We want to find out more about who uses this part of our website and what they think of it. You can help us by completing a short survey. Go to survey Risk management is a step-by-step process for controlling health and safety risks caused by hazards in the workplace. You
can do it yourself or appoint a competent person to help you. Look around your workplace and think about what may cause harm (these are called hazards). Think about: Look back at your accident and ill health records as these can help you identify less obvious hazards. Take account of non-routine operations, such as maintenance,
cleaning or changes in production cycles. Think about hazards to health, such as manual handling, use of chemicals and causes of work-related stress. For each hazard, think about how employees, contractors, visitors or members of the public might be harmed. Some workers have particular requirements, for example young workers,
migrant workers, new or expectant mothers and people with disabilities. Involve your employees as they will usually have good ideas. Once you have identified the hazards, decide how likely it
is that someone could be harmed and how serious it could be. This is assessing the level of risk. Decide:
Control the risksLook at what you're already doing, and the controls you already have in place. Ask yourself:
If you need further controls, consider:
Put the controls you have identified in place. You're not expected to eliminate all risks but you need to do everything 'reasonably practicable' to protect people from harm. This means balancing the level of risk against the measures needed to control the real risk in terms of money, time or trouble. You can find more detailed guidance on controls relevant to your business. Record your findingsIf you employ 5 or more people, you must record your significant findings, including.
To help you, we have a risk assessment template and examples. Do not rely purely on paperwork as your main priority should be to control the risks in practice. Review the controlsYou must review the controls you have put in place to make sure they are working. You should also review them if:
Also consider a review if your workers have spotted any problems or there have been any accidents or near misses. Update your risk assessment record with any changes you make. FEMA reports that 40 to 60% of small businesses never reopen their doors after a natural disaster. AppRiver’s Cyberthreat Index of Business Survey reports that 48% of small to midsize businesses say a major data breach would likely shut down their business permanently. Scary stuff. But if you’re prepared, you’re not doomed. A strong risk management plan can help your business mitigate and plan for such risks and keep you on the other end of those statistics. And you don’t need to be stressed about creating this plan. The risk management process doesn’t necessarily need to be conducted by a risk manager or an expensive risk management consultant. You can create an informed and strong plan by following the steps we’ll outline below. In this article, we’ll go over the five steps of the risk management process and explain the purpose of each, offer questions to ask yourself to get started, and share tips. This is a high-level overview, intended to help you create a simple risk management plan for your small business. Note: Risk management can get extremely complex with exercises such as advanced impact calculations and in-depth root-cause analysis. If you have a larger businesses, are in a high-risk industry such as finance, or are a publicly-held company, you may need an enterprise risk management software solution to manage a mature risk management strategy. What is risk management?Before we dive into the process, let’s take a step back and define risk management: Risk management is the act of identifying, evaluating, planning for, and then ultimately responding to threats to your business. The goal is to be prepared for what may happen and have a plan in place to react appropriately. If you’re new to risk management practices or feel like you need a refresher, we recommend checking out “Why Risk Management Is Important and How Software Can Help.” In it, we explain exactly what a risk management plan is and take you through an example of a business owner developing a risk register and plan. The five steps of the risk management process are identification, assessment, mitigation, monitoring, and reporting risks. By following the steps outlined below, you will be able to create a basic risk management plan for your business. Here’s are the five steps of a risk management process:  Step 1: Risk identificationTo start this process, list out any and all events that would have a negative impact on your business. Expect to add risks to your list over days, maybe even a couple weeks, and know that you won’t think of all possible risks. Be sure to ask leaders in other departments to identify risks, too. You want your plan to be as holistic and comprehensive as possible. Here are some questions to ask yourself to help identify risks:
Tip: Give yourself a timebox for identifying risks, otherwise you’ll get stuck in analysis paralysis and never move on to the next steps. Keep in mind that this entire process is an ongoing one, so you’ll continue to add risks over time. Step 2: Risk assessmentNow that you have a list of potential or existing threats and risks, it’s time to assess the likelihood of the event happening and the level of impact. Doing this risk analysis helps determine the priority levels of each risk so you don’t over- or under-allocate resources for mitigation in the next step. Your assessment can be performed using a matrix like the one below. For each identified risk, determine both the likelihood of it happening and the level of negative impact it would have on your business. Write each risk in the corresponding box. This exercise is also best done in collaboration with leaders of each department. Tip: Your first matrix should be