Risk Management Plan, A to Z

In organisations, all projects no matter what type of project, are bound to have potential risks. That is why risk assessment and a risk management plan are essential.  In this, you identify risks, record them, and then create solutions accordingly. For instance, while working on a project involving mining of underground precious minerals such as coal or iron, you should be prepared with risk assessment to avoid any potential catastrophes which may endanger yours and your fellow workers' lives!

A risk management plan determines the best course of action to reduce risks and optimize the cost-benefit relationship. It helps in predicting potential project issues and ensuring your people are safe.

What is a risk management plan?

The risk management plan is a document containing all details regarding various types of risks that an organization undergoes, including cyber, operational, geopolitical, financial, environmental, and more.

The risk management plan also contains a cost-benefit analysis of those risks. Moreover, every organization is responsible for adhering to health and safety regulations and standards to ensure lone workers and other employees are safe. For example, if you are a company that employs lone workers, you need an appropriate plan as these individuals are more prone to risks.

You might also need a risk management plan to mitigate fatigue when employees work alone on projects or travel. 

Levels of risks

To create a successful risk management plan, you need to understand the three main levels of risks based on knowability. Having an in-depth knowledge of these can help you create a robust risk management plan:

• Unknown risks – This is a risk that is unknown to most people in the organization and can be difficult to control. Only project experts and specialists will be able to discern these risks, so they need to spend more time analyzing and keeping an eye out for such issues.
• Unknowable risks – These are emergencies that you cannot foresee. You may not list these risks, but you need to account for them in your analysis to ensure your cost-benefit analysis is to the mark. These include system failures, market crashes, equipment dysfunction, and more.
• Known risks – These risks are known and voiced out by your employees, lone workers, and experts. You need to list these down and plan a step-by-step action to mitigate them.

How to create a risk management plan?

Creating a risk management plan can be easy. You simply need to consider the below:

Risk identification

Risk identification is identifying the risks lone workers and employees could face. You’ll need to use past data, brainstorming sessions, interviews, expert opinions, and risk checklists to identify project risks and health and safety risks. Identifying risks is part assumption and part logic. You will need to look into various angles to understand the different problems that could occur.

Risk Assessment

Once you have identified the risk, you must conduct a risk assessment. This will help you understand the following:

• The likelihood of the risk occurring
• The impact of the risk

A risk assessment will succeed if you clearly outline organizational goals and objectives. You will understand how the organizational goal and your workers can be affected.

Risk analysis

Next, you need to analyse each risk and determine its potential to harm your workers or the organisation. The risk prioritisation matrix allows you to quickly analyse the correlation between likelihood and impact of risk.

Risk treatment and mitigation

Once you know the detailed analysis, you can strategize. This is essentially your response to risks. It involves developing several options to reduce impact and increase positive outcomes. At this point, you should also consider actions to mitigate risks and have contingency plans.

For instance, if a lone worker faces a risk of being injured by equipment, you need to educate them on how to avoid injuries and provide proper training to use the equipment.

Takeaway

According to HSA, people who control workplaces must identify risks and hazards to health and safety and create a safety statement to safeguard employees and lone workers. Apart from this, workplace controllers also need to account for project milestone-related risks.

Identifying risks, assessing, analysing, treating, mitigating, and writing a risk management plan is crucial for safeguarding employees, lone workers, and the organisation. Moreover, with SafetyIQ, you can use the risk assessment guide and other safety software solutions to mitigate risks. The technology by SafetyIQ will help organisations create a robust risk management plan. So, get in touch now.