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Risk Management


What is Risk Management?

A worker conducting a risk assessment of machinery

Risk management is an extremely broad term, which is not confined to the subject of health and safety training, and is concerned with the identification and prevention of potential risks and hazards.

In the context of health and safety, risk management involves identifying potential risks and hazards, in order to avoid the negative consequences that could come if the potential outcome of the risk became a reality. Whilst avoidance is preferable, a good risk management plan will also determine the appropriate steps to take should the worst happen, in order to minimise the fallout and impact. A risk management plan will therefore go hand in hand with a risk assessment.

Prioritisation is a key aspect of risk management. Because of the enormous number of potential risks that could befall an organisation, sorting the risks is a necessity, as it is impossible to allocate enough resources to cover all potential risks equally. They can be sorted in a number of different ways, such as:

  • By Probability: This is simply a case of identifying and sorting potential risks by the probably of it occurring.
  • By Severity: Perhaps the most popular way of sorting risks, prioritising by potential impact allows you to focus on the problems which would cause the most damage if they occurred. Whilst they may be less likely to happen, their impact would be far greater, so it is arguable that a greater amount of planning and prevention should be undertaken for these risks.
  • By Time to Remedy: Different problems will take different amounts of time to remedy, impacting the operations of an organisation to function at full capacity. Lost time is lost revenue, particularly in manufacturing companies, so long periods of downtime need to be avoided.



Risk Severity and Priorities in Health and Safety

Those who have received health and safety training will know not only about identifying the multitude and wide variety of risks, hazards and dangers to health that are present in places of work, but they will also have an understanding of the ways in which different hazards have different levels of severity and urgency in terms of rectifying and remedying the situation to prevent an accident from taking place.

It is obviously necessary to attach priority to those which pose the most significant risks to a person's health or the environment, as these risks are likely to have the potential to cause serious injuries, illness or even death to workers or those in the nearby vicinity. However, management are legally required (in the majority of countries anyway!) to do as much as is reasonably practical to eliminate risks and provide a safe place of work for their employees, as well as preventing accidents which could jeopardise the safety of members of the public which can be affected by the actions and operations of the business.

This may mean that the company needs to temporarily suspend and shut down either a part or all of its operations whilst various risks are dealt with before workers are allowed to come back and resume their duties.

Although there will be some hazards that can be remedied without the need to suspend activities, dangers which are being tackled but still exist are still a risk to a person's health and wellbeing. As far as danger is concerned, whether the hazard is currently being worked on or not, if it still could cause harm it is still a risk for workers!



Should Risks Be Given Priority In Order Of Severity?

Whilst the most potentially-harmful risks and hazards should be given priority, it may be the case that a fairly low risk can be made safe quickly and easily. If this is the case, the company should not wait until they have finished with the severe risks as if they were taking them all in a rigid order, but should attempt to eliminate and make safe as many potential hazards as possible in as short a time frame as possible.




Risk versus Safety

A constant battle which has raged for many a year and shows no sign of slowing down is that of risk versus safety. With supporters on both sides who will fiercely defend their belief and vehemently decry the other, it means health and safety has become an extremely divisive subject.



How Much Risk Should Be Tolerated?

One of the central issues revolves around the level of risk that should be tolerated and allowed to exist. For some, any risk no matter how slight should be eliminated if it is within a person's power to do so. This typically involves cancelling events and banning certain activities taking place. At the other end of the spectrum, there are those who believe that life is by its very nature a risky enterprise and that things should just be enjoyed and hope nobody gets hurt.



A Happy Medium For Risk?

Somewhere in the middle of these polar opposites, at varying degrees between them, lie the majority of people who take a more balanced view. Their belief is that whilst they accept that some degree of risk is associated with everything in life, there should also be suitable precautions taken to minimise the danger. The key word here is suitable. Rather than a blanket ban on anything and everything, each situation should be carefully considered and the potential dangers contemplated in a risk assessment, which will then be used as a basis upon which to introduce various safety measures which minimise the danger to health. This can include a number of different things including health and safety training courses, automatic safeguards, emergency evacuation plans etc.

Attempting to eliminate all and every risk is an impossible task. Those trying will never succeed. They may think that the world is such a dangerous place outside that sitting quietly indoors is the only safe thing to do. But what happens if the ceiling beams are rotten and it collapses? Or a meteor lands on the house? Or they fall asleep and a spark from a plug socket causes a catastrophic fire? However low the probability, nothing can ever be ruled out, and so it must be accepted that danger exists all around and can only be reduced down to acceptable levels rather than totally removed.

