What is risk management?
Risk management is the process of having a plan or approach in place within the organisation to protect any assets, including people, physical resources and other assets so that the organisational objectives can be achieved.
It is a form of measuring possible situations that can go wrong but also about identifying new opportunities that can make a business better. Things that can go wrong include harm to:
- a person
- the company itself
- company premises
- other harm that can impact the ability for the company to continue trading as normal.
Contingency plans should be in place to identify back up plans that would need to be implemented should a risk occur in the workplace.
Risk management is also about identifying any possible scenarios that could have any impact on organisational objectives. In this introductory lesson we will cover hazards, risks, issues and duty of care.
Information provided on this page is a preview of Strategium’s upcoming Workplace Risk Management course.
Learn about key terms and what they mean
Review each flashcard to learn about hazards, risks, issues and duty of care.
Hazards
A hazard is something that has the potential to cause injury or harm to a person, property or the environment. It is a situation that can pose a threat to someone or something.
Risk
A risk is something that can happen that could impact on organisational objectives, the likelihood that harm can occur from the risk.
Issues
Issues are current problems or situations that are already affecting a project, task, or system, often requiring immediate resolution.
Duty of care
Duty of care is the ability to anticipate possible causes of injury and is used in relation to the obligation that a person has when exercising reasonable care with respect to others, including protecting them from harm.
Hazards
A hazard is something that has the potential to cause injury or harm to a person, property or the environment.
Examples
Loose electrical cords
Loose electrical cords running across a walkway.
Improperly secured data
Staff handling sensitive client data without using encryption software.
Risks
A risk is something that can happen that could impact on organisational objectives, the likelihood that harm can occur from the risk. Risk is the likelihood or probability of a hazard causing harm, combined with the severity of the consequences if it occurs. Assessing risk helps prioritise actions and resources to control or eliminate hazards based on their potential impact.
Risk = Likelihood × Impact
Examples
Loose electrical cords
Someone could trip, fall, and injure themselves.
Improperly secured data
A data breach could occur leading to reputational and legal consequences.
Issues
Issues are current problems or situations that are already affecting a project, task, or system, often requiring immediate resolution. Issues are typically existing problems that need to be managed or solved to keep operations running smoothly. Managing issues can also involve mitigating any related risks.
Examples
Loose electrical cords
- Chairs in meeting rooms constantly get stuck on loose cables.
- Outlets are only available in inconvenient locations making staff run cables across walkways.
- Cables repeatedly get tangled and snagged causing staff to accidentally unplug computers.
Improperly secured data
- Staff are not trained on data management and privacy.
- There are no written policies about data security and privacy.
- Company IT system is incompatible with the encryption software.
Duty of Care
Duty of care is the ability to anticipate possible causes of injury and is used in relation to the obligation that a person has when exercising reasonable care with respect to others, including protecting them from harm.
Managers, staff and team members are responsible for their own safety and wellbeing as well as that of their co-workers. Safety is everyone’s job in the workplace. Management has the direct responsibility of training all staff members in risk management procedures.
Examples
Loose electrical cords
Employers should provide safe cable management, ergonomic equipment, and regular workstation assessments.
Improperly secured data
Project leaders must maker sure all staff are trained, systems are compliant, and safeguards are in place before implementation.
Why risk management is important
Risk management is an important part of the workplace, when risk isn’t taken seriously or managed properly harm can occur.
If a hazard is present in the workplace, it is likely that staff and team members will become inefficient, lose interest and motivation, be concerned about going to work, have low job involvement and generally become dissatisfied with the working conditions and their jobs. Managers should always be looking for ways to access information on applying risk management procedures. Information can be gained from internal and external sources.
Project leaders must maker sure all staff are trained, systems are compliant, and safeguards are in place before implementation.
Harm can include:
Risk managements allows you to:
The risk management process
Successfully managing risk is an ongoing process, it includes preparing, responding and reviewing.
Information provided on this page is a preview of Strategium’s upcoming Workplace Risk Management course.
Roles and responsibilities
Understanding your role will help you to recognise your duty throughout the risk management process.
Documentation and information sources
Gain an introductory understanding of the different types of documentation and key sources that are important in risk management.
Return to overview
Return to the Fundamentals of Risk Management overview page.