The Four Types of Risk Management Strategies

Risk Management Strategies are planned approaches to help companies identify, assess and manage the risks within their organisation. Implementing Risk Management Strategies within your health and safety system helps to identify the risks and hazards that can harm personnel or may cause damage. Strategies can act as a guide to help management set priorities and resources to ensure the necessary safety measures are in place to remove or lower the risk.

In this post, I’ll walk you through some of the key risk management strategies, tactics and tools you can use to streamline risk management and minimisation across your business.

Benefits of Risk Management Strategies

Implementing risk management strategies within the workplace can benefit your organisation in many ways, including:

  • Minimising or removing the risks and hazards that can lead to work-related injuries or incidents.
  • Reducing work-related injury and incidents costs.
  • Lower the effect of incidents, this could save workers from severe injuries or death.
  • Minimise downtime as a result of employee absence.
  • Less downtime spent creating reports or investigating incidents that happen in the workplace.
  • Ensures managers and employees are better informed of the risks present in the workplace.
  • Helps an organisation reach their targets more effectively and efficiently.
  • Boosts companies reputation for safety and employee-care.
  • Attracts workers and reduces turnover rates.
  • Ensures compliance with health and safety laws and legislations.
  • Minimises or eliminates fines for health and safety non-compliance.

The Four Types of Risk Management Strategies

There are four major strategies that can be applied when your organisation reviews health and safety risks within the workplace.

Risk Acceptance

Risk acceptance is used for infrequent or small risks that are worth accepting and do not impose a threat to employee safety or well-being. Any actions or activities associated with these risks are allowed to continue.

Risk acceptance can be applied to minor risks that do not have the potential to be catastrophic for the safety of employees or do not have the potential to be expensive upon the employer in terms of health costs, downtime, or asset damage.

Risk Transference

Risk transference is when an organisation passes the risk to a third party that is more suited to handle the risk, and will take responsibility for the actions.

Risk transference can be applied to risks that require special skills or equipment to manage or mitigate, which the organisation does not specialise in, have the resources for or is too expensive to invest in.

Risk Avoidance

Risk avoidance is the elimination of certain actions that cause the risk, to avoid it completely.

Risk avoidance should be applied to risks that have the potential to be catastrophic for the safety of employees, may have the potential to be expensive for the employer in terms of health costs, downtime or if the preventive actions are too costly for the employer.

Risk Reduction

Risk reduction, also known as lowering or mitigating risks, is the process of taking actions that minimises the severity or impact that the risk can have upon your employees and company.

Risk reduction can be applied to risks that can be reduced through the use of safety equipment or a change of behaviour.

Implementing a Successful Risk Management Strategy

The success of a risk management strategy relies on continuous improvement and follow up actions.

Strategies such as accepting, transferring, or avoiding the identified risks require minimal effort from managers or employees. Risk reduction, however, requires constant monitoring and attention. Comply Flow, provides an online tool to help managers and employees effectively and productively stay on top of risk management and control.

Comply Flow allows complete visibility of all risks, incidents and near misses with a live register. This allows management to ensure that corrective actions and safety measures are implemented as soon as possible.

There is also a suite of modules for managing risk at the supply chain, worker and plant/equipment level. Each entity receives a compliant or not-compliant status to ensure supply chain risks and visible and therefore actionable.

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