Every year, millions of people around the world are injured or face serious health hazards at their workplace. Are you aware that as per an ‘International Labour Organization’ ILO survey 2.3 million people globally succumb to accidents or diseases at work, which culminates into approximately 6,000 deaths everyday.
What can organizations do to avoid these accidents? Risk assessment can be a good pre-emptive measure to minimize such mishaps and make the workplace a safe and healthy place.
What is a Risk Assessment?
Risk assessment is a detailed study and evaluation of uncertainties, events, scenarios that can be of potential risk while carrying out an activity. It is an effective process that helps organizations whether big or small to proactively design policy of effectively managing day to day workplace risks.
Evaluating risk is a day-to-day thing that we all do, for the smallest of things from buying a piece of equipment for home to evaluating risk for the industry. It is beneficial for any kind of commercial establishment to perform regular assessments. A good risk assessment program must ensure the following:
- All relevant risks (immediate and long-term) have been taken into account
- Safety measures adopted are relevant to the risk involved
- All findings of the risk assessment have been properly documented
- Regular reviews as per the schedule are done
A risk assessment has three components, let us understand these with the help of an example:
A restaurant manager walks into the kitchen in the morning and sees that someone has left the freezer open and the things inside have defrosted.
Hazard identification: A hazard can be understood as anything like the device being used, any material, or process being followed. Here, the manager identifies the hazard as an open freezer. The hazard in this case is the process not being followed.
Risk: Risk is the likelihood of someone getting harmed. In this case, whoever consumes the items from the freezer will be at risk.
Risk Assessment: It is a systematic examination of all aspects of the hazard
- What can cause harm? Consumption of food kept in the freezer can cause harm.
- Impact: High risk (as many people would feel unwell eating that and the taste won’t be up to the mark).
- Control measures: To check and discard everything that is spoiled.
This example just shows that risk assessment is an everyday occurrence. One needs to constantly be aware of the same. In a work environment the risk can have a ripple effect on many people or multiple things. Hence the need to be updated about the risk.
For an organization it is important to identify and assess the risks that are relevant to their success.
It is important to know how to conduct a risk assessment in an effective way, once you have an understanding of what risk assessment means
How to conduct a risk assessment?
Risk assessment involves the following 5 steps:
Step 1: Identifying the hazards.
Step 2: Who may be harmed and how?
Step 3: Evaluate risks and develop relevant control measures.
Step 4: Duly record all the findings/information.
Step 5: Review the assessment report and make amendments if necessary.
Step 1: Identifying the hazards
There is a thin line between ‘risks’ and ‘hazards’. You need to understand the same to accurately identify hazards. Risk means the likelihood of a harm to happen. Hazard is something that has the potential to cause harm.
You can identify hazards by conducting a survey with your team about their day to day working. Another way is to walk around the floor and make notes and observations of the hazards. For example, in a cafe’s kitchen wet floors because of water leakage in the kitchen sink can be a potential hazard.
Step 2: Who may be harmed and how?
You have now identified the hazard. Now, you need to analyse who all can be affected and how. Continuing with our example of wet floors because of water leakage let's identify the people at risk of being harmed. All those working in the kitchen are at a risk of slipping and falling down. This could result in both major and minor injury depending on how the person falls down.
Step 3: Evaluate risks and develop relevant control measures
You now know the potential hazard. You also know who can be impacted and how. You are also aware of the severity of the impact. Is there a way this hazard can be minimized or avoided. In our scenario, this can be avoided by getting the leaking kitchen sink repaired or replaced to avoid any spillage and hence no wet floors.
Step 4: Duly record all the findings/information
It is always good to maintain a proper detailed record of all your findings. This helps you in future audits and also equips you with sufficient data to plan your schedule of repair and maintenance activities. You are also better equipped as a business owner to see unforeseen expenses. Timely measures and planning can help you save a lot of wasteful expenditure and maintain your expenses at an optimum level.
