10 Reasons Why Risk Management is Important

Risks are a daily occurrence in most businesses, so a system must be put in place to effectively control them. Risks inherently turn into incidents if not dealt with properly – not only harming employees, but also resulting in productivity loss, increased admin burden and unfortunate legal disputes.

When it comes to health and safety, risks can arise from a variety of sources at your workplace. These include chemicals and substances, electrical sources, equipment and machinery and even contagious illnesses.

Proactively managing risks and identifying sources can help ensure a business accurately works through a fall, fire or spillage. To be successful, investing in health and safety risk management software can help ensure safe operations are prioritized.

What is Risk Management?

Health and safety risk management is the process of identifying, assessing and controlling threats to health and safety. It's a formal process that evaluates risks and lays out plans to eliminate or control them. Risk management is essential for any organization that proactively looks to prioritize safe operations and the well-being of their employees.

Importance of Risk Management in the Workplace

Risk within the workplace has the potential to cause any number of unexpected outcomes. Unresolved risks can lead to unfavorable occurrences - from injuries and permanent workspace damage to legal liabilities, to name a few.

Your organization is responsible not only for complying with regulations, but for proactively protecting your organization and its people. By determining hazards and risks, assessing them for severity and then controlling them appropriately, your organization will experience an improved level of safety.

10 Reasons Why Risk Management is Important:

Health and safety risk management is invaluable to your organization in a multitude of ways. Here are a few benefits:

Reason 1: Crucial for Planning

Believe it or not, risk management strategy plays an important role in planning for the future. Through an increased awareness of hazards, and therefore possible risks, your department can create a strategy that effectively controls hazards and risks moving forward.

Reason 2: Informed Decision-Making

Risk management in health and safety is a great tool for forward-thinking. Not only can you plan better with a more informed understanding of risk, but you can also make quicker decisions across business operations due to available data. With more information, decisions can be made with more confidence.

Reason 3: Safer Work Environment

Greater visibility and awareness of risks within the workplace allows your employees and EHS department to proceed with appropriate training that will ensure safety.

Reason 4: Demonstrates Leadership

Risk management allows the implementation of a proactive risk management strategy. Such a strategy helps demonstrate to employees that leadership is serious about protecting both their physical and mental health. This will in turn help strengthen employee loyalty, retention and motivation.

Reason 5: Improved Employee Engagement and Productivity

Employees feel encouraged by their employer’s dedication to providing and maintaining a safe working environment. This can translate to increased engagement and productivity. Your employees will be less likely to leave if they feel the organization is attentive to their needs and well-being.

Reason 6: Improved Communication

When risk management is carried out correctly, the organization should have a good understanding of how the business is working together when it comes to health and safety. Forming a strategy can help you find gaps in your communication, which can then be strengthened. Strategies should prioritize visibility, which will stimulate communication.

Reason 7: Financial Savings

Incidents incur both direct and indirect costs. Direct costs consist of lost wages and medical treatment, while indirect costs include lost working hours, damage to property and diminished employee morale. These are only some of the costs of workplace accidents. Mitigating hazards can help prevent accidents from occurring, saving your organization the hefty financial and administrative burden of incidents. Not to mention you can help keep your staff in one piece!

Reason 8: Ensures Compliance with Regulations

Complying with the appropriate regulations is now non-negotiable, and a breach in compliance could lead to serious legal repercussions. The identification of hazards in health and safety risk management helps your organization stay aware of any potential risks. A risk management strategy will follow regulations closely and leave no stone unturned when it comes to making sure your organization is working legally and safely.

Reason 9: Reduced Uncertainty

While of course it is impossible to prepare for every possible scenario and every issue, a health and safety risk management strategy can help you establish a system for dealing with both foreseeable and unexpected challenges that may arise. Having an organized and well-established system in place when it comes to risk will help minimize uncertainty throughout your organization.

Reason 10: Prevents Reputational Damage

If a risk spirals into a serious incident, the blow to brand reputation may be extremely detrimental. A damaged reputation can be difficult and expensive to fix. Even one event, as a result of an overlooked hazard or risk, can cause serious, irreversible damage to your company. Thanks to social media, criticisms aimed at the company can be much easier to spread and this can exacerbate reputational damage. Risk management can help stop such events in their tracks.

What are my next steps?

As you can see, health and safety risk management is filled with positive benefits for your people, your workplace and your business.

For best results when introducing and implementing a risk management system, consider a health and safety software solution that includes risk management. Leading Health and Safety Risk Assessment & Management Software allows you to do the following:

• Embed safety into everything you do

• Identify risks and assess all areas of business

• Coach your people through microlearning

• Report risks with simple, mobile tools

• Use matrices to assess high-risk activities

• Track all actions to completion once control measures are implemented

• Make communication easier than before

• Access all documents easily

If you’re passionate about making sure your employees work in a safe environment and go home happy and safe at the end of each day, don’t put off implementing a health and safety risk management system any longer. Each day without a health and safety risk management system in place is a day your organization remains vulnerable to unexpected hazards and risks.

Want an overview of our risk management software? Check out our EHS Hazard and Risk Management page.