How to Retain Employees and Psychological Safety in Change Environments

Written by: Team Welligence

March 23, 2022

Mergers, acquisitions, and other company transitions—including rapidly expanding the executive team, rebranding, leadership shifts, or other initiatives to prepare for the next phase of the company lifecycle—are disruptive to company culture. How your organization handles change and prepares employees for resiliency may be critical for long-term success.

One key element of an employee-first workplace culture that attracts and retains talent is psychological safety. Ensuring that existing employees, new employees, and every member of the organization has a psychologically safe place to work will help your company scale without losing the ability to innovate and build on existing strengths.

Harvard School Professor, Amy Edmondson, defines psychological safety as a “shared belief held by members of a team that the team is safe for interpersonal risk-taking.” She further defines it as “a sense of confidence that the team will not embarrass, reject, or punish someone for speaking up.”

Without psychological safety, employee engagement will fall and with it the employer brand—and ultimately competitive advantage and growth momentum.

Making psychological safety a business imperative

While the concept of psychological safety seems intuitive, it’s actually a difficult concept to put into practice—especially when the focus is on business growth and change opportunity. For that reason, during times of organizational change, psychological safety must be a business priority.

Simply stating that the company values its employees, their opinions, and their contributions does not create a safe work environment—especially when the executive and management teams are growing rapidly or changing. Regardless of their stage in the growth cycle, organizations must make psychological safety a key leadership development competency.

During times of organizational change, psychological safety must be a business priority.

Organizations that once prided themselves on workplace culture, employee engagement, and psychological safety when they were first founded, in the early days of the start-up phase, and even into a few rounds of funding may find that sudden growth, mergers, acquisitions, or other change models can be a trigger event for a sudden shift in employee sentiment. Relying on the memory of how things used to be does not position a company for future positive employee experiences. In times of change, employee sentiment shifts are likely due to changes in the workplace and culture that no longer provide a supportive, nurturing, and safe environment.

Company leaders may be surprised to know that just three in 10 U.S. workers strongly agree that their opinions seem to count at work, according to Gallup’s State of the American Workplace Report—a critical element to psychological safety. Other elements include a feeling of belonging, the ability to be one’s authentic self–including being honest about their mental wellbeing–freedom to learn and make mistakes, the ability to make a contribution and feel it’s valued, and permission to make suggestions and disagree without retribution.

Only three in 10 U.S. workers strongly agree that their opinions seem to count at work


Like any skill, leading with empathy and a coaching mindset are not inherent abilities in all managers—especially those whose top skill is their business acumen, subject matter knowledge, or results-oriented mindset. Making the creation of a positive workplace environment that fosters psychological safety for employees a business imperative opens the door to providing opportunities like mental health wellness training and education to team members across the board.

For tips about how to create pyschologically safe workplaces, read our blog: 5 Keys to Better Mental Wellness in the Workplace

Psychologically safe managers

Creating a psychologically safe environment doesn’t rest solely with managers and executive team members, but it begins there. Communication styles and the resulting messages these individuals express to others have a direct trickle-down effect to the rest of the organization.

You cannot expect middle managers who are treated with disrespect, harshness, and constant criticism to communicate with empathy to their direct reports. A culture is built from the top and by example. When success is defined by financial outcomes alone, leaders with antisocial behavior and lack of empathy will begin filling your executive ranks.

On the other hand, leaders who are focused on building teams, leading with empathy, and measuring their success by the success of those around them will draw people toward them and build teams that work with them to meet business goals.

Taking inventory of your executive team’s leadership styles will help you to determine your path forward to establishing—or re-establishing—a psychologically safe workplace. Starting with employee pulse surveys, reviewing exit interviews and employee complaints, and analyzing feedback to HR or other executives will help begin the process of evaluating your workplace wellness quotient.

Individual managers can self-evaluate by honestly considering these five signposts of team psychological safety:

  1. Do team members speak up in meetings, or do you feel like you’re the only one talking—you may even experience having to ask people directly for questions or feedback and only get agreement with your point of view.

  2. Do your direct reports feel comfortable stating their opinion—even if it isn’t directly in line with your own? How have you reacted? Did you thank them for the feedback and consider it, or did you make them feel they were doing something wrong by not agreeing with you?

