Generative AI is rapidly reshaping how we work. From streamlining processes to enhancing productivity, its potential is undeniable. But with opportunity comes risk—and one of the most pressing issues for employers is the psychosocial hazard that Generative AI may create for employees: job insecurity.
The Psychosocial Hazard of Job Insecurity
A recent report highlights that 60% of workers expect AI to replace jobs and cut costs rather than improve their working lives. For many employees, the introduction of AI creates uncertainty about their future. Left unmanaged, this perception undermines psychological safety, leading to stress, disengagement, and even attrition.
The Victorian Government is set to introduce the new psychosocial health regulations in December 2025. Employer’s will now need to consider and appropriately manage psychosocial hazards in the workplace – which extends to an employee’s perception of job security.
Employers must balance the promotion of AI’s efficiency gains with the responsibility to protect employee wellbeing and create clarity about roles, skills, and the future of work.
Four Key Risk Areas Employers Must Address
Privacy & Cybersecurity
When staff use AI alongside business confidential information (including client data), new risks arise around privacy, confidentiality, and cybersecurity. Employers must set clear boundaries to safeguard personal and corporate data.
Accountability & Quality Control
AI can generate, but humans remain accountable. Employees need guidance on when and how to disclose AI use, validate outputs, and avoid “shadow use” that fragments workplace practices and heightens compliance risks.
Bias, Discrimination & Fairness
Using AI in our daily tasks, including activities such as recruitment, AI carries the risk of amplifying bias. Without proper oversight, tools intended to drive efficiency can unintentionally embed discrimination.
Job Security & Workforce Transition
While the future of Generative AI augmenting or replacing employees work is still unknown, and subject to the industry and role in question, the perception of automation risk is real. Employers should adopt a skills-first approach, focusing on transferable capabilities, redeployment opportunities, and investment in staff training to strengthen trust.
How Can Flawless HR Help?
We support employers to take a people-first approach to AI adoption. We can help with:
- Drafting and implementing an AI in the Workplace Policy…
- Updating related policies such as the Code of Conduct, Privacy, and Confidentiality to capture the safe promotion of AI in the workplace.
- Updating position profiles to reflect the use of AI in an employee’s position to promote efficiency, while amplifying their “human” skills.
- Support organisations navigate major workplace change as a result of AI implementation in your workplace.
Our goal is to help organisations embrace AI confidently, without compromising employee wellbeing or compliance obligations.
Preparing For The Psychosocial Safety Regulations
Wondering how to navigate the upcoming psychosocial safety regulations? Our team has put together a helpful guide – From Stress to Strategy: Navigating Victoria’s Anticipated Psychosocial Safety Regulations.
This guide goes beyond explaining the rules. It’s designed to be a hands-on resource, with a clear 6-step framework to help organisations take practical, meaningful action from day one.
Register your interest here: https://lnkd.in/gJYr6j5a
Get in Touch!
If you’d like to ensure your organisation’s AI adoption strategy drives efficiency and protects psychological safety, we’d love to start a conversation.
If you’ve got any burning questions about these changes or you’re not sure how they’ll impact your business, reach out to our team by email hello@flawlesshr.com.au
