As organizations enter the new year focused on driving growth and elevating performance, a critical risk continues to go overlooked: the absence of psychological safety in the workplace.
Psychological safety is a foundational requirement for effective compliance, sound decision-making and strong business performance. When employees don’t feel safe to speak up, organizations lose visibility into risk, culture erodes and innovation slows. In these environments, even the most thoughtfully designed policies and strategies fall short.
Despite its importance, Brightmine research reveals only 36% of HR representatives say most employees feel “very safe” expressing constructive criticism without fear of retaliation. Even more telling, just 38% say company leaders actively encourage and accept constructive criticism.
In a business environment marked by heightened uncertainty and constant change, open dialogue is essential. Yet many organizations are unintentionally reinforcing silence at precisely the moment that transparency and accountability are needed most. For HR leaders, addressing this challenge starts with understanding where silence shows up, what it costs the organization, and the practical steps needed to foster a culture grounded in psychological safety.
The Compliance Risk: Silence Creates Exposure
From a compliance standpoint, low psychological safety in the workplace presents a serious and often underestimated risk. When employees fear retaliation for speaking up, they are far less likely to report misconduct or policy violations.
Effective compliance programs depend on participation, as policies and codes of conduct are only as strong as employees’ willingness to use them. When people don’t trust that their concerns or feedback will be handled fairly, compliance systems only exist on paper.
The result is a false sense of security. Unreported issues give organizations the impression that they are protected from risk. In reality, that risk is just quietly accumulating beneath the surface. Over time, minor and easily addressed concerns can escalate into significant regulatory, legal and reputational consequences.
The Culture Risk: Leadership Behavior Sets the Standard
Leadership behavior is one of the strongest determinants of whether employees feel safe speaking up. Yet Brightmine data shows that at more than one in four companies, leadership’s attitude toward criticism is described as “resistant, avoidant, punishing, or dismissive.”
Employees take cues from how leaders respond to disagreement, feedback and change. When leaders react defensively, dismiss concerns or discourage feedback, employees quickly learn that silence is safer than honesty. Eventually, this can lead to self-censorship and a culture where issues remain hidden until they escalate.
The impact also extends directly to retention. Employees who feel unheard or undervalued are more likely to disengage or leave the organization altogether. According to research from the American Psychological Association (APA), only 19% of workers experiencing higher psychological safety reported an intent to look for a new job within the next year, compared to 41% of those experiencing lower psychological safety.
At the end of the day, psychological safety is largely set from the top down. When leaders don’t model openness and accountability, employees pull back. Engagement drops, top talent walks, and organizations pay the price.
The Business Risk: Innovation Undermined
The business implications of low psychological safety are just as significant as the compliance and culture risk. Innovation depends on diverse perspectives, debate and experimentation. When employees don’t feel safe to share their ideas or challenge the status quo, organizations create blind spots and weaken their ability to adapt.
Research from MIT Sloan reinforces this connection. The study found that training programs focused on psychological safety and perspective-taking were linked to measurable performance improvement. Teams that applied these skills through structured dialogue addressed business challenges more effectively and achieved revenues 25% above yearly targets.
Psychological safety, in other words, isn’t just a cultural ‘nice-to-have’ but a measurable driver of business outcomes.
The Actions to Drive Change
Improving psychological safety requires embedding it into how organizations lead, manage and measure behavior. For HR leaders, that work starts with four core actions:
- Train leaders and people managers to give and receive feedback constructively.
Brightmine data revealed that nearly half of organizations (47%) offer no training to help their workforce handle constructive criticism. This gap helps explain why many leaders struggle to cultivate psychologically safe cultures. To address this, organizations should consider implementing mandatory, scenario-based training that focuses on giving and receiving criticism constructively, especially in high-pressure moments.
While training should be companywide, middle managers deserve particular attention. Harvard Business Review research finds that newly promoted middle managers, especially those who’ve been in their roles for less than three years, tend to feel the least psychologically safe. Without targeted support to help build confidence and leadership presence among middle managers, organizations risk reinforcing a culture of silence that ripples across teams.
- Measure leadership behavior to understand how leaders respond to challenges in practice.
Next, organizations should evaluate how leaders respond to feedback and challenges in real situations. HR leaders can consider incorporating 360-degree feedback into performance reviews to assess whether leaders are responding to feedback constructively and modeling openness in practice.
- Build clear and trusted feedback and reporting channels.
Beyond measuring leadership behavior, organizations should also ensure employees feel empowered and safe to raise concerns and share their ideas with fear of retaliation. Tools like pulse surveys and open forums can help create structured opportunities for feedback. They give leaders visibility into employee sentiment and also reinforce that speaking up is expected and encouraged, not punished.
- Demonstrate follow-through when concerns are raised.
Arguably the most important step is follow-through. Nothing erodes trust and safety faster than inaction. It is critical that leaders listen to employee feedback without judgement, document conversations and follow up on items to demonstrate that speaking up leads to progress, not negative consequences. When employees consistently see follow through, psychological safety deepens and so does trust.
Psychological Safety is a Strategic Safeguard, not a Cultural Extra
In today’s business environment, organizations can’t afford to leave psychological safety to chance. With deliberate action and consistent follow-through, HR leaders can turn openness into a strength that drives engagement, performance and retention.
Amanda Czepiel is the US Country Manager at Brightmine, a leading global HR and data insights provider. Amanda leverages her expertise as a licensed attorney with over 20 years of business compliance publishing experience to lead Brightmine’s US business, where she focuses on sharing insights on the needs and challenges of HR professionals. Prior to her current role, Amanda headed the content team at BLR, leading its HR and environmental, health and safety (EHS) editorial operations in its workflow, training, event and media offerings.