A-Z: How to Build a Safer Workplace With Risk Assessment

Running a business comes with its challenges.

In the midst of various responsibilities, being a considerate business owner involves recognizing your ethical duties, making thoughtful decisions, and ensuring compliance with the law.

Prioritizing workplace safety presents you with a complex, multi-step process of compliance. You must identify hazards, strategize on how to minimize them, and prepare for unexpected events.

One valuable tool in this preparedness toolkit that you’ll turn to again and again is insurance claims management software, which can simplify procedures for handling insurance claims and guarantee a more efficient response if unfortunate incidents occur.

But in a changing business environment, not all risks make themselves known. This is where thorough risk assessments will help you identify hazards and devise plans to prevent them. 

By learning about risk assessment and employing effective strategies, you prepare for the opportunities and challenges that lie ahead for your business.

In this article, we'll give you a comprehensive guide to meet legal requirements and create a safer workplace for your employees. 

Why is risk assessment important? 

Ignoring risks and only dealing with problems when they arise costs you time and money and might lead to embarrassing situations. Failures often occur not because the technologies or ideas are inherently flawed but due to neglect or a lack of consideration for their connections to other elements. 

Incorporate thinking about risks and how to address them into your routine. The approach to managing risks for your business isn't about slowing down or complicating things. Instead, it's a tool for safety and informed decision-making, akin to looking both ways before crossing the street to prevent accidents. 

Who is responsible for carrying out risk assessments?

The employer must identify and evaluate risks proactively. If you're self-employed, you can either perform a risk assessment yourself or designate someone with the necessary knowledge, experience, and skills.

Comprehensive risk assessments perform the best with active employee involvement from the start. They often possess the most accurate insights into the hazards associated with their work, making participation in the risk assessment process indispensable.

Once hazards are identified, and risks are assessed, you must communicate the entire risk assessment process and its findings to business leaders. Next, you’ll establish clear risk management, which can be circulated throughout the organization. 

However, the process doesn't conclude here. Once you've communicated the risk assessment guidelines and put them in place, your responsibility as a business owner is to manage them actively. Hold both yourself and the rest of the team accountable for useful risk management.

Types of risk assessments

Risk assessments are indispensable tools for cutting down on potential risks. It’s a useful procedure across sectors; accordingly, various types of risk assessments cater to specific needs and industries.

Large-scale risk assessments

These comprehensive assessments are deployed in complex, high-stakes industries such as nuclear, oil, and gas professions. They apply advanced mathematical and scientific methodologies to quantify and evaluate risks precisely. Large-scale assessments are non-negotiable because errors in these industries can result in severe and far-reaching consequences.

Generic risk assessments

These assessments evaluate risk on a fundamental level for routine workplaces and activities. They concentrate on specific tasks, such as the operation of heavy machinery, to find common hazards. While they follow predefined protocols, generic assessments can adapt to evolving circumstances to maintain ongoing safety.

Site-specific risk assessments

Site-specific assessments delve into particular work areas, scrutinizing factors like layout, equipment, and workforce. They rely on data-driven analysis to pinpoint precise locations and degrees of risk. For example, in a warehouse, they can recognize hazardous zones for employees, facilitating targeted risk mitigation strategies.

Dynamic risk assessment

If your business undergoes constant change, like emergencies or unpredictable environments, consider this kind of assessment. It monitors in real-time and adjusts safety protocols on the fly. Dynamic risk assessments help you prepare to adjust your safety plans in fast-changing situations.

The goal of risk assessments

Evaluating potential dangers and determining their level of risk abide as the two overarching goals of risk assessment. Specific objectives of risk assessments can shift depending on the industry, the type of business, and the regulatory requirements in place. 

Nevertheless, almost all industries and business types share common objectives for conducting risk assessments.

Identifying risks systematically recognizes, ranks, and documents risks, threats, and known vulnerabilities that could damage the organization's operations and assets.

