Why do I need a risk assessment?

A risk assessment is a critical part of success for any business, and for many, it is actually a mandatory requirement. Regardless of industry, size, or amount of time in business, all businesses face a number of hazards that could create various risks and impacts to the business.

That’s why it is important for all businesses to evaluate the risks that could have negative impacts on their business. This will ensure that all employees are aware of these risks, how to identify them, and how to respond to them in a way that keeps the business running smoothly with as little damage as possible.

Risk assessments give the business more control of what may seem uncontrollable. By identifying and documenting all potential hazards and risks, and creating a response plan for addressing them, employees will know what to expect and when to call out potential risks.

What is a risk assessment?

A risk assessment is a systematic approach for identifying hazards that could negatively impact the business, and determining what risks could be associated with those hazards and how they could be reduced or eliminated.

Risk assessments should include anything from hazardous materials, fires, injuries, and more.

Completing a risk assessment can have a number of positive effects on your business. It can:

  • Identify health and safety hazards

  • Evaluate and increase the effectiveness of any existing response measures

  • Create new responses for hazards that were not previously identified

By exposing risks and determining how to respond to them, the business will be in a better position to maintain operations, finances, and perception should a risk occur.

Once an event occurs, relevant risk assessments should be reviewed to determine whether the documented response was valid and effective. If not, enhancements should be made to ensure the response is conducted properly should any future events occur.

How to complete a risk assessment

To complete a risk assessment, the Health and Safety Executive (HSE) recommends a five-step process:

  1. Identify potential hazards: You can identify hazards by completing observations, reviewing past incident reports, interviewing employees, and reviewing manufacture data.

  2. Identify who the hazards could harm: This may include employees, contractors, clients, suppliers, and other stakeholders. It is also helpful to list any specifications if a hazard is more likely to affect some people more than others based on age, sex, pregnancy, etc.

  3. Evaluate the severity and likelihood of risks and determine precautions: Label each risk with a level of severity, and determine how likely it is that this risk could occur. By understanding severity and likelihood, the business will be in a better position to respond to high threats with a high likelihood of occurrence, in addition to any other occurrence. Plus, by providing a risk rating, employees will be able to identify the high-severity risks and can also help prioritize solutions for these risks as the top priority.

  4. Implement controls and record findings: Create a plan to regularly assess these risks and determine if their severity or response needs to be adjusted.

  5. Review assessment: Any time an accident or incident occurs, or if processes change, this assessment should be reviewed to determine if any adjustments must be made.

When completing a risk assessment, it’s important to also consider the

  • Methods and procedures used to process, handle, or store substances, electronics, and other products and materials

  • Number of people who may be exposed and the level and frequency of exposure

  • Tasks that are completed as well as how long, how often, and the location where they must be completed

  • Tools and machinery used and how they are used

  • Product or process life cycle

  • Level of training employees will or should receive

Risk assessments are a key step for business continuity and are a requirement for many industries and international businesses. Without identifying hazards and risks, many businesses leave themselves vulnerable to risks that could have been planned for and reduced.

A business cannot have business continuity or expect to thrive in the face of an event without having a plan in place to identify and respond to risks. Even with a plan in place, it’s important to consistently evaluate the plan to ensure it is adjusted for maximum success as processes and needs change over time.

Keeping records of your assessment and any control actions taken is a critically important part of the process. Some regulations may even require you to keep these records for a certain number of years. But these records are also important because they are recorded proof that you:

  • Conducted a review of the hazards

  • Determined the hazard risks

  • Implemented control measures

  • Reviewed and monitored them

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