Another resignation lands on your desk. A high performer, someone you thought was thriving, has handed in their notice. Their reason? “Stress.” “Burnout.” “A toxic work environment.”
You didn’t see it coming. But should you have?
Psychological safety isn’t just a nice-to-have; it’s a business necessity, and in today’s corporate world, it’s quickly becoming a legal one, too.
Workplaces are waking up to the fact that employee well-being isn’t just about physical health or access to an EAP. It’s about the environment leaders create. If employees are afraid to speak up, fear repercussions for admitting struggles, or feel unsafe to express concerns, their mental health suffers. When that happens, the company isn’t just dealing with disengagement and high turnover; it’s potentially exposing itself to legal risk.
The obligation to provide a safe working environment has always been evident in physical terms, ensuring buildings meet safety standards, equipment is adequately maintained, and policies are in place to prevent injuries.
What about the psychological environment? The stress, anxiety, and burnout caused by toxic leadership, workplace bullying, or an unforgiving performance culture can be just as damaging as a physical injury.
When Psychological Safety Is Lacking, Well-Being Suffers
A workplace where psychological safety is absent is a breeding ground for silent struggles. Employees bottle up stress. They avoid disclosing mental health challenges for fear of being seen as weak or incapable. They stay quiet about workloads that are leading to burnout because they don’t want to be labelled as ‘not coping.’ When these pressures mount, they manifest in real consequences: chronic stress, absenteeism, mental health breakdowns, or even medical incapacity.
In extreme cases, a toxic work environment can escalate into depression, anxiety disorders, or even PTSD. The reality is that leaders who ignore psychological safety aren’t just risking employee morale; they’re playing a dangerous game with human health. In today’s world, that can have serious consequences.
The Real-World Impact on Companies
When psychological safety is neglected, it shows up in ways that no business can afford:
● High absenteeism and sick leave claims – Employees experiencing prolonged stress and anxiety will eventually reach a breaking point. Burnout leads to time off, which disrupts productivity and costs the company money.
● Legal and reputational risk – An employee who experiences mental health deterioration due to a toxic workplace culture may have grounds to take legal action.
The Occupational Health and Safety Act (OHSA) requires employers to ensure that workplaces are safe and healthy working environments. Furthermore, the Labour Relations Act protects employees from unfair treatment and discrimination, which can include constructive dismissal claims.
This can lead to costly settlements, CCMA cases, or reputational damage that drives away talent.
● Talent drain – The best employees leave. High performers won’t stick around in a culture that stifles open communication, punishes vulnerability, or rewards toxic behaviours. And replacing skilled professionals is never cheap.
● Low engagement and innovation—A fearful team isn’t an innovative team. When employees don’t feel safe sharing concerns, challenging ideas, or admitting mistakes, creativity dies, problem-solving slows, and businesses become stagnant.
The Flip Side: What Happens When Psychological Safety Exists
Now, let’s look at what happens when companies get this right. When leaders foster psychological safety:
- Employees speak up about workload concerns before they reach burnout.
- People feel comfortable admitting mistakes early, preventing costly errors.
- Teams collaborate openly because they trust each other and their leaders.
- Individuals feel valued, which boosts engagement and retention.
- The company’s culture attracts top talent rather than pushing it away.
- In an environment where employees feel psychologically safe, mental health isn’t just a tick-box exercise; it’s part of the company’s DNA. When that happens, businesses don’t just avoid legal risks; they thrive.
What Leaders Can Do Now
Corporate leaders and business owners don’t need to wait for a legal mandate to act.
Psychological safety starts at the top, and it’s built through consistent action:
Encourage open conversations. Employees need to know that discussing challenges, whether work-related or personal, will not be met with judgment or career consequences.
Lead with empathy. When leaders prioritise results over people, a culture of fear is created. High standards are important, but they must be balanced with understanding and support.
Actively address toxic behaviour—Whether it’s bullying, discrimination, or leaders who create a culture of fear, ignoring these behaviours is the fastest way to lose trust. Here, consistency is key. Workplace behavioural standards, rules, and conduct should be crafted to instil healthy and productive environments, applicable to all team members, and applied consistently.
Reframe mistakes as learning opportunities – Employees who fear punishment for errors will hide them. Those who see mistakes as a chance to grow will take ownership and improve.
Invest in training – Psychological safety isn’t built overnight. Leaders must be equipped with the skills to create environments where employees feel safe, valued, and heard. (View details of the training we can offer your team here.)
The legal landscape around workplace mental health is evolving. Employers who fail to recognise the impact of psychological safety on well-being may soon face legal consequences.
Forward-thinking leaders don’t need legal pressure to do the right thing; they know that a safe, supportive workplace isn’t just a moral responsibility; it’s a business advantage.
If you’re ready to build a culture where employees can thrive both mentally and professionally, it starts with leadership.
Ready to Create a Psychologically Safe Workplace?
At FLAG Academy, we help businesses build environments where employees feel safe, valued, and supported. Our Psychological Safety in the Workplace training equips leaders with the tools to foster open communication, reduce burnout, and boost team engagement.
Don’t wait for the next resignation to prompt action. Contact us today to schedule a session and start building a workplace culture that thrives on trust, empathy, and well-being.
Invest in your people – they’re your best asset.
For more information, download our Psychological Safety in the Workplace Training Overview here or WhatsApp us at 078 458 5338.
At SchoemanLaw Inc, we help you document your workplace policies, procedures, and employment contracts to ensure that you create a positive and trusted working environment. Our process is unique as we help you align your brand identity with your workplace policies and contracts to create an authentic experience both from the inside and out.
Contact us at www.schoemanlaw.co.za for a free 30-minute discovery call.
Article collab with Ann du Plessis and Nicolene Schoeman – Louw, SchoemanLaw Inc