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Managing Risk Assessments In the Workplace

Date posted: Mar 22, 2022
Estimated read: 4 min
Author: Dan Townsend
Topics: Risk Management

Managing risk assessments in the workplace is not just about employee training and installing hazard signs. While it sounds self-explanatory, the process of performing risk assessments in the workplace requires a very clear and efficient system to be truly effective.

What is a risk assessment?

We assess risk all the time, in every element of life. From crossing the road, to making an online purchase, there is risk involved in everything we do. Risk assessment in the workplace takes that natural, constant ability to assess risk and formalizes it in a way that both mitigates risk and creates accountability for the benefit of the business and those who work within it. The purpose of the risk assessment is to focus thought-processes and real-world processes around potential hazards, outcomes and the actions necessary in each scenario.

In workplace risk assessment, there are five steps you should follow:

  1. Identify hazards.  Understand what the risks are. Do a walk-through of the business to identify hazards and review what each task entails.

  2. Decide who may be harmed and how.  Determine who could be impacted and in what way. This requires broad focus, recognizing that hazards may affect different people in different ways depending on their personal needs and circumstances.

  3. Decide on control measures.  Evaluate risk appetite and risk tolerance to judge if it can be avoided or reduced. Where risk is unavoidable, control measures must be clearly defined.

  4. Record your findings.  All risk assessment work must be recorded to ensure the full implementation of control measures. This is essential for compliance and better equips the business for ongoing risk reviews.

  5. Review the risk assessment.   The workplace is not a static environment so risk assessments must be reviewed regularly and updated. This ensures control measures are being maintained and keeps risk awareness levels high among staff.

Risk Assessments Related to Contracts

Risk in the workplace is not limited to physical harm. Considerable risk is incurred with every contract that is signed. These risk assessments should follow the same five steps but will investigate different types of hazard.

  1. Identify hazards.  With contracts and third-party relationships, identify potential issues that could cause delays such as supply chain or personnel problems. Also, investigate of the operations of third parties to ensure the company is also taking risk assessment seriously.

  2. Decide what harm may occur and how.  Determine what damage may be caused by the risk in question and how that damage may occur. For example, sensitive data could be stolen if a third party was targeted in a cyber attack. That harm can be measured in terms of potential revenue loss, additional resource allocation, and reputational damage due to fraud or the theft of intellectual property. 

  3. Decide on control measures.  Comprehensive background checks of third parties, including individuals and organizations, should investigate potential threats. Then determine the appropriate control measures. This could include changing internal cyber security measures or the seeking evidence from third parties about their own security protocols.

  4. Record findings. Risk assessment findings should be recorded for compliance purposes, both with regulatory requirements and internal policies and procedures. It is essential that all parties are aware of the risks involved with the contract, and of the control measures implemented. These control measures may be embedded in the contract language or may require work on existing systems and processes.

  5. Review the risk assessment.  During the contract life cycle, the agreement is a living document, and levels of risk fluctuate according to changing circumstances. Risk assessments must continue throughout the contract lifecycle so changes can be made in a timely manner to adjust to the changing circumstances, such as a change in leadership or unprecedented global economic uncertainty.

Managing Risk Assessments

Digitalizing the risk assessment process with cutting-edge software systems can mitigate risk by taking out the potential for human error and automating processes. Extensive risk management tools are available within a single digital solution where findings are recorded and reported on a granular level. These platforms, such as Scanmarket, are designed to encompass the entire contract lifecycle and addresses the management of risk assessment as part of that process.

  • Intelligent Questionnaires – Risk can be identified using intelligent questionnaires built into the cloud-based software using permission-based access. This allows authorized personnel to access the tools from any location delivering agility and scalability in a secure environment.

  • Background Checks – Contract management software can be linked to external databases such as Refinitiv, LexisNexis, Dow Jones and Dun & Bradstreet. These databases are integrated into the software and evaluate data on a granular level with advanced security profiles.

  • Identity Management – Contract management software includes the necessary identity management features to detect and prevent fraud, effectively supporting risk assessments by performing continuous due diligence through all stages of the contract lifecycle.

  • Customized Reporting – Contract management software transforms data into actionable information using powerful reporting tools that inform decision making and tracking audit trails required for compliance purposes. 

 

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About the author

Dan Townsend

Dan has been a leading executive across all areas of Contract and Compliance Management applications since 2001 in both Sales and Implementation. Dan has over 30 years management experience in a wide range of business applications such as ERP Implementations, Business Process Reengineering, and Operations Management.

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