Managing psychosocial risk during an organisational restructure means looking beyond the roles being removed to the impact on the wider workforce. Use this checklist to support employees and assess risks throughout a restructure.

Even if a restructure achieves its cost-saving targets in the short term, it can still leave an organisation in a weaker position. 

Critical knowledge can disappear, compliance responsibilities can slip through the cracks, unplanned attrition can accelerate and remaining employees can be left with unmanageable workloads and high levels of uncertainty.

“Every restructure really has to have two business cases. It needs to have the benefit of the change, and then the cost of getting the transition wrong,” says Melissa Sweetland, Partner at SHK.

That second case needs to account for the human cost of change, including the psychosocial risks created by various aspects of the restructure, she says.

“HR, the board and executives need to look across the whole organisation. They need to make sure that a change that fixes one part of a business doesn’t break another.”

Below, Sweetland provides insight on the often-overlooked risks of workforce change, from prolonged uncertainty to gaps in accountability. She will explore how HR can put these principles into practice at AHRI’s upcoming ER/IR Unpacked Roadshow.

Managing uncertainty as a psychosocial risk

The psychological impact of organisational restructures is increasingly coming under scrutiny.

In September 2025, SafeWork NSW temporarily halted a university restructure that would make around 150 roles redundant, citing a “serious and imminent risk of psychological harm”.

According to Sweetland, one of the biggest sources of psychosocial risk during a restructure is uncertainty. To prevent unnecessary anxiety, she recommends providing as much clarity as possible around the following aspects: 

• Why the change is being considered
• What is known and what remains undecided
• How the proposed changes could affect employees
• Who is making the decisions and what employees can influence
• When the next update will come
• Who employees can approach with questions and what support is available.

She cautions against dressing up difficult business realities in vague or overly positive language.

“A lot of the time these changes are made because something’s not going as planned – we’ve had a curveball, and it might be in or outside of management’s control. Be transparent about that.”

Another way HR can mitigate the psychosocial impact of uncertainty is by offering ongoing career resilience support.

“A lot of people are sitting back waiting for a career to happen to them,” she says. “Organisations have a responsibility to help people take agency in their own careers – to understand their strengths and the value they add, to maintain a network, to keep their CV and LinkedIn profile up to date, and to know where their experience can take them.”

Employers shouldn’t see this as a threat to retention. As Sweetland puts it, “You don’t leave a great job with a great manager just because your CV is up to date.”

“We’ve spent years professionalising the first 90 days. It’s time to professionalise the final 30. How people leave shapes the organisation that remains.” – Melissa Sweetland, Partner at SHK

Considering the risks for everyone affected

According to Sweetland, a redundancy decision can be legally sound while the process surrounding it still creates avoidable psychosocial harm.

“In all my conversations with CEOs, directors, senior people leaders, almost all of them tell me that people risk sits among the top three of their organisational risks. Yet I’ve only come across three organisations that have offboarding policies that go beyond a legal checklist that starts too late and finishes too early,” she says.

A good offboarding policy should contain a consistent standard for consultation, manager preparation, notice periods, career transition support, handovers, farewells and measures of success, she says. This also helps ensure these responsibilities don’t depend entirely on an individual manager’s judgement.

“We’ve spent years professionalising the first 90 days. It’s time to professionalise the final 30. How people leave shapes the organisation that remains.”

For employees who are being redeployed, Sweetland suggests providing as much learning time and support in their first 90 days as a new employee would get. It’s also crucial to ensure the receiving manager and team are genuinely committed to making the move work.

HR should also consider that employees who remain in their roles may be grappling with higher workloads and the cultural impact of losing colleagues.

“Reviews [with remaining employees should be conducted] at 30, 60 and 90 days. Look at key stats like attrition, absenteeism, customer complaints, supplier feedback – those are all really key indicators of whether the restructure is working.”

Who is accountable for psychosocial risk during organisational change?

Managing the psychosocial risks of change requires clear accountability across the business, says Sweetland.

“HR can’t carry the responsibility alone,” she says. “Boards need to step up – they need to approve the framework for change, not just the business case.”

She recalls hearing from a former chief risk officer at a major ASX-listed company where business units had assessed its restructures separately without cross-functional consultation.

“When the risk function looked across the organisation, it found that roles were being removed which carried compliance responsibilities, critical systems knowledge and dependencies across other parts of the business,” she said. 

“Individually, every business decision made sense, but together they created gaps that nobody identified or owned.”

This is why risk assessments should bring HR, risk, operational leaders and affected business units together to anticipate unintended consequences, she says. 

Each significant risk and stage of the process – such as handovers, outplacement support and post-restructure reviews – also needs a clear owner.

HR should be involved before the decisions are settled, she adds.

“HR is there to challenge assumptions, establish consistent practice, prepare managers and coordinate the career support – and then line managers have to put the plan into place,” she says. 

“They need to understand the decision, rehearse the conversations and be ready to respond to concerns. They shouldn’t be inventing the process in the room.”

“HR can’t carry the responsibility alone. Boards need to step up – they need to approve the framework for change, not just the business case.” – Melissa Sweetland, Partner at SHK

A psychosocial risk assessment checklist for organisational restructuring

Before moving forward with a restructure, employers should be able to answer the following questions about its likely impact and how the transition will be managed.

• Have we assessed the combined impact of changes across business units?
• What work will stop, continue or transfer, and who will own it?
• Could critical knowledge, compliance responsibilities or business relationships be lost?
• Have we considered the impact on employees leaving, moving roles and staying?
• Are redeployment options realistic, with adequate training and receiving-manager support?
• Have managers been briefed and prepared for difficult conversations?
• Are handovers, career support and workload changes properly resourced?
• Who owns each action, and when will we review whether the transition is working?
• Are we monitoring indicators such as attrition, absenteeism, customer complaints and supplier feedback?

These checks are relevant during any period of major change, such as when organisations introduce new technology, redesign roles or change how work is allocated, says Sweetland.

She stresses that the goal isn’t to eliminate the discomfort that can come with difficult decisions.

“The decision might be unpopular, but the process can still be safe,” she says. “People can understand why change is needed and still be upset by it. But the question is whether the way it’s being managed is adding avoidable uncertainty, pressure or harm.”

🧰 HR’s career resource toolkit

• Event: Hear more from Sweetland and other experts at AHRI’s ER/IR Unpacked roadshow event.
• Podcast: Managing safety risk during redundancy, redeployment and restructuring – ER/IR Unpacked
• Learning: Gain tools and insights to effectively manage the psychological and emotional challenges of change with this course from AHRI.
• Article: A five-step framework to get redundancy conversations right