Risk Identification: 7 Essentials

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Emergency Preparedness checklist

Modern day businesses face various risks to their day-to-day operations. For example, a company’s network may be hacked, compromising employee and customer data. Natural disasters such as hurricanes, tornadoes and wildfires can also impact an organization’s ability to operate. Ensuring the safety of a company and its employees is about more than being able to react quickly to a threat. Effective risk management involves preparing for a threat before it happens.

Professionals who are interested in learning how to identify and mitigate an organization’s risks are likely to find that completing an advanced education is prudent. An online Master of Science in Safety, Security and Emergency Management is designed to provide the education and skills to be successful in this profession.

What is Risk Identification?

Risk identification is the process of identifying and assessing threats to an organization, its operations and its workforce. For example, risk identification may include assessing IT security threats such as malware and ransomware, accidents, natural disasters and other potentially harmful events that could disrupt business operations. Companies that develop robust risk management plans are likely to find they’re able to minimize the impact of threats, when and if they should occur.

Risk Identification Process Steps

There are five core steps within the risk identification and management process. These steps include risk identification, risk analysis, risk evaluation, risk treatment and risk monitoring.

  1. Risk Identification: The purpose of risk identification is to reveal the what, where, when, why and how something could affect a company’s ability to operate. For example, a business located in central California might include “possibility of wildfire” as an event that could disrupt business operations.
  2. Risk Analysis: This step involves establishing the probability that a risk event might occur and the potential outcome of each event. Using the California wildfire example, safety managers might assess how much rainfall has occurred in the past 12 months and the extent of damage the company could face should a fire occur.
  3. Risk Evaluation: Risk evaluation compares the magnitude of each risk and ranks them according to prominence and consequence. For example, the effects of a possible wildfire may be weighed against the effects of a possible mudslide. Whichever event is determined to have a higher probability of happening and causing damage, would rank higher.
  4. Risk Treatment: Risk treatment is also referred to as Risk Response Planning. In this step, risk mitigation strategies, preventative care and contingency plans are created based on the assessed value of each risk. Using the wildfire example, risk managers may choose to house additional network servers offsite, so business operations could still resume if an onsite server is damaged. The risk manager may also develop evacuation plans for employees.
  5. Risk Monitoring: Risk management is a non-stop process that adapts and changes over time. Repeating and continually monitoring the processes can help assure maximum coverage of known and unknown risks.

 

The First Phase of Risk Management Is Risk Identification

Risk identification enables businesses to develop plans to minimize harmful events before they arise. The objective of this step is to identify all possible risks that could harm company operations, such as lawsuits, theft, technology breaches, business downturns or even a Category 5 hurricane.

Safety management professionals must understand that risk identification is not a one-time process. Instead, the process should be rigorous, thoughtful and ongoing.

Ways to Identify Risks

There are many ways to identify an organization’s risks, however some of the more common examples include brainstorming, thinking pessimistically and seeking employee feedback.

  1. Brainstorming: Risk managers may find that brainstorming the probability of various catastrophic events with other company stakeholders, such as managers and certain C-level staff, can help identify new threats.
  2. Thinking Pessimistically: Careers in safety management often entail planning for the worst while expecting the best. Although pessimism isn’t often encouraged in the workplace, taking time to ponder “what is the worst possible thing that could happen to the company” may be helpful in identifying risks.
  3. Seek Employee Feedback:  Upper level management’s perspective of an organization’s risks can be starkly different from the perspective that employees hold. Employees may encounter new risks in their day-to-day activities that may not have otherwise been encountered. For example, insufficient training on a piece of operating equipment may be placing staff at risk of injury. As such, employees are an invaluable source of first-hand information.

What Is the Final Step in the Risk Identification Process?

As noted earlier, the final step in the risk identification process is to monitor and review risks, because some risks will always be present. Using the natural disaster example, businesses in Florida will always be at risk of a hurricane strike, where businesses in certain parts of Kansas will always be at risk of being struck by tornadoes.

Learn More

Professionals who wish to learn more about identifying and analyzing potential workplace hazards and risks should think about completing a relevant advanced education. Discover how the online online Master of Science in Safety, Security and Emergency Management at Eastern Kentucky University can help you take your safety management career to the next level.

 

Recommended Reading:

Detecting Workers’ Comp Fraud

Smart Technology PPE Improving Worker Safety

Controlling Allergens in the Workplace

Sources:

ClearRisk, “8 Ways to Identify Risks in Your Organization”

Chron, “How to Identify Business Risk”

Chron, “Risk Management Techniques”

Chron, “Why is Risk Management Important to Project Success?”

TechTarget, “Risk Management”

The Economic Times, “Definition of Risk Management”