Change Management as a Psychosocial Hazard: What Organisations Need to Know

How to identify the risks of poor organisational change, and three principles for managing them effectively

Dr. Georgi Toma | Director, HeartBrain Works | Honorary Research Fellow, University of Auckland

Introduction

Organisational change is constant. Mergers, restructures, system overhauls, leadership transitions, shifts in strategy — few organisations experience more than a few months of genuine stability before the next wave of change arrives. And yet, despite this frequency, research consistently shows that around 70% of change programmes fail. More troubling still, poorly managed change is a recognised psychosocial hazard — one that compounds other risks in the workplace and can cause significant, measurable harm to the people who live through it.

This article is drawn from a professional development webinar delivered as part of HeartBrain Works' Psychosocial Hazards Focus series. It examines what change management is and why it matters from a psychosocial risk perspective, explores the role of uncertainty as the primary mechanism of harm, introduces a practical checklist for assessing whether change has been managed well, and offers three principles for doing it better.

What Is Change Management — and Why Does It Keep Failing?

Change management can be understood as the process of continually renewing an organisation's direction, structure, and capabilities to serve the ever-changing needs of its external and internal customers. By definition, it is not a one-off event but an ongoing feature of organisational life, inseparable from strategy itself.

Researchers have argued that against a backdrop of increasing globalisation, deregulation, rapid technological innovation, a growing knowledge workforce, and shifting social and demographic trends, leading organisational change has become the primary task of management today. Whether or not one accepts that framing entirely, the reality for most WHS and HR professionals is that change — and its consequences — is already on their desks.

The problem is that change tends to be managed poorly. Research characterises organisational change as typically reactive, discontinuous, and ad hoc — often triggered not by careful planning but by a crisis or an environmental shock. Organisations move into action faster than they should, without sufficient time for planning or genuine consultation, and then fail to follow through. The result is that approximately 70% of change programmes do not achieve what they set out to do — and in the process, they generate a range of psychosocial risks that affect the people asked to live through them.

Why Poor Change Management Is a Psychosocial Hazard

When we think about why poorly managed change is harmful, the answer lies primarily in a single concept: uncertainty. Uncertainty is the most commonly reported psychological state in the context of organisational change, and its effects on human wellbeing are well documented.

Consider what a merger actually asks of the people experiencing it. They may face uncertainty about the nature and form of the new organisation, the impact on their particular business unit or team, changes to their role and responsibilities, the possibility of layoffs, pay cuts, or reduced promotion opportunities, and shifts in the culture they have built their working life within. None of these questions are trivial. Collectively, they create a sustained state of psychological threat — a loss of control over the conditions of one's working life — that activates the stress response and, if prolonged or intense enough, gives rise to genuine psychological harm.

The research evidence is clear on the consequences. Uncertainty during organisational change negatively impacts employee wellbeing, increases stress and turnover intention, and decreases job satisfaction, commitment, and trust in the organisation. These are not soft, intangible effects. They show up in sick leave data, workers' compensation claims, attrition rates, and the difficulty organisations face in attracting and retaining talent after a poorly managed change.

Change management also does not create risk in isolation. It compounds other psychosocial hazards. A poorly executed system change, for example, is likely to increase cognitive load as people learn an unfamiliar platform, disrupt role clarity as processes shift, generate friction between teams, and increase workload as errors and inefficiencies accumulate. Understanding this interaction — how change management risk compounds with other hazards already present in the workplace — is essential to an accurate assessment of the true risk profile.

Assessing Whether Change Has Been Managed Well

One of the most useful tools for understanding the psychosocial impact of change is to assess what was and was not communicated — and when. The HeartBrain Works Change Management Impact Checklist, adapted from research on uncertainty during organisational change, provides a structured way to do this across three levels.