Justifying investments provides a compelling report demonstrating the financial good sense of allocating resources toward security measures to reduce risks and vulnerabilities. This may involve assessing the cost-effectiveness of investments in infrastructure or other assets to mitigate potential risks.

Budgeting determines the financial resources required to address or prevent the identified risks and vulnerabilities. This step is essential for judiciously distributing funds to risk management efforts.

Safeguarding the organization's reputation protects a brand's safety and image. Developing strategies to protect the organization from risks also protects its reputation.

Managing inventory entails keeping a detailed inventory management report of both digital and non-digital assets the organization owns. In case of threats or damage,  it ensures proper asset management. 

Determining ethical practices can happen after conducting a risk assessment. The business will establish a set of ethical practices that employees must adhere to in order to temper hazards. Unethical conduct or violations of compliance will expose the business to significant risks.

Creating a risk profile comprises conducting a detailed risk analysis to pin down the threats that could pose a risk and producing a comprehensive report summarizing the results.

Quantitative risk assessment vs. qualitative risk assessment

Risk assessments can take either a quantitative or qualitative approach.

In a quantitative risk assessment, the customer relationship management (CRM) tool uses numerical values to measure an event's likelihood and consequences precisely. You need these numbers to calculate the event's risk factor, which can be linked to a specific cost estimate.

Qualitative risk assessments are more commonly used and don’t depend on numerical probabilities or predictive loss calculations. Instead, they use a subjective approach to assess and rank risks based on their perceived threat level.

Risk assessment examples

Different industries tailor their risk assessments to meet specific needs and control measures. You might see a few of these examples used across various industries in the real world.

Health and safety risk assessment

Safety managers use this type of risk assessment to evaluate health and safety risks associated with a job, work environment, or current processes. It identifies biological, chemical, energy-related, and environmental hazards. The goal is to make sure a safe working environment is established for employees.

Workplace risk assessment

Typically conducted by office managers and school administrators, this assessment shows that a workplace is free from health and safety threats. It enhances employee productivity by creating a protected work environment. 

This evaluation may also involve steps to monitor the organization's cybersecurity measures, safeguarding it against potential cyber-attacks and data breaches.

Fall risk assessment

Nursing staff in aged care units or centers perform this assessment to determine the likelihood of patients falling. It checks facilities, equipment, and other factors to guarantee the safety of patients and prevent accidents.

Construction risk assessment

This assessment is not up for discussion on construction sites. Teams use it to find potential risks and safety hazards in order to implement corrective measures and comply with safety regulations. It helps protect workers and prevent accidents in a high-risk industry.

Preparing for your risk assessment 

Before diving into the risk assessment process, set the stage by considering several key factors.

Determine the scope

Clearly define what your risk assessment will cover. This means specifying the processes, activities, functions, and physical locations included in the evaluation. Scope management systems can show you how to plan the time and resources required accurately.

Identify the resources required

Lock down the resources necessary to carry out the project planning and execution effectively. This includes allocating the right time, personnel, and financial resources for developing, implementing, and managing the risk assessment.

Choose the relevant stakeholders 

Settle on the parties who will be involved. Apart from senior leaders who must be informed, you must also assemble an assessment team. Assign roles such as risk manager, assessment team leader, risk assessor, and subject matter expert.

Consider the laws and regulations

Recognize that different industries have specific regulations and legal requirements for risk and workplace hazards. For example, organizations in the United States must follow Occupational Safety and Health Administration (OSHA) standards. Align your assessment with these regulations to guarantee compliance. 

Conducting a compliance audit and maintaining a thorough understanding of applicable regulations of OSHA, the Environmental Protection Agency (EPA), and state and municipal agencies reduces compliance risks.

Documentation needed for conducting a risk assessment

It's a common misconception that risk assessments always involve heaps of paperwork. Rather, they can be quite straightforward, often as simple as completing a basic risk assessment form for many routine tasks or activities.

However, as a business owner, you have to stay vigilant about keeping records of significant findings, which should include:

Your purpose statement. Articulate the purpose and scope of the risk assessment. What are you assessing, and why?

