Psychological safety: a strategy for people, productivity and profit

We’ve all heard horror stories about toxic workplaces. Some of us will have even shared the misfortune of experiencing one first-hand. Just think about the last time you had a great idea at work but hesitated to share it because you didn’t know how your boss might respond. Or maybe you spotted a potential problem but stayed quiet because you were worried about what repercussions might follow.  

This is what happens in workplaces without psychological safety and it’s costing companies more than they realise: in people, productivity, and profit.  

So, what does psychological safety mean? 

At its heart, psychological safety is about creating a space in which employees feel safe to speak up, own up to their mistakes, and ask what might seem like stupid questions – free from the fear of mockery, hostility or criticism. It echoes, in almost every way, Maslow’s foundational needs of safety, security, and support. 

But why should business leaders care? 

Here's the interesting part - psychological safety isn't just about making people feel good (though that is important). It directly affects your bottom line. 

When people feel safe to speak up, companies see better results across the board. Teams solve problems faster because people feel safe to flag issues early. Innovation increases because everyone feels comfortable sharing their ideas – even the silly ones. Perhaps most importantly, companies retain their best talent because people want to stay where they feel valued and heard. 

Let the numbers tell the story 

Companies with mature levels of psychological safety typically see: 

• Lower staff turnover (which saves significant recruitment costs) 

• Fewer expensive mistakes (because people speak up when they see problems) 

• Better customer feedback (since employees feel empowered to improve their service) 

• More innovation (as people feel they can freely share new ideas). 

So, how do business leaders make it happen?  

Creating a psychologically safe workplace culture isn't complicated, it requires consideration and consistency.  

Leaders need to model it by admitting their own mistakes and being willing to show vulnerability. Managers need to respond well when people bring up problems or share (what might seem like) half-baked ideas. Organisations need to reward, not punish, the kind of honesty that leads to improvement. 

How do you know if you're making progress?  

The real test of psychological safety is often seen in the small, everyday moments. It's visible when a junior employee feels confident enough to question a senior leader's assumption during a meeting. It manifests when team members openly discuss what went wrong in a failed project without pointing fingers. You'll see it when people freely admit they don't understand something and ask for clarification or when they bring forward concerns about deadlines or resource constraints without the fear of being labelled as "negative" or "not a team player." 

These cultural indicators, combined with the quantitative metrics below, paint a complete picture of your organisation's psychological safety journey:  

• More people speaking up in meetings 

• Increased reporting of potential problems 

• Better engagement scores 

• Improved team performance 

• Higher innovation rates 

• Higher retention rates (and, in turn, lower recruitment costs).  

The bottom line 

The truth is, building psychological safety isn't just about creating a more pleasant workplace – it's about unlocking the full potential of your organisation's most valuable asset; its people.  

In an era where competitive advantage increasingly comes from human ingenuity rather than physical assets, the companies that thrive will be those that create environments where every voice can be heard, where innovation isn't stifled by fear, and where mistakes are viewed as stepping stones to success rather than career-ending failures.  

The cost of inaction – in lost talent, missed opportunities, and unrealised potential is simply too great to ignore. The question isn't whether your organisation can afford to invest in psychological safety; it's whether it can afford not to.  

 

 

If you’d like to talk to our Wellbeing Team about how you can transform wellbeing in your workplace, you can contact them by email here: [email protected] or by phone: 0208 600 1000