Did you know that psychological safety in the workplace could generate massive economic benefits for the UK economy? Fantastic, but what is it? When an employee possess’ psychological safety, they feel safe to speak up, take risks, challenge, and share ideas publicly, without fear of ridicule, or retribution.
As Harvard Professor, Dr. Amy Edmondson, states ”Psychological safety isn’t about being nice. It’s about giving candid feedback, openly admitting mistakes, and learning from each other.”
Here is how fostering psychological safety could potentially transform both your organisation and the UK economy:
1. Boost Innovation
When people feel safe to express bold ideas, businesses innovate more. Studies show that innovation is responsible for 50% of economic growth in advanced economies like the UK (OECD, 2015). Encouraging innovation through greater psychological safety could contribute £20-30 billion to the UK economy annually according to some estimates!
2. Increase Productivity
Engaged and empowered employees are more productive. In fact, research shows that engaged workers are 17% more productive (Frazier et al., 2017). Even a small 1% boost in productivity could add £25 billion to the UK’s GDP (based on the UK’s 2023 GDP of £2.5 trillion)!
3. Lower Turnover and Absenteeism
Psychological safety makes employees happier and more likely to stay at their jobs. Research by the Chartered Institute of Personnel and Development (CIPD) suggests that replacing an employee can cost up to £30,000 . A UK government report found that absenteeism costs the economy £18 billion annually (HSE, 2020) . If psychological safety could cut absenteeism by even 10%, this would save the UK economy £1.8 billion annually. Reducing turnover and absenteeism together could save UK companies £5-10 billion per year.
4. Improve Mental Health
Workplace stress costs the UK economy £117.9 billion annually (Centre for Mental Health, 2020). By reducing stress through supportive work environments, we could save £6 billion each year in healthcare and lost productivity.
5. High Performing Teams
Psychological safety facilitates effective collaboration, which is increasingly important in knowledge-driven economies. Google’s internal study on team effectiveness (Project Aristotle, 2015) identified psychological safety as the most important factor in high-performing teams.
Very crudely and what I regard as “back of a fag packet” maths, the figures above indicate a potential £50-70 billion bounce for the UK economy, so why are organisations not investing more in cultivating enhanced psychological safety? Now this is an interesting question…