At the strategic level, the key questions concern the communication of the organisation's direction and rationale. Did the organisation communicate clearly the reasons for the change? Did it convey the future direction, and help people understand the business environment the organisation would be navigating? Did it address questions of sustainability — the kind of forward-looking concern that sits in the back of every employee's mind when major change is announced? And did leadership allow sufficient time for each stage of the process, including genuine consultation with staff?

At the structural level, the questions turn to the operational specifics. Were changes to reporting structures communicated clearly? Were changes to systems, policies, processes, or physical location explained in a way that gave people enough time to prepare? Were changes to the function and composition of different business units made transparent? Was the possibility of restructure or redundancies addressed directly? And critically — were sufficient resources allocated to implement these changes, rather than asking people to absorb them on top of their existing workload?

At the individual level, the questions become personal. Were the specific implications of the change communicated to each person: what would happen to their role, their reporting line, their access to promotion, their sense of job security? And — a question that is rarely asked but carries significant weight — were line managers given sufficient resources to support their teams through the change process?

That last question deserves emphasis. Line managers are the people who absorb the questions, concerns, and distress of their teams during a change process. They are expected to hold the line, communicate confidently, and provide reassurance — often while navigating their own uncertainty about what the change means for them. Failing to equip and resource them for this role is one of the most consistent and costly failures in change management.

These three levels — strategic, structural, and individual — influence each other in a trickle-down pattern. Failures at the strategic level, such as poor communication of the rationale for change, will inevitably undermine the quality of structural and individual-level responses. When people do not understand why a change is happening, no amount of operational detail will restore their sense of control.

Three Principles for Effective Change Management

1. Quality Change Communication

Communication is the primary mechanism through which organisations address the uncertainty that change creates. When people have access to clear, timely, and credible information about what is changing and why, they feel better prepared, better able to cope, and more in control of their situation. When that information is absent, delayed, or inconsistent, the vacuum is filled by rumour, speculation, and anxiety.

Quality change communication must be timely — delivered well in advance of the changes it describes, not announced two weeks before implementation. It must be credible — grounded in honest, objective information rather than corporate optimism that fails to acknowledge real challenges. And it must be trustworthy — consistent, transparent, and delivered by people who are seen to have both the knowledge and the authority to speak to what is happening.

One practical recommendation that is often overlooked: communicate throughout the change process, not just at its beginning and end. When organisations announce a multi-stage change program and then fall silent for weeks or months, people do not assume that progress is proceeding smoothly. They assume that something has gone wrong, or that information is being withheld. A message that says the project is progressing as planned and there is nothing new to report is a more valuable communication than silence. Regular updates — even brief ones — preserve people's sense of connection to the process and reduce the psychological toll of uncertainty.

2. Genuine Participation in Decision-Making

Participation in decision-making means creating a process in which influence over outcomes is shared between management and staff — not a consultation exercise that gives the appearance of inclusion without any real effect on the decisions made.

The appropriate form of participation will vary depending on the context. It may be mandatory or voluntary, formal or informal, direct or conducted through representatives, committees, or working groups. Strategic decisions — those made at the executive level about the overall direction of the organisation — will naturally involve less direct staff input than tactical and structural decisions. But even at the strategic level, actively seeking staff perspectives tends to build workforce investment in the outcome, and often surfaces knowledge and insight that senior leadership lacks.

The benefits of genuine participation are well established. Employees who are involved in the implementation of new programs are significantly more likely to perceive those programs as beneficial. Employees involved in tactical and structural decisions are more open to change and accept it more readily than those who are simply told what has been decided.

A particularly effective model for navigating complex system or process changes is the working group approach. This involves appointing an executive sponsor with decision-making authority and budget, alongside representatives from each of the teams that will be affected by the change. Those representatives gather information about how the current system or process is actually used — the specific tasks, the use cases, the workflows — and bring that together in a working group to ensure the proposed change can accommodate everything that frontline staff actually need it to do. They then conduct user testing before any final decision is made.

