The business owner’s guide to risk mitigation

All businesses come with a healthy level of risk. There’s no avoiding all the potential pitfalls that you may encounter as you grow your business. In fact, some risks just come with your company’s territory, or the industry or industries that your company occupies. So if not all risks can be avoided, how can business owners expect to keep their staff safe and maintain productivity and stability? The answer lies in risk management and mitigation.

From securing PI insurance to provide cover in the event of clients pursuing litigation, to following workplace health and safety guidelines in offices and warehouse spaces, risk mitigation can take on many different forms from industry to industry. This means that the risk mitigation processes you use in your business can be highly distinct from those used in another.

So how do you know which risk mitigation and management practices will be most effective for your business? We’ll be outlining all the steps involved in the development of a typical risk mitigation procedure. Read on to learn more about how you can protect your business against all of its most likely risks.

 

Step 1: Identify the risks

The first thing you’ll need to do is conduct a risk assessment in order to identify all of the potential risks or hazards that your business might be exposed to. Risk assessments can be informally conducted in-house in collaboration with your management, IT, and accounts team, or the task can be outsourced to a consulting firm that offers risk assessment services. 

If you are looking to conduct an independent risk assessment, here are some of common tasks you can expect to complete in the process:

• Assessing workplace hazard logs and incident reports
• Assess workplace equipment servicing and maintenance logs
• Review financial and safety audit reports
• Review customer feedback and complaints
• Conduct SWOT analysis
• Communicate with staff to gain further insights

As some of the items on this list can require a specialised approach, it’s in your best interests to seek support from your employees wherever you feel you may need assistance. As we mentioned, you may find that your IT, accounts team, and even legal team are likely to be a great resource for you in this preliminary phase of the risk mitigation process.

 

Step 2: Consult with stakeholders

Once you have a clear understanding of the potential risks or hazards that you’ll need to account for (i.e. physical workplace hazards, customer dissatisfaction or customer loss, cybersecurity risks, etc.), it’s time to present your findings to any relevant stakeholders. Communicating with figures like investors, consultants, other members of your management team, and any other relevant stakeholders, can help you develop a thorough plan of action to protect against both high level and low level risks.

The meeting with your stakeholders can also be a good opportunity to raise the issue of budgeting for your risk mitigation processes. Knowing how much you have to spend towards the development, implementation and maintenance of these processes can help you establish risk mitigation policies that aren’t just effective, but are sustainable as well.

As your stakeholders are likely to come from a range of different professional backgrounds and perspectives, this meeting may also reveal any potential risks or hazards that had been missed during your risk assessment process. This is why all heads of departments should be present at the meeting, as well as any other staff members who would like to contribute. Risk mitigation is a whole team effort, and as all staff will be affected by these processes, they deserve to contribute to these conversations.

 

Step 3: Develop risk management processes

Once budgets have been established, it’s finally time to develop your risk mitigation strategies in more detail. Keep in mind that all the different risks or potential hazards you’ve identified in your workplace will likely need their own unique approach. 

Whilst some risks can be removed entirely, others may have to be managed within your workplace as extricating them would impact your business operations. These managed risks can include things like production machinery, vehicles, your business’ computer network, and even any risks associated with the services you provide to your clients and customers. Maintaining a solid understanding of the approach required for mitigating each risk can help streamline your policy and process development.

This is also the time to remove any workplace hazards, or at least put measures or resources in place that alleviate the dangers of this potential hazard. Tools and infrastructure like fencing, warning and emergency signage, PPE (personal protective equipment), emergency stop push buttons, and fire protection and suppression systems can also be put in place to support risk management.

 

Step 5: Organise staff training programmes

Once your risk mitigation plans and any new safety and security measures have been put into effect, the next thing that needs to be done is informing and educating your employees on how they can utilise these measures moving forward. This can be done by conducting staff safety training programmes for existing employees, and developing workplace health and safety orientation materials to be used when onboarding any new members of staff.

Your safety training programmes should ideally be executed by a member of your HR team. If your business does not have a HR department, then department heads or floor supervisors can also run these training sessions. Training sessions should also be conducted at routine intervals, perhaps annually or semi-annually. If your workplace is fitted with industrial machinery or equipment that’s accompanied by potential high level risks, you may decide to conduct workplace training and safety sessions more frequently.

 

Step 6: Revisit risk management strategies when required

Finally, it’s important to keep in mind that your risk mitigation strategies aren’t just covering static risks but also dynamic risks. Your risks can evolve over time. In some cases, the evolution of your risks can render your established mitigation strategies ineffective. So it’s imperative that you revisit your strategies regularly or whenever you or other members of your staff feel that your risk management procedures need to be amended.

Be sure to initiate communications with your stakeholders once again when revisiting risk management strategies. Doing so can help ensure your amendments adhere to established budgets and don’t interfere with your business’ standard daily operations.

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Developing risk mitigation strategies for businesses can require a little bit of trial and error. After all, this is by no means a linear process, even with the steps we’ve outlined above. Your risk management policies are subject to amendments more often than you may think, and it’s normal to find gaps in your processes along the way.

That’s what makes securing business insurance a quintessential component of this process as well. Be sure to revisit your business insurance policy annually or whenever any changes are made to the health and safety landscape of any of your company worksites.