News & insights

Boosting Business Through Psychological Safety: The Key to Employee Engagement and Performance

By Rebecca Parnell

Employees perform better when they feel able to contribute, challenge, and make mistakes. For this to happen, leaders must create a culture of psychological safety at work. Psychological safety is when members of a team feel it is safe to contribute and be authentic without fear of negative consequences.

As highlighted in several studies, fostering a culture of psychological safety is key to boosting employee engagement, reducing turnover, and enhancing organisational performance and profitability. Research, including insights from Gallup and studies by Google, illustrate the direct link between psychological safety and significant improvements in productivity and staff retention. These findings demonstrate that when individuals feel protected, they are more likely to fully-engage with their work, leading to better outcomes for the organisation.

Research by Dr. Amy Edmondson, for her 2018 book, The Fearless Organization, claims that open and inclusive workplaces have greater innovation, engagement, and staff retention. Therefore, the commercial implications of psychological safety are worth any business acting on. Beyond individual well-being, a psychologically safe workplace fosters innovation, enabling the free flow of ideas that can lead to advancements in products, services, and processes. Additionally, such an environment reduces the risks associated with workplace stress and mental health issues, which can impact absenteeism and productivity.

Simon Sinek on psychological safety at work:

“leadership matters, because it's the leader that sets the tone. When a leader makes the choice to put the safety and lives of the people inside the organisation first, to sacrifice their comforts and sacrifice the tangible results, so that the people remain and feel safe and feel like they belong, remarkable things happen.” Simon Sinek, TED2014.

The process of establishing psychological safety requires acknowledging the diverse experiences of employees and ensuring that everyone - irrespective of their role or background - feels valued and heard.

Tips for creating a psychologically safe environment:
Leaders plays a critical role in modelling behaviours that promote psychological safety, such as: 

  • Demonstrating vulnerability
  • Welcoming feedback
  • Making work meaningful for each employee
  • Encourage open feedback channels
  • Promote inclusivity
  • Encourage open dialogue

The commitment to psychological safety is not just a moral responsibility but a strategic necessity. Organisations that prioritise the psychological well-being of their employees not only position themselves as attractive employers, but consistently outperform their competitors in terms of profitability and performance. As the business environment continues to evolve, instilling a culture of psychological safety is essential for any organisation looking to secure its future in the competitive market.

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Simon Sinek, a renowned leadership expert and author, emphasises the importance of creating environments where individuals can thrive. He suggests that the role of leaders is not solely to come up with ideas but to create a space where great ideas can flourish. You can find our more in his 2014 Ted Talk:

Rebecca Parnell
Rebecca Parnell
Managing Director