Team details. List the names and roles of the team members involved in the risk assessment process. Include their responsibilities and contact information.

Process of risk identification. Document the process of identifying potential risks. Define the criteria or factors to assess and categorize risks (likelihood, impact, severity, vulnerability). Explain the methodology or approach you’ll use for the assessment (qualitative, quantitative).

Identified hazards. Document any potential risks you've identified during the assessment. 

High-risk individuals. Record any individuals at risk due to the task being assessed.

Existing controls. Record current safety measures to mitigate identified hazards. Additionally, note any additional control measures that might be necessary.

Compliance and legal considerations. Check that the risk assessment documentation complies with relevant legal and regulatory requirements.

Risk mitigation strategies. This document proposes strategies for mitigating or managing each identified risk. Include specific actions, responsible parties, and timelines.

Risk assessment process

Risk assessment involves a systematic methodology to identify, analyze, and attenuate risks within a particular context. 

Let's unpack each of the five steps involved in conducting a comprehensive risk assessment.

Step 1: Identify hazards

In this phase, the primary focus is on recognizing potential workplace hazards, which involves thoroughly examining the physical environment, work practices, equipment, and materials.

Consideration should also be given to any specific requirements of vulnerable workers, such as young workers, migrant workers, or disabled people. Look beyond the obvious hazards and consider less apparent ones.

Step 2: Evaluate risks

Once you understand the hazards, the next step is to evaluate the associated risks. Assess the likelihood of harm occurring and the potential severity of that harm. Organizations can prioritize their efforts and allocate resources by assigning risk ratings to identified hazards.

During this step, stakeholders also consider existing controls and their effectiveness. This information aids in determining what further actions to take to manage and reduce the risks. 

Step 3: Decide on control measures

After assessing risks, the focus shifts to devising effective control measures. These protect workers, property, the environment, and the organization. Applying practical measures for safe work is essential here. Strike a balance between the level of risk and the necessary measures to control it in terms of cost, time, and effort.

The hierarchy of controls provides a framework for prioritizing these measures:

Administrative controls. Implement work practices and policies to minimize risks.

Personal protective equipment (PPE). Provide PPE and ensure its proper use when other rules are not feasible.

Substitution. Replace materials, machinery, or processes with safer alternatives.

Engineering controls. Modify equipment or methods to reduce exposure to hazards.

Step 4: Communicate risks

Throughout the risk assessment process, you and your team must communicate clearly with each other. Safety professionals must ensure that all stakeholders, including employees, contractors, and management, understand the identified risks and strategies to prevent or temper them.

This communication fosters a safety-conscious organizational culture and encourages everyone to contribute to risk management actively. It also helps align everyone's understanding of the hazards, potential consequences, and the necessary preventive or mitigative actions.

Step 5: Document and review

Regular check-ins play a critical role in keeping the risk assessment up-to-date. Changes in the workplace, new risks, or inadequate safety measures may call for updates.

To make sure everyone can be held accountable and so you can look back on it later, be sure to document the whole risk assessment process. This means writing down which dangers were found, how risky they are, and how you came to your conclusions.

Risk assessment matrix

You can seamlessly integrate various risk assessment tools into your business's processes. When approached correctly, these tools enable organizations to make well-informed decisions and proactively manage risks before they disrupt daily operations.

One effective way to evaluate and prioritize risks is using a risk heat map or matrix. A risk matrix visually represents the type and impact of a business's risks.

Source: Asana

The size of your risk matrix template can determine the depth of your project risk analysis. Each square within the matrix signifies a combination of risk likelihood and severity, making it essential not to make the matrix smaller than three squares in length and width. 

An ideal choice is a five-by-five risk matrix, allowing for a more detailed examination of each risk. Plotting your risks on this completed matrix template creates a broader color spectrum and provides a more precise visualization of each risk's impact as high, medium, or low.

Keep in mind that risk maps are not set in stone. Businesses must continuously assess their risk maps to address significant hazards.