  3. Is there an active exchange of ideas on messaging boards like Slack or Microsoft Teams? Or do people keep their conversations private?

  4. Do your employees freely share their emotional state of mind? If and when they do, are you able to respond in a way that’s empathetic and helpful? Do you have the tools to confidently respond without making the situation worse?

  5. Are you running your team in accordance with company policies for things like workplace choice, holidays, office hours, and no meeting Fridays, or have you set your own policies based on your management needs—or perceived needs?

If you’ve answered “no” to any of these questions, your team is in danger of feeling unsafe, undervalued, and disengaged at work. Seek out training opportunities and discuss mental health wellness training as an option for yourself and your company. Chances are, if your team is feeling unsafe, there may be a growing culture of distrust and disengagement. Disengagement is often followed by looking outside the company for employment opportunities.

According to a recent article in Ragan’s Workplace Wellness Insider, “If the job searcher (48% of the workforce, per Gallup), is a subset of disengaged workers, then disengagement is the issue—Gallup says 74% of workers are disengaged in their current jobs, according to recent Gallup research.”

The article goes on to say, “Disengagement is costly. Lost productivity of not engaged and actively disengaged employees is equal to 18% of their annual salary. Disengagement would cost a company of 10,000 employees with an average salary of $50,000 per worker $60.3 million a year. It costs $9,000 a year to keep each disengaged worker and between $25,000 and $100,000 to replace them.”

On the other hand, managers who are able to create psychological safety in the work environment share certain skills and qualities, including:

  1. Provides mentorship and coaching

  2. Trusts team members to do their jobs without micromanaging

  3. Leads with empathy and shows genuine concern for personal well-being as well as professional success

  4. Empowers team leads to manage their direct reports without undermining them

  5. Listens carefully and acknowledges ideas

  6. Shares information and communicates transparently

  7. Treats mistakes as learning opportunities

  8. Allows others to try something new, even if it’s unproven

  9. Welcomes opinions, even when they don’t align with their own

  10. Recognizes the signs of burnout, anxiety, stress, and depression and knows how to respond

Resiliency, engagement, innovation, and psychological safety

Change is stressful. Even if the change means the company will have more opportunities to grow, more products to sell, or more resources to continue to build on momentum, employees are likely to feel anxious and stressed—and rightfully so. Ignoring the psychological effects of change on employees, or expecting them to just “get on board” will lead to staffing problems and damage to the culture that may be hard to repair.

Disengagement is costly. Lost productivity of not engaged and actively disengaged employees is equal to 18% of their annual salary.


Hoping you can “just get through this phase” and focus on the employee aspect later will leave the organization with large holes in talent and scrambling to have enough people to help meet future goals.

On the other hand, slowing down just enough to  train managers to lead with empathy, encouraging a mentoring and coaching culture, and embracing experimentation, new ideas, and productive conflict will set your company up for a growth trajectory that starts today and leads you into the future.

Individual contributors should also be included in the psychological safety conversation. It’s often their interactions with other team members that can create an atmosphere of mistrust. New employees who are given free reign to unilaterally make changes to processes may seem like a way to implement more efficiency, but it’s likely to backfire as existing team members find their own workflows disrupted and chaotic.

It costs $9,000 a year to keep each disengaged worker and between $25,000 and $100,000 to replace them.


When process changes are necessary, transparency and clear communication about the changes and how they will affect individual workflows will eliminate the chaos and uncertainty caused by change. Communicating the expectations that growth does not mean sudden and unexplained change across the board shows respect for the work already being done and the efforts that have gone into preparing the company for this new phase of growth and change.

Establishing a culture of open communication and helping new team members to share new ideas while remaining respectful to processes already in place will help the team grow without feeling disruption. As new employees are hired, the company culture, processes, and dedication to psychological safety should be key components to the onboarding process.

From the top down and throughout the organization, creating an environment of psychological safety where employees are free to share ideas, show up as their authentic selves, and share their true emotional and mental state isn’t as easily accomplished as you might imagine. Beginning with management training and then including individual contributors in resilience training is a solid place to start.

Ready to learn more? At Welligence, we specialize in mental health training programs for the workplace. Our courses are designed to lead companies to overcome the stigma of mental health and reduce the decline in productivity that results from it by way of education and implementation of workplace wellness best practices. Find out how we can help you normalize the mental health conversation in your workplace.