This comprehensive guide outlines the best way to assess risks so you can make informed decisions and become more resilient against observed hazards and other uncertainties.
Published 14 Sep 2023
Risk assessment is a systematic approach to determining and evaluating potential threats and vulnerabilities that organizations may encounter. There is no strict standard for conducting risk assessments. Companies can customize this based on their needs. However, learning the fundamental process in conducting risk assessment is crucial in assessing identified or predicted hazards and addressing the challenges effectively. Ultimately, risk assessments, when conducted correctly, safeguards the employees, customers, and the company’s reputation.
Big or small, businesses across industries are exposed to a myriad of risks. If unmitigated, these could impair their ability to operate, decrease their revenues, and eventually lead to their collapse. Having a proper guide in conducting risk assessments helps companies achieve the following:
Having a firm grasp of this methodology and systematically following the procedure facilitates a more holistic way to tackle risks. When qualified professionals (e.g., risk analysts, managers, or officers) possess a thorough mastery of the process, they can modify it in light of certain scenarios to maintain efficacy in continuously evolving environments.
The first step in this process is to determine the hazard or threat and its potential source in the corporate environment, from internal factors (e.g., operational workflows, personnel, finance) to external ones (e.g., market trends and regulatory changes). This is crucial in understanding the extent of the danger and vulnerability of the company.
The next step is to assess the gravity of the risk, the likelihood of its occurrence, and the individuals who will be impacted, either directly or indirectly. This phase helps managers rank the risks from the most severe to the more manageable ones so they focus on what to mitigate first and better allocate resources for the task.
In this stage, relevant personnel develops and applies the measures to reduce or, if possible, eliminate the risk. Three key strategies can be used:
The entire risk assessment process must be recorded and stored for transparency and future reviews. This should include the findings, actions taken, and even photos or videos as these can provide the full context of the entire session.
Periodic reassessment of the identified threats and developed control measures should be done to ensure their continuous effectiveness. This is a must to adapt to changing circumstances.
Businesses are always exposed to risks. Anticipating these by carrying out comprehensive assessments aid in managing risks and preventing critical problems, such as disruptions, financial losses, missed growth opportunities, and non-compliance with legal requirements. While learning how to conduct risk assessments provides companies with adequate groundwork to start the process, using digital solutions like SafetyCulture (formerly iAuditor) will bring about desired results.
Eunice Arcilla Caburao
Eunice is a content contributor for SafetyCulture. A registered nurse, theater stage manager, Ultimate Frisbee athlete, and mother, Eunice has written a multitude of topics for over a decade now.
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