Additionally, you should have a structured process for regularly reviewing and updating these maps in response to emerging threats and vulnerabilities.

When to perform a risk assessment

Risk assessments are vital in eliminating operational risks and enhancing workplace safety. This section will outline the kinds of situations that require your business to conduct one.

When introducing new processes or steps

You need a risk assessment whenever new procedures or steps are integrated into the automated workflow. The evaluation will identify and handle the risks as soon as possible.

For example, airlines do thorough risk assessments before introducing new aircraft models to appraise potential safety concerns. They also review pilot training to verify that pilots are effectively adapting.

When making changes to existing business processes, equipment, or tools

A risk assessment becomes crucial when modifying existing processes or introducing new equipment and tools. The evaluation helps you understand how these changes impact safety and allows for necessary adjustments to already existing processes to mitigate any new risks.

For example, if a manufacturing company decides to upgrade its production line by bringing in new machinery or altering existing ones, a risk assessment must be done. It ensures that the changes don’t compromise worker safety, product quality, or the overall efficiency of the process.

When new hazards emerge

Conduct a risk assessment whenever new threats arise in the workplace, whether due to external factors or internal changes. An assessment guarantees that these newly identified risks are appropriately evaluated and managed.

When disruptions occur in supply chain management, such as changes in supply and demand, new trade restrictions, shipping delays, or geopolitical tensions, a risk assessment is necessary to understand the impact on production, procurement, and distribution processes.

When audit planning occurs 

Auditors can also conduct risk assessments as part of their audit planning for your company. This helps auditors measure the organization's risk management processes and find areas where improvements may be needed for proper compliance and safety regulations.

Companies subject to environmental regulations, for instance,  may undergo environmental audits. Auditors assess environmental risks, like pollution control measures or hazardous material handling, to comply with environmental laws and prevent environmental liabilities.

What to do after completing a risk assessment

After a comprehensive risk assessment, the subsequent steps ensure you can manage and mitigate the identified risks. 

Here is an improved guideline for what to do after completing a risk assessment:

Communicate. Share the risk assessment findings with relevant stakeholders, both internally and externally. Clearly convey the assessment results and the strategies devised for mitigation. Make sure all team members comprehend their roles and responsibilities in the risk management system.

Create an action plan. Engage with the workforce collaboratively to develop an action plan for lessening potential damage. Consider involving worker safety representatives in decision-making processes for a well-rounded approach to risk management.

Prioritize each risk. Recognize that not all risks carry the same weight. Rank the risks, considering their potential impact and likelihood of occurrence. A risk matrix can aid you in making your line-up d.

Allocate resources. Determine the financial, human, or technological resources required to implement the risk mitigation strategies. Spread them out judiciously to ensure effective risk management.

Get started. Once you reach a consensus on the action plan, focus on meticulously putting the agreed-upon solutions into place. Account for every detail and see that every task is executed according to plan.
Improve processes. Utilize the insights from the risk assessment to foster continuous improvement in your organization's risk management plan. As your organization evolves, so do its risks, necessitating a dynamic approach. Encourage active feedback from employees and stakeholders about the effectiveness of strategies and the overall process. Use the critiques to make necessary adjustments and enhancements.

Constantly monitor risks. Maintain a vigilant and ongoing monitoring system to track the progress of your efforts. Regularly assess the success or shortcomings of the implemented strategies and be prepared to make adjustments as needed.

Effectively mitigate risks

With continuous technological advancements, such as nanotechnology and biotechnology, risk management becomes crucial in identifying and defusing potential hazards. Risk assessment offers a proactive approach to addressing emerging risks and making informed decisions. 

Risk assessment methods look different across industries, but for everyone, the primary goal is understanding potential risks comprehensively. Risk assessment is integrated into our daily lives, guiding our judgments. Most importantly, it doesn't hinder progress but enhances safety, giving us a practical approach to facing real threats. 

Now that you've learned how to identify and assess risk, discover more about project risk management to safeguard your business's future.