a working document—use a format that makes it easy to move risks around. A virtual whiteboard or a shared document works well. Risk events may need to move around the matrix as you learn more about their impact or likelihood based on feedback from other department leads. Step 3: Risk mitigationRisk mitigation is where you will create and begin to implement the plan for the best way to reduce the likelihood and/or impact of each risk. You may not be able to come up with a mitigation plan for each and every risk, but it’s important to try to identify what changes in your current processes can be adjusted to reduce risk. Start with the risks you placed in the red boxes of your assessment matrix. Create a mitigation plan document where you name an owner for each risk, and describe the steps to be taken if/when the risk event happens. You’ll do this for each risk. Here are some questions to consider as you craft the mitigation plan:
As this step is rather complex, let’s use a medical office as an example for risk mitigation efforts:
Design your risk mitigation plans to be a natural part of business operations, wherever possible. To do this, collaborate with the other leaders in your business to coordinate mitigation efforts as seamlessly as possible into daily operations and strategic planning meetings. Tip: It’s easy to over-prioritize mitigation plans to the detriment of current business operations. You’re not going to be able to implement every plan right away. Try to balance how you implement mitigation plans with ensuring that the burden of risk management doesn’t impact operations. You also don’t want to force an overhaul of an entire process just to mitigate a risk you placed in the green zone in the matrix. That’d be overkill. Step 4: Risk monitoringNow that you have identified, assessed, and made a mitigation plan, you need to monitor for both the effectiveness of your plan and the occurrence of risk events. Monitoring the status of risks, monitoring the effectiveness of mitigation plans implemented, and consulting with key stakeholders are all parts of the risk monitoring step. Risk monitoring should happen throughout the risk management process. Here are some questions to ask yourself as you monitor risks:
Tip: Don’t adopt a “wait and see” approach when it comes to risk monitoring—you may not know exactly when a risk event has occurred. Events such as cyberattacks and regulation changes can sometimes come to light months, even years, later, despite the security controls and risk control plan in place. Make sure that your risk management plan includes continuous monitoring so you aren’t caught off guard with a failed audit when continuous monitoring could’ve helped you take action earlier. Step 5: Risk reportingYou need to document, analyze, and share the progress of your risk management plan. Reporting on risks serves two key purposes: It helps you analyze and evaluate your risk management plan and helps keep stakeholders engaged in mitigating risks by sharing the progress made. When you first start out, reporting can be done by manually entering the status of each risk into your mitigation plan on a regular basis. Then email the report, or at least the highlights, to the other department leads. Risk reporting is where risk management software really shines as it can gather all the data points and create an easy-to-read dashboard. If reporting on risk is an important facet of managing your risk, we strongly recommend considering investing in software. Here’s a look at what risk reporting looks like in the enterprise risk management (ERM) system, Essential ERM. Here are some questions to help you when reporting on risks:
Tip: To garner support for and foster a risk management-focused culture, try to build a narrative for how the company is managing risks. Think about how to blend risk reporting with other functions of the business to tell one cohesive story. Throwing a bunch of stats and colored boxes at stakeholders can be overwhelming and intimidating. But everyone loves a story, especially one that they’re a part of. Reduce the risk of picking an ill-suited systemNow that you know the five steps of the risk management process (identify, assess, mitigate, monitor, and report risks) you should feel confident in building out a risk management plan for your business. If you’re ready to take your risk management plan and reporting to the next level, it’s time to check out risk management software. We’ve got several free resources to help you along your software purchasing journey:
Note: The applications selected in this article are examples to show a feature in context and are not intended as endorsements or recommendations. They have been obtained from sources believed to be reliable at the time of publication. What is the correct sequence of risk assessment?Risk assessment is the name for the three-part process that includes: Risk identification. Risk analysis. Risk evaluation.
Which of the following is the correct order of steps in the risk management process?The 4 essential steps of the Risk Management Process are:
Identify the risk. Assess the risk. Treat the risk. Monitor and Report on the risk.
Which of the following is the first step to risk management?The first step of the risk management process is called the risk assessment and analysis stage. A risk assessment evaluates an organization's exposure to uncertain events that could impact its day-to-day operations and estimates the damage those events could have on an organization's revenue and reputation.
What are the five steps of identification assessing and controlling risks and making decisions that balance risk costs with mission benefits?The following provides a brief outline of the 5-step process requirements.. Step 1 – Identify hazards.. Step 2 – Assess hazards to determine risk.. Step 3 – Develop controls and make risk decisions.. Step 4 – Implement controls.. Step 5 – Supervise and evaluate. ... . STEP 1 - IDENTIFY HAZARDS. ... . STEP 1 (cont.). |