Step 5: Review the assessment report and make amendments if necessary
Some areas in the workplace are always bustling with activity. As a result, wear and tear is high and so is the need for regular repair and maintenance. So for the best interest of your business, have your risk assessment activity on a regular basis and make the necessary changes from time to time.
Why is risk assessment important?
Life is full of events, some good and some not so good. Many of them might be undesirable and at times not even in our control like the pandemic the world is engulfed in. We always try our best to avoid them. It is the same for the organisations. Keeping a track of unforeseen events helps organizations to prepare for the worst. This is where risk assessment comes as a winning tool for business strategy. Some of the advantages of risk assessment are:
Create awareness of hazards involved
Until the team brainstorms and works together the potential risk can be missed out. Assessing the risk makes it a habit for the team to look out for the risk.
Eliminates the uncertainty
“Risk comes from not knowing what you are doing." says Warren Buffet. It is essential to know the internal and external risk. For a hotel, a supply chain disruption is an external risk. How can they mitigate it quickly is the solution to the problem. Once they are aware of the issue the allocation of supplies can be bifurcated, or alternate sources can be identified and activated if such a need arises.
Any event that causes disruptions of services is a loss to the organisation. To mitigate and control is always a lesser cost.
Having your key resources trained on ‘Risk Assessment’ will always be favourable for you as an organization. A safe and healthy workplace is the way forward for a successful business.
Ever imagined, if there could be a tool which could simplify the exercise of doing a risk assessment? Well, the good news is that a “Risk Assessment Matrix” does just that.
What is a Risk Assessment Matrix?
Risk Assessment Matrix is an integral part of the risk management decision making process. “A Risk Matrix is a tool to conduct risk assessment. It helps to identify or define the level of risk, by taking into account the category of probability against the category of consequence of severity.” In a simple language, a risk matrix is a pictorial representation of risks impacting a project. The risks are depicted as a graph. At one end are highest level risks, at one end are the lowest level risks, and in the middle are medium risks. The matrix depicts various risk levels by color codes and increases their visibility. This is instrumental in decision making.
Given below is a specimen of a simple 3x3 matrix:
This kind of a simple matrix can be applied to assess risk in situations where a new software has to be implemented or a system upgrade has to be done. Being a fairly simple matrix, this can be used in many risk assessment scenarios and is instrumental in identifying high, medium and low risks at a broader level. All these factors can be more meticulously assessed with the help of a more detailed matrix.
A “Probability and Severity matrix” is the same as a “Risk Assessment matrix”. It helps minimize the probability of potential risks and thereby facilitates optimum performance. The basic fundamental of using a Risk Assessment Matrix is to identify what low, medium and high implies for your project.
Although there are many ready to use standard risk matrices available, most organizations would need to either customize these or make their own risk matrix depending on their individual projects and needs.
We have understood what the risk assessment matrix is? But how do we create and use a Risk Matrix in the real world? Let’s dive in.
How to conduct risk assessment using a Risk Assessment Matrix?
The starting point of any risk assessment is to define the objective and scope. The matrix can be used in a variety of situations to assess the risks involved in various processes, like in a food packaging unit, retail outlet trading in dry snacks, groceries and takeaway packaged foods like sandwiches, hotdogs etc. Salons and spas, gym, self service food outlets, bars, restaurants and cafes. Let us understand applying the matrix with the help of an example.
“The objective of using the risk assessment matrix is to identify risk involved in the day to day functioning of a commercial kitchen. The scope is to cover all aspects like receiving raw materials, storing, hygiene standards in the kitchen, cooking techniques and the overall safety of all people involved in the kitchen activities.”
Having clearly defined the objective and scope let us move on to the first step.
Step 1: Identifying Hazards
Sit with your team and brainstorm and note down all potential hazards possible in a fully functional commercial kitchen. It could be a fire accident, someone falling down due to water spillage on the floor, food in the fridge getting contaminated in case of a power failure, raw material getting expired due to over stocking etc. Stealing or pilferage of food items by staff. This list should be comprehensive. Based on the identified hazards, start building your risk matrix. A specimen is given below:
All the identified risks should be listed under the “Risk” column in the matrix.
