OSHA identifies worker engagement as a key aspect of effective occupational health and safety program management. When employers integrate psychological safety with other occupational health and safety initiatives, they help ensure compliance with OSHA standards, lower recordable work-related injury rates, and reduce legal liability – saving time and money that can be allocated to core business objectives. 

Here are some examples of returns associated with an investment in psychological safety in the workplace: 

1. Google’s Project Aristotle study of high-performing teams found that teams with strong psychological safety scores consistently outperformed those with weaker scores and produced measurable gains in several key areas: 
   
   • 19% higher productivity, with faster project completion and fewer errors 
   
   • 31% more likely to propose and implement innovative ideas 
   
   • 27% less likely to leave teams that encouraged risk-tasking 
   
   • 3.6 times more engaged, with higher levels of morale and job satisfaction. 

2. In a study on ways Psychological Safety Levels the Playing Field for Employees, BCG, a consulting firm, found that workforce attrition is lower among groups with high levels of psychological safety, which helps lower attrition risk across an entire organization. According to findings from an Express Employment Professionals-Harris Poll survey, the average cost of turnover was $45,236 per employee in U.S. companies at the beginning of 2026, compared to $36,723 last year. 

3. Psychological Safety as an Enduring Resource Amid Constraints, a study of healthcare workers during the COVID-19 pandemic, found that employees on psychologically safe teams were more resilient, less prone to burnout, and more likely to stay in their jobs, even during periods when they were dealing with intense stress and resource constraints. According to research on the Health and Economic Burden of Employee Burnout to U.S. Employers, employee disengagement and burnout costs an annual average of $3,999 per non-managerial hourly employee, $10,824 per manager; and $20,683 per executive. In addition, disengagement/burnout can cost 0.2 to 2.9 times the average cost of health insurance and 3.3 to 17.1 times the cost of training per employee, researchers said. 

Tips for Employers to Create a Culture of Psychological Safety 

Start with Trust: Trust among all stakeholders is the foundation for a culture of psychological safety. Examples of trust cited by John Eggers, Ph.D., in Psychological Safety Influences Relational Behavior include being open to collaboration, freely explaining motives and reasoning behind decisions, and aligning words with actions.  

Be Holistic: Refer to the National Institute for Occupational Safety and Health’s Total Worker Health® framework and WorkCare’s model – From Safety to Wellness® – when developing strategies to reinforce occupational health and safety practices and principles. 

Promote Learning: Experts says that leadership behavior strongly influence safety perceptions. A culture that fosters learning from experience and each other stimulate creativity and innovation. 

Reduce Risk: Approach psychological safety as a risk-control mechanism. Do a thorough audit to determine where there are both physical and psychological risk threats in your operations and develop targeted interventions to reduce them. 

Face Reality: Accidents and mistakes happen. Conflicts arise. An understanding of what drives human behavior makes it easier to manage challenging situations with empathy. Individuals handle stress, ambiguity, and personal risk in different ways. Some are more resilient than others. Creating a workplace where employees feel safe about speaking up about safety is important. 

Ask Us About WorkCare’s Solutions 

WorkCare’s holistic occupational health and safety delivery model provides solutions that help employees feel physically and psychologically safe and secure on the job. We believe that workplace mental health and wellness should be a business priority. Contact us today to learn how quickly an investment our preventive approach can pay off.