Keeping your Business Healthy - Risk Assessment

Risk assessment is a critical step in ensuring that the people in the workplace remains healthy and safe. It involves identifying and analyzing any potential hazards within the premises of the company. After identifying and evaluating any hazards and its severity, it is then determined what are the preventive measures that has to be taken effectively in order to prevent or eliminate these from happening.

Benefits of Risk Assessment

Evaluation of Threats and Hazards

Performing a risk assessment is important because it enables the company to rigorously evaluate any external or internal threats and be able to identify and analyze its current security vulnerabilities and be able to check its inefficiencies. By conducting these, it enables the organization to have a glimpse if their current security controls are an effective defense mechanism against any possible hazards that may occur. Lastly, it gives the organization the opportunity to address any adverse impacts and improve their development of any security plans and policies.

Reduction of Costs

A risk assessment helps you eliminate or minimize work-related injuries and thus leading to lowering the company’s costs regarding this issue. The costs of conducting and managing risk assessments can also be a way of investing in minimal changes within the workplace compared to not conducting any of these. It also helps in determining and understanding the financial risks that comes with it. Moreover, it reduces the chances of lawsuits, fines, or penalties from any non-compliance issue.

Optimization of Productivity

Eliminating any barriers that employees may encounter during their work can help and provide them the necessary tools needed to complete tasks assigned to them and more importantly their productivity and the quality of their work.

Risk assessment is a way of demonstrating to the employees that their security is greatly valued by the company and it may result to them feeling more secure and increase their motivation within their teams. Ensuring a safe, healthy, and a stress-free environment for the employees may lead to positive employee attitudes and by doing so employees will more likely want to remain working with the company thus decreasing any employee turnover.

Common Types of Business Risk

Compliance Risk

It is crucial for any company to ensure that they are complying with the laws and regulations to avoid paying for any significant fines and penalties. Ensuring that the company is following any new changes with the laws and regulations is vital in avoiding any non-compliance complain. Compliance risk may have a great effect on the company in the future and may also become a strategic risk if the company fails to oversee possible errors and if it violates any regulations.

Strategic Risk

In order for a company to succeed, it is essential for them to have a comprehensive and a direct business plan. Although changes can be inevitable, a company must be flexible enough to create new and effective plans to avoid facing any struggles in reaching their goals. Strategic risk is when the company slowly becomes ineffective when it comes to creating any plans and failure to adapt to the current trends and changes.

Financial Risk

A common risk that any company may face is the financial risk. Some companies find it difficult to adjust their plans that somewhat leads to harming the company’s cash flow and creating any unexpected loss. That is why it is vital for the company to minimize any debt and developing a plan to lower its debt and keeping track on the money that is flowing in and out.

Operational Risk

Operational risk can be encountered internally or externally because it involves any combination of factors. It can also refer to any unexpected failure within the company’s daily operation and can also be due to events that are beyond the company’s control such as any natural disaster. The common operational risk that is encountered within the company is people-related and process failure. These risks or mistakes can cost the company’s time, money, and its reputation.

Economic Risk

Economy is one of the constant changes that any company encounters with as the markets continue to fluctuate. A positive change for the economy can help in flourishing any purchase environments while any negative changes or events may decrease the sales of the company. It is essential to track the current changes and trends to be able to identify and develop a plan in case of an economic downturn. To avoid any economic risk, it is crucial for the company to save and maintain a steady cash flow.

Performing Risk Assessment

Identifying Risks

The first and crucial step in performing a risk assessment is identifying and determining the various hazards that the employees and the company may face such as natural disasters, physical and mental hazards, chemical hazards, and biological hazards. It is important to take a closer look on the workplace and determine any process or activities that may cause any harm to the employees and disrupt the daily operation of the company.

Determining its Harm

After identifying any potential risks, it is then important to identify who will be at risk and how these risks may be harm the employees and the company. Companies must review every work routine in various locations and situations where their employees are destined and located.

Evaluating the Risks

Taking into consideration the list of potential hazards, it is then essential to review how it may occur and the consequences that it may bring if it occurred. Through this the company can then determine the places where any risks may encounter and reducing its level and the hazards that should be prioritized.

Recording the Findings

Companies that have five or more employees are mandated to record by writing its risk assessment process. It contains the details of the hazards that are noted and the actions that are taken in reducing or eliminating the risks. The plan must also include the people that may be affected and how to lessen it. These records will serve as a proof that a risk assessment was conducted and will also be the basis for review of the company’s working practices.

Reviewing the Assessment

The environment of the workplace is constantly changing, and any possible risk may also arise. That is why is essential to always ensure that safe working practices are always applied and taking in account new working practices or equipment within the premises of the company. The company must continuously review and update its risk assessment process to be able to prevent any new potential hazards.

Risk Assessment and Your Business

‘An ounce of prevention is worth a pound of cure’ is one of the famous adages that is often heard and spoke. Performing a risk assessment to any business is crucial because failure to create and develop a plan for any unforeseen event can open the door to cyber-attacks. It is important to conduct risk assessment within any business to prevent any irreparable damage and closing of the business.

Business risks may be inevitable and the consequences of it may be destructive, there are various ways to ensure that these can be prevented and minimize its damage to the company. Risk assessments can serve as a preventive strategic tool that helps the business in staying on top of any unpropitious events or situations.

Learn more about risk assessment and how our Risk Assessment Online Courses can help you start a new career.  

The CFS Team
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