This approach requires investment of time and planning. But it pays for itself many times over by reducing the post-implementation problems — the frustration, the increased workload, the system friction, the team conflict — that reliably emerge when changes are decided without adequate consultation of the people they affect most.

3. Objectively Assess Whether Change Management Has Become a Psychosocial Risk

The third principle is to treat change management as a subject of psychosocial risk assessment rather than assuming its consequences will resolve themselves over time. If your organisation has recently been through a significant change process, the question to ask is not simply whether the change was implemented successfully from an operational standpoint, but whether it has given rise to psychosocial risk for the people who lived through it — and if so, what compounding factors are making that risk worse.

This requires understanding the root causes of any risks identified. If workload has increased, is that because the change genuinely added to the volume of work, or because role clarity was disrupted and duplication increased, or because a new system created inefficiencies that people are now absorbing? The controls required will differ significantly depending on the answer.

The business case for investing in this kind of assessment is straightforward. Psychological injury claims have been rising across Australia, and those with a psychological component are, on average, significantly more expensive and take substantially longer to resolve than physical injury claims alone. Demonstrating to executive leadership the link between poorly managed change, psychosocial risk, and the cost of that risk — in workers' compensation claims, in turnover, in recruitment, and in the regulatory exposure created by unmanaged hazards — is one of the most effective ways to secure the investment that proper change management requires.

Addressing Manager Resistance to Change

A practical challenge that arises frequently is how to work with line managers who are themselves resistant to change. The most useful first step is to understand what is actually underpinning that resistance, because the causes vary and the response needs to match.

Resistance may stem from a genuine lack of resources — managers who are already at or beyond capacity cannot reasonably absorb additional complexity. It may reflect a lack of understanding of the rationale for the change: if the why has not been effectively communicated, resistance is a predictable response. It may also reflect a belief that the current way of working is adequate, or simply the very human preference for the status quo, which tends to be perceived as requiring less energy than adaptation and change.

Once the underlying cause is understood, it becomes possible to address it specifically — whether that means providing more support and resources, taking more time to explain the rationale, or involving resistant managers more directly in the process so they develop ownership of the outcome.

Conclusion: Managing Change as a Health and Safety Issue

Organisational change is not going away. If anything, the pace of change is accelerating — driven by technology, by regulatory shifts, by economic pressures, and by the ongoing evolution of the workforce itself. The question for WHS and HR professionals is not whether their organisation will experience significant change, but whether that change will be managed in a way that protects the psychological health of the people who work through it.

The tools to do this well are available. Clear, timely, and credible communication. Genuine participation in decision-making at the levels where it is most effective. Objective assessment of the psychosocial risks that change creates, with attention to the compounding factors that make those risks worse. And adequate resourcing of the line managers who are, ultimately, the people on whom effective change management most depends.

If you would like support assessing the psychosocial impact of change in your organisation or developing a more effective approach to change management, we would welcome the conversation.  Get in touch with us! 

References

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Bordia, P., Hobman, E., Jones, E., Gallois, C., & Callan, V. J. (2004). Uncertainty during organizational change: Types, consequences, and management strategies. Journal of Business and Psychology, 18(4), 507–532.

Hui, C., & Lee, C. (2000). Moderating effects of organization-based self-esteem on organizational uncertainty: Employee response relationships. Journal of Management, 26(2), 215–232.

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Toma, G. (2026). Psychosocial Risk Management for a Healthier Workplace: A Practical Implementation Guide. Routledge.

About the Author 

Dr. Georgi Toma is the Director of HeartBrain Works and an Honorary Research Fellow at the University of Auckland. With over a decade of experience in psychosocial risk, occupational stress, and culture interventions, Georgi has supported high-profile clients including Myer, RMIT University, Uber, Hitachi Energy, Clough Group, MEC Mining, and Environment Canterbury to create mentally healthy workplaces. HeartBrain Works offers validated psychosocial risk audits, training for leaders and staff, and the scientifically validated Wellbeing Protocol. 

About the Healthy Work Community of Practice 

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