A groundbreaking study has revealed that the wellbeing of employees is taking a significant toll on UK companies, costing them a whopping £56 billion each year.

The research highlights the urgent need for organisations to prioritize psychological safety within the workplace, as it emerges as a crucial factor in driving success and optimizing employee performance.

Psychological safety refers to the belief and feeling that individuals can freely express their thoughts, opinions, and ideas within a company without fear of judgment or negative repercussions. Google’s Project Aristotle, which extensively examined effective team dynamics, identified psychological safety as the single most important factor contributing to team effectiveness. In a time marked by global concerns over equity, diversity, and accessibility, along with declining productivity, increased burnout, and diminishing retention rates among workers, creating psychologically safe work environments becomes paramount.

Additionally, research conducted by mental health charity Mind highlights the significant financial impact of poor mental health on UK businesses. The staggering cost of £56 billion per year underscores the critical importance of fostering optimal working conditions for employees.

What about productivity?

According to BetterUp, a coaching platform, company cultures that foster a strong sense of belonging have witnessed a remarkable 56 percent increase in productivity and a 50 percent reduction in the risk of employee turnover. Furthermore, new research from Rethinkly, a virtual world platform addressing communication and well-being challenges, reveals that nearly one in five UK workers (18%) worry about being judged by their colleagues when making a mistake. As a result, 23 percent of workers with mental health issues claim that their productivity at work is only 50 percent or less of its potential. This finding emphasizes another aspect of psychological safety—recognising when an employee’s threat response is triggered and nurturing an environment where such responses can be alleviated.

To establish and maintain psychological safety effectively, it is crucial for employees at all levels within an organization to foster this environment. The behavior and actions of leaders greatly influence team culture, and creating a psychologically safe workplace necessitates consistent modelling of inclusive behaviors to shape new team norms over time. This also involves identifying when an employee’s threat responses are triggered and addressing them appropriately.

Toxic relationships

Threatening feelings can arise from mishandled feedback, intimidation from team members, or situations that undermine one’s status or autonomy. Given that Rethinkly’s proprietary research unveiled toxic relationships with peers and managers among 11 percent of the British workforce, as well as 15 percent of employees taking time off due to communication challenges, it is evident that investing in a psychologically safe space yields substantial benefits for corporations of all sizes.

In the current climate of widespread absenteeism due to poor mental health and diminished productivity, Rethinkly, a metaverse software widely adopted by the NHS and corporate firms like IBM, offers a solution. Their software enables employees at all levels to create and nurture psychological safety within their workplace. By recreating uncomfortable scenarios in a virtual safe space, Rethinkly’s platform removes real-world references, inspiring autonomy of expression and fostering a psychologically safe environment for growth and collaboration.





Amelia Brand is the Editor for HRreview, and host of the HR in Review podcast series. With a Master’s degree in Legal and Political Theory, her particular interests within HR include employment law, DE&I, and wellbeing within the workplace. Prior to working with HRreview, Amelia was Sub-Editor of a magazine, and Editor of the Environmental Justice Project at the University College London, writing and overseeing articles into UCL’s weekly newsletter. Her previous academic work has focused on philosophy, politics and law, with a special focus on how artificial intelligence will feature in the future.