Mark
Zuckerberg, founder of Facebook, once said, “The biggest risk is not taking any
risk. In a world that's changing really quickly, the only strategy that is
guaranteed to fail is not taking risks.”
While you’ve
probably heard similar advice from prominent figures throughout the years (we
found several quotes just researching for this article), we think you’ll agree
that there are some risks your company doesn’t want to take. Risks that put the
health and well-being of your employees in danger.
With a risk
assessment process, companies can identify and prepare for potential risks in
order to avoid catastrophic consequences down the road and keep their personnel
safe.
What
is risk assessment?
With the risk
assessment process, users take a look at their organizations to:
- Identify processes and situations that may cause harm, particularly to people.
- Determine how likely it is that each hazard will occur and how severe the consequences would be.
- Decide what steps the organization can take to stop these hazards from occurring or to control the risk.
It’s important
to note the difference between hazards and risks. A hazard is anything that can
cause harm, including work accidents, emergency situations, toxic chemicals,
employee conflicts, stress, and more. A risk, on the other hand, is the chance
that a hazard will cause harm. As part of your risk assessment plan, you will
identify hazards but then calculate the risk or likelihood of the hazards
occurring.
The goal of a
risk assessment plan will vary across industries, but overall, the goal is to
help organizations prepare for and combat risk. Other goals include:
- Providing an analysis of possible threats
- Preventing injuries or illnesses
- Meeting legal requirements
- Creating awareness about hazards and risk
- Creating an accurate inventory of available assets
- Justifying the costs of managing risks
- Determining the budget to remediate risks
- Understanding the return on investment
Businesses
should perform risk assessment before introducing new processes or activities,
before introducing changes to existing processes or activities (such as
changing machinery), or when the company identifies a new hazard.
The steps used
in risk assessment form an integral part of your organization’s health and
safety management plan and ensure that your organization is prepared to handle
any risk.
5
steps in the risk assessment process
Before you
start the risk management process, you should determine the scope of the
assessment, necessary resources, stakeholder involved, and laws and regulations
that you’ll need to follow. Then proceed with these five steps.
1.
Identify the hazards
The first step
to creating your risk assessment plan is determining what hazards your
employees and your business face, including:
- Natural disasters (flooding, tornadoes, hurricanes, earthquakes, fire, etc.)
- Biological hazards (pandemic diseases, foodborne illnesses, etc.)
- Workplace accidents (slips and trips, transportation accidents, structural failure, mechanical breakdowns, etc.)
- Intentional acts (labor strikes, demonstrations, bomb threats, robbery, arson, etc.)
- Technological hazards (lost Internet connection, power outage, etc.)
- Chemical hazards (asbestos, cleaning fluids, etc.)
- Mental hazards (excess workload, bullying, etc.)
- Interruptions in the supply chain
Take a look
around your workplace and see what processes or activities could potentially
harm your organization. Include all aspects of work, including remote workers
and non-routine activities such as repair and maintenance. You should also look
at accident/incident reports to determine what hazards have impacted your
company in the past.
2.
Determine who might be harmed and how
As you look
around your organization, think about how your employees could be harmed by
business activities or external factors. For every hazard that you identify in
step one, think about who will be harmed should the hazard take place.
3.
Evaluate the risks and take precautions
Now that you
have gathered a list of potential hazards, you need to consider how likely it
is that the hazard will occur and how severe the consequences will be if that
hazard occurs. This evaluation will help you determine where you should reduce
the level of risk and which hazards you should prioritize first.
Skip ahead and learn how you can create a risk
assessment chart to help you through this process.
4.
Record your findings
If you have
more than five employees in your office, you are required by law to write down
your risk assessment process. Your plan should include the hazards you’ve
found, the people they affect, and how you plan to mitigate them. The record—or
the risk assessment plan—should show that you:
- Conducted a proper check of your workspace
- Determined who would be affected
- Controlled and dealt with obvious hazards
- Initiated precautions to keep risks low
- Kept your staff involved in the process
5.
Review assessment and update if necessary
Your
workplace is always changing, so the risks to your organization change as well.
As new equipment, processes, and people are introduced, each brings the risk of
a new hazard. Continually review and update your risk assessment process to
stay on top of these new hazards.
How
to create a risk assessment chart
Even though
you need to be aware of the risks facing your organization, you shouldn’t try
to fix all of them at once—risk mitigation can get expensive and can stretch
your resources. Instead, you should prioritize risks to focus your time and
effort on preventing the most important hazards. To help you prioritize your
risks, create a risk assessment chart.
The risk
assessment chart is based on the principle that a risk has two primary
dimensions: probability and impact, each represented on one axis of the chart.
You can use these two measures to plot risks on the chart, which allows you to
determine priority and resource allocation.
Be
prepared for anything
By applying
the risk assessment steps mentioned above, you can manage any potential risk to
your business. Get prepared with your risk assessment plan—take the time to
look for the hazards facing your business and figure out how to manage them.
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