Step 2: Calculate the probability/likelihood of the hazard to occur
For each hazard identified calculate the probability of occurrence. This can be calculated as a percentage or frequency (number of times) the hazard may happen. Probability or likelihood of an hazard should be accurately mentioned under the appropriate category as defined below:
- Unlikely: An unlikely hazard refers to a hazard that is extremely rare. For example, a power failure is a highly unlikely hazard. The chances of such an event may be say once or twice a year
- Seldom: Seldom hazards refer to hazards that may happen say once in 3 months. For example, with proper planning and estimation having food products that are expired may seldom happen in a commercial kitchen.
- Occasional: An occasional hazard refers to incidents that can happen not on a daily basis but say once in a month or so. For example, breakage of serve ware, is highly likely when the restaurant is serving at its full capacity due to shortage of time and probable mishandling of utensils
- Likely: A likely hazard refers to hazards that have a high probability of occurrence almost on a weekly basis. For example, spillage of water or food in the kitchen, highly perishable food like vegetables, fruits and meat getting contaminated if over-stocked, kitchen personnel getting minor cuts or wounds while working etc.
- Definite: There are certain hazards which will occur almost every time, no matter what. For example, leftover perishable bakery items getting contaminated, pilferage of raw materials etc.
Once you have identified the probability of occurrence of each hazard, list them in the probability/likelihood column under the correct category:
Step 3: Estimating the consequences
Once the probability has been calculated, the outcomes or consequences of those hazards can be calculated. The consequences or loss can be monetary, physical or qualitative or a mix of both. Based on the severity, consequences can be classified as:
- Insignificant: These refer to those hazards and their outcomes which poses no real threat.
- Marginal: These hazards and their outcome cause minimal damage, the monetary and physical impact is not that huge.
- Moderate: Consequences of these hazards can cause a sizable damage which cannot be ignored.
- Critical: These are hazards which must be dealt with immediately as these can lead to irreparable damage.
- Catastrophic: These are hazards that may lead to consequences that can lead to a permanent loss. For example, a faulty electrical equipment in the kitchen or a leakage in a gas pipeline is something that can lead to a major accident like fire. These need to be dealt with immediate effect
Enter all details pertaining to consequences properly categorized in the “consequence” column.
Step 4: Calculating Risk Rating
You have now categorized your hazards and also its potential consequences. Basis these findings you can now calculate the risk for each hazard and rate them in the below categories:
Rate each hazard based on your calculation as low, medium, high and extreme in the “risk rating” column. This could be quantifiable in percentage or simply categorizing under these heads.
Step 5: Creating an “Action Plan”
You have now identified the hazards, its occurrence probability, possible consequences and thereby established its risk posing severity. You may want to list out the preventive measures against each hazard under the “Action” column in the form as shown below:
Step 6: Mapping all the data into the “Risk Matrix”
Mapping all the data from the risk assessment form to the risk matrix simplifies the task of identifying and pinpointing major threats.
Let’s understand the colour coding and structure of the matrix:
Key features of the risk matrix:
- A risk matrix has two axis
- One axis measures the consequences of the hazard and the second axis measures the probability or likelihood of the occurrence of the hazard.
- Green indicates low risk, yellow indicates medium risk, orange indicates high risk and red indicates extreme risk.
To effectively use the matrix, extract data from the assessment form and map or plug it into the matrix accordingly.
Your risk matrix is now complete. You know which hazards need to be minimized and which hazards require you to come up with a plan to avoid it completely. These are mainly those identified as critical and catastrophic. Whatever corrective actions you take, remember that risk assessment is something that needs to be reviewed from time to time.
Plugging your data in the matrix simplifies the process and speeds up the decision making process. The convenience that a risk assessment matrix offers makes it an important tool in the process of risk management.