Contractors that ignore psychosocial risks will feel it in the bottom line

We have a term in Australia: “cactus”. It means finished, exhausted, burned out – a common condition among top-performing construction project managers the world over.

I know this dynamic well. Before becoming professor of construction management at Queensland’s Bond University, I was project director and owning-entity chief executive for the design and construction of the Sydney Olympic Stadium for the Sydney 2000 Games, the world’s biggest-ever purpose-built Olympic stadium. We built it early and not a dollar over budget.

I survived, but these days, many aren’t so lucky. Here’s how it often plays out.

Contractors reward their top performers very well, but at a price. Say an earlier version of me is doing well on a flagship project when another of the company’s projects gets snarled up with problems. My boss switches me to that one for three months to right the ship, putting someone else in charge of my original one. That someone is often junior and less experienced.

I strain every sinew to get the problem job onto an even keel, and it works. But when I go back to my original project, it’s now snarled up with problems, so I have to bury myself in that to get it back on track and, after months and months of heightened stress and never having a chance to rest and recover, I’m not thinking straight.

I go to my boss and say, I can’t hack this, I’ve got to leave. And he says, “take three weeks off right now, and we’ll raise your salary by 30 grand”.

The money is tempting. It could pay for a new car or private school fees for one of the kids, so I limp along for another couple of years until I’m indisputably, well and truly cactus, and I have no choice but to jump ship, as many people like the earlier me are doing now.

Each of these evacuations is an incalculable loss of experience and tacit knowledge to the employer.

Managing psychosocial hazards is a hot topic now, especially in construction.

Before you roll your eyes, let’s talk cash. Consider the return on investment (ROI) now being realised for every pound or dollar invested in psychosocial hazards management.

In the UK, various studies report an ROI of between £3.30 and £7.70, with £5 being the most often-cited figure. In the US, it ranges from $1.62 to $4, and in Australia, it is currently around AU$2.30.

These are wide ranges, but even the lower ends confirm one thing – business leaders who choose to invest in even the leading stock index funds over managing psychosocial hazards in their companies really do need a checkup from the neck up.

How do companies benefit from investing in organisational psychosocial health? Here are some numbers for Australia, but it’s a good bet they’re similar in other countries.

In the 2022-23 Australian financial year, there were 11,700 claims for mental health conditions, representing one in every 11, or 9.2%, of all serious claims. The median time off work for mental health claims was 34.2 weeks, and the median compensation paid was AU$58,615.

These time and cost figures were four times greater than the medians across all claims.

In the following financial year, it got worse. The number of claims jumped 50% to 17,600, the median compensation rose by nearly 15% to $67,400, and the median time off work rose to 35.7 weeks. The total cost to the Australian economy was $10.9bn. The number of working days lost to previously untreated depression stood at six million.

In the UK in 2024-25, of just over 40 million days lost to work-related ill health or injury, a quarter were due to mental health-related issues.

Are those eyes still rolling?

Business leaders often believe their company is immune. The Australian Human Rights Commission found that nearly half of all senior managers believe none of their employees will have a mental health problem at work.

Employers also protest that you can never really tell for sure whether employees’ mental ill health is caused by their work or their personal circumstances.

They’re not wrong, but the point is moot. For one thing, it doesn’t matter. If someone’s mental ill health was triggered by personal circumstances, but working for you is making them worse, it’s your problem.

For another, as the ROI data shows, investing in workplace psychosocial risk management does help mitigate the problem, so trying to save cash by pretending it’s not your fault is a false economy.

But let’s cut to the chase. For my PhD thesis on construction workplace mental health, I interviewed hundreds of people, mostly project and construction managers who were burned out or well on the way. The reasons were varied but fell into distinct categories, namely:

These are eight of the 14 key psychosocial hazards identified in the Australian regulations.

In Australia, all businesses are now required to involve all employees in identifying psychosocial hazards and risks, making a risk management plan, implementing it and reviewing it annually. This makes profound sense if it’s executed with thought and care.

I’m not at the sharp end of construction any more, but I can tell you what I might well be if I were in a company without a clear-eyed approach to psychosocial hazards.

Cactus, mate.

Dr Alan Patching is Professor of Construction Management at Bond University, Queensland and a clinical psychotherapist and hypnotherapist.