Of course, these "acceptable levels" is the contentious point which will vary from person to person. When trying to weigh it up, the calculation will often involve the probability/likelihood, and the potential damage that could be done - e.g. would it result in certain death or just bring about an illness which, even though unpleasant, can be easily cured?



An Example - The Risk Of Flying

In regards to the probability, take the following example. There is no denying the fact that quite a few people have been killed over the previous decade in aircraft disasters, so there is obviously a certain level of risk involved with getting on a plane and flying. Despite best efforts, it is highly likely that others will also die in aircraft-related incidents in the future. Some people would therefore argue that as there is a risk of death, all flying should be banned, as even if one death can be prevented then surely it is worth saving that life?

Therefore banning all flying would save lives. However, the reason it is not done is because there are literally thousands of flights each day which pass without incident, so much so that flying is actually considered the safest mode of transport statistically. The likelihood of people being killed or injured is so low that it does not justify a total ban on flying and the negative effect that not being able to travel to any location by plane would have on the world's population (they could go by boat, but boats can sink!).

Talking about human lives as part of a risk/reward scenario sounds rather callous and uncaring, but the truth is that a decision not to ban flying is made on this basis, as authorities weigh up the lives that would be saved versus the detrimental effects which would be felt by the entire world were no passengers or cargo allowed to fly anywhere.

Rather then blanket banning flying, authorities enforce strict conditions and requirements from aircraft owners and operators to ensure that they do everything they possibly can to make their aircraft safe and get their passengers to and from their destination without harm. These include aspects such as thorough and regular maintenance, training for pilots and ground crew, limitations on working hours, limitations on operating conditions such as wind speed or visibility etc.

As alluded to earlier, if flying were to be banned, people would have to go by boats which can sink, or trains which can derail, or cars which can crash. This is a prime example of risk never being able to be eliminated; even if one form of risk was somehow closed off it would still just lead to an increase in an alternative, which in this example would be even more statistically-risky forms of transportation than flying.




Composite Risk Index

A simple formula to quickly prioritise risks, known as the composite risk index, is:


Impact of risk event  x  probability of the risk occurring


A scale of numbers is used (e.g. 1-5 or 1-10) with 1 being extremely low and a final value being obtained. These values for different risks can then be compared and put in order.

Whilst this is a simple formula, the values used are highly subjective and extremely difficult to predict/forecast accurately. Past occurrences are also not necessarily a reliable source of predicting future occurrences, particularly if new control measures or working practices have been introduced since the last time it happened.



Risk Sharing

One way of lessening the impact of risks is to share the burden and potential consequences. The most popular way is through insurance, where the costs of disaster are covered should the worst happen. Another way is through outsourcing to external companies. Diversifying into other products and markets also shares and lessens risk, as the company is not dependent on just one single market.



Review Risk Management Plans Regularly

Businesses are constantly evolving and changing, and so are the risks that they face. A risk management plan that may have been suitable a couple of years ago may not be suitable now. This is due to many factors, such as changing economic conditions, new working practices, new equipment, a change of personnel etc. It is therefore imperative that risk management assessments, plans and procedures are constantly reviewed and refined at regular intervals. The more up to date and relevant they are, the more useful they will be.

Using a combination of existing management and external health and safety consultants is often the best way to put together a risk management plan. Existing managers and employees will have the intimate knowledge of their organisation needed to make the plan as specific and tailored as necessary, whereas an external health and safety consultant will have the experience and also be able to see things which the management have failed to see by being so close to the business. Sometimes it may be the case that management gloss over particular aspects, whether deliberately or subconsciously, such as having to admit that a piece of equipment that cost a substantial amount of money, or a controversial new working practice, is actually detrimental and causing more risk, and needs to be changed or even scrapped completely. This is where an impartial external influence will be useful.



Conclusion

All the identification, planning and prevention in the world cannot prevent all risks. Unexpected events are a fact of life and part of the world in which we live. The ultimate aim of risk management is to lessen both the probability of the risk occurring, along with its impact and the potential damage it can cause should the event happen. Whilst not being able to predict and prevent everything, effective risk management will give an organisation and its employees a greater chance of both surviving and prospering in whatever it does.



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