Fear of failure: Why Australians are holding themselves back at work

Fear has always played a role in human decision-making, but in 2025, it seems to have found a particularly strong foothold in the Australian workplace. Recent research from people2people reveals that fear of failure is preventing employees across all generations from taking on new challenges, pursuing promotions, and speaking up when it matters most. The impact of this mindset goes far beyond individual hesitation. It ripples through company cultures, stifling innovation, slowing progress, and curbing the confidence required to grow careers and businesses alike.

While some level of caution can be constructive, too much of it breeds stagnation. Four in five Australians admit to staying silent at work to avoid mistakes, and half believe their workplace doesn’t tolerate failure in the pursuit of innovation. For employers, this presents a clear warning: when risk-taking disappears, creativity and engagement follow. For employees, it’s a reminder that professional growth rarely comes without discomfort.

As people2people’s research shows, 57% of Australian employees have avoided a new job or promotion because of fear of failure. That statistic reflects a culture where people play it safe rather than step forward — and the cost of that choice is mounting.

“Fear of failure is paralysing employees across all generations, but especially the younger workforce.”

On a recent Australia Market Update, Host Peta Seaman, SA Managing Director at people2people, was joined by Melanie Smith, Leadership and Career Coach at Metanoia Consulting Services, to unpack why this fear persists and how workplaces can shift from a culture of caution to one of curiosity.

Melanie explained that a mix of job market uncertainty, mental health challenges, and unsupportive company cultures are reinforcing employees’ reluctance to take risks. “Lots of people are hesitant to take a risk in messing things up because they’re worried about the repercussions and the lack of opportunity in the market,” she said. “When you add burnout and exhaustion into the mix, people simply don’t have the energy to recover from setbacks.”

She also emphasised that when people are too afraid to take risks, speak up, or accept new challenges, businesses lose out on innovation and individuals miss out on growth. It’s a dynamic that can quietly erode engagement and hinder the kind of progress that drives both people and organisations forward.

Fear manifests differently across generations. Gen X workers, for instance, are the most likely to avoid promotions due to fear of failure, while younger employees tend to stay quiet to avoid making mistakes. Melanie believes the reasons for this lie in generational experience and social conditioning. Older professionals often carry memories of stricter, less forgiving workplaces, while younger ones grapple with pressures from social media and the need to appear perfect. Both face the same outcome: missed opportunities.

The cost of fear extends beyond individual ambition. Organisations that fail to create environments where mistakes are tolerated risk losing agility and innovation. “If you have a culture of blame, people won’t put themselves out there,” Melanie noted. “The companies that get this right are the ones that will flourish into the future, particularly as technology transforms every industry.”

Her advice for employees centres on self-awareness and perspective. She encourages individuals to look at risk with curiosity rather than anxiety. “When you zoom out, is the risk really that big in the scheme of things? If you adopt a learning mindset, the risk diminishes because you’re focusing on what you can gain rather than what you might lose.”

For employers, the responsibility lies in creating cultures that normalise learning and iteration. Regularly discussing lessons from failure, celebrating progress instead of perfection, and rewarding effort as much as outcomes can help teams build confidence to innovate. As Melanie put it, “Organisations need to celebrate learning over perfection — that’s what will create forward momentum for everyone.”

How can employees and leaders overcome fear of failure at work?

The fear of failure won’t vanish overnight, but workplaces that embrace experimentation and compassion are far more likely to unlock untapped potential. When employees are supported to take calculated risks, creativity flourishes, engagement deepens, and innovation follows naturally.

1. Reframe mistakes as learning opportunities. Treat failure as feedback. Each setback contains lessons that move both people and organisations forward.
2. Start small with risk-taking. Whether it’s presenting to a small group or pitching a new idea, incremental challenges help build resilience and confidence.
3. Encourage open discussion. Normalising conversations about failure reduces stigma and helps teams see mistakes as part of growth.
4. Prioritise wellbeing and support. Employees perform best when they feel psychologically safe and energised — not burnt out.
5. Reward effort, not just outcomes. Recognising courage and curiosity builds a culture that values progress over perfection.
6. Develop growth-minded leadership. Managers who model humility and transparency around their own missteps inspire others to take thoughtful risks.