There’s no question that businesses today need a comprehensive risk management plan (RMP). Here is a guide to help you implement one for your business or organization.

For a successful RMP implementation, you’ll need a framework of tools, policies, and procedures. After all, a structured approach to risk management can make it easier to manage, provided the structure appropriately complements your operations.

In this guide, we’ll examine how to implement a comprehensive risk management plan and framework for a unified and structured approach to successful risk management. Let’s begin by organizing the required structure.

Understanding Risk Management in Business

Risk management in business is the systematic practice of identifying, assessing, and mitigating potential hazards, events, and scenarios to minimize losses and enhance organizational resilience. This approach emphasizes responsible policies and practices, prioritizing health and safety as critical objectives.

With the above definition in mind, a risk management plan is merely a plan that includes the how, where, what, and why of workplace risk and hazard incident prevention. This plan you create will add great value to the business by providing standard operating procedures that help prevent costly shutdowns due to incidents and injuries.

The Importance of a Risk Management Plan for Mobile Teams

Mobile teams face unique risks due to a lack of managerial oversight. Field personnel must be self-starters and disciplined enough to self-manage their safety in the field. However, there are ways that you can help your mobile team self-manage safety more easily for greater risk management oversight.

One successful method of managing risk in the field is implementing and using mobile applications such as 1st Reporting. This application empowers your field personnel to use custom-designed safety forms, risk assessments, and other required digital documents to help manage hazards and safety in the field more easily.

According to the Bureau of Labor, in 2022, there were an average of 1.7 incident cases per 100 workers (1.7%) that involved days away from work or job restrictions or transfers. Simultaneously, there was an average of 2.7 total recordable cases per 100 workers in private industry. (1)

Utilizing a structured and comprehensive risk management plan can help you reduce the probability of incidents or injuries at your workplace or in the field.

Critical Steps to Developing a Risk Management Plan

A risk management plan typically includes four critical steps:

Identification, analysis, prioritization, and mitigation of risk. Below, you will find a description and strategy for each.

Risk Identification

Risk management processes always begin with risk or hazard identification. It is crucial that each role provide insight into the type of risks or hazards encountered. As a backbone of your RMP, ensure that you task department management with collecting and compiling this information so your health and safety team can use the data to help build out strategies for hazard mitigation.

Actionable Steps:

1. For each role, have personnel compile a list of potential risks and hazards they face.
2. Determine regularly encountered risks and seldom encountered hazards. The key to this stage is identifying all possible risks or hazards within the scope of each role within the organization.

H&S Pro Tip: Use a mobile risk or hazard documenting tool like the 1st Reporting app to empower your personnel to document site safety inspections, risk assessments, and hazard identification forms. With the 1st Reporting app, you can customize any type of form and enable your team to complete these forms from anywhere on their mobile device.

Risk Analysis

After completing the risk identification process, we move on to analyzing the risks. It would be best to get the insights of those stakeholders who work directly with these risks or hazards so they can share insight into the likelihood of a risk turning into an incident.

Actionable Step:

Using a risk assessment form or similar tool, analyze each of the risks and classify them into categories. Determine the severity of the outcome should someone or something fall victim to the hazard, and lastly, what is the likelihood that the risk turns into an incident?

1. Type of Risk
2. Severity of Risk
3. Likelihood of Risk

“Compliance is meaningless unless it’s continually measured and made actionable.” – Gallup ⁽²⁾

Risk Prioritization

In the second step, you will have classified the types, severity, and likelihood of risks. Now, it is important to consider the likelihood and severity of risks and prioritize them in terms of their effect on personal safety, the severity of the risk should it turn into an incident, and the likelihood of the risk causing an incident.

In order to avoid unnecessary resource use, risk prioritization provides you with insights as to which risk you need to mitigate first and the subsequent order of importance for mitigating all other risks.

Actionable Step:

Prioritize all risks in terms of their negative impact and likelihood of occurrence. This prioritization should provide you with insights as to which risks are the most important to manage first and which require the least amount of attention. Try including a risk priority field in a custom form like those you can create using the 1st Reporting application. After risk assessments are completed, you can easily use the KPI reporting features in the 1st Reporting application to analyze multiple risk assessments in order to generate a prioritized list of risk prevention strategies dynamically.

Risk Mitigation

Now that you have identified, analyzed, and prioritized risks and hazards, you can start working on strategies to reduce, transfer, or avoid risks observed or identified. These strategies might include some of the following actionable steps:

1. Physical Controls: Where mechanical or machinery-related risks exist, physical barriers are often necessary. These might include guards to prevent hands from getting stuck in moving machinery, bollards installed to protect pedestrian walkways, or even handrails to help prevent slips and trips in high-risk areas.
2. Operational Controls: Operational controls include creating and adopting procedures that actively avoid risks throughout the process. This can involve standardized work practices, such as lockout/tagout procedures for equipment maintenance, regular inspection routines to catch issues early, or hazard identification processes that prevent accidental exposure to dangers. These measures ensure that tasks are performed in a controlled and safe manner, minimizing opportunities for risk exposure.
3. Administrative Controls: Administrative controls focus on policy development and training to enhance risk awareness and safe work practices. This can include conducting regular risk awareness training sessions, implementing safety checklists, and designating safety officers for risk-heavy areas. By educating and instructing employees on best practices, companies can foster and grow a culture of safety and compliance.
4. Engineering Controls: Engineering controls aim to eliminate or isolate the hazard altogether, usually through design or technological solutions. Examples include installing ventilation systems to reduce exposure to harmful fumes, automating dangerous tasks to minimize human involvement, or improving workstation ergonomics to prevent strain injuries. Such solutions often require upfront investment but yield long-term reductions in risk.
5. Personal Protective Equipment (PPE): In situations where physical and operational controls are not feasible or sufficient, PPE serves as an additional layer of protection. This equipment might include items like helmets, gloves, safety glasses, or respirators, depending on the specific risks employees face. Ensuring that PPE is provided, maintained, and regularly checked for effectiveness is crucial for safeguarding workers. Check out our PPE management guide here.
6. Emergency Preparedness and Response Plans: Risk mitigation also involves planning for incidents that can’t always be prevented. Emergency preparedness includes developing response plans, conducting regular drills, and equipping work areas with resources like fire extinguishers, first-aid kits, and evacuation maps. This strategy ensures that if an incident does occur, teams are ready to respond effectively, minimizing potential harm and disruption.

Each of these steps contributes to a safer, more resilient workplace by addressing risks at multiple levels, reducing the likelihood and impact of potential hazards. Effective risk mitigation relies on implementing a balanced combination of these strategies tailored to your specific work environment and the nature of the risks identified.

Implementing and Testing the Risk Management Plan

In the four steps to creating risk management plans we outlined above, we determined what risks or hazards exist, analyzed those risks, and determined both severity and likelihood. Now, with that information at hand, it is time to outline plans for each risk. Your plans should read like standard operating procedures (SOP). To learn more about writing SOPs, check out our guide: How to Write a Standard Operating Procedure.

Once you have outlined your risk management plan, there are three considerations I like to call the ‘Three ‘T’s’: training, tools, and testing.

Training and Awareness

All stakeholders who face a risk or hazard require appropriate training to teach them how to recognize and respond to risks. Training is probably the single most crucial aspect of building a comprehensive risk management strategy, especially if you have mobile teams like service crews who have to manage their safety when out at a remote location.

Using Technology for Risk Monitoring

I mentioned earlier how you can use technology to help you manage the risk management process. One of the essential tools is mobile applications like 1st Reporting that help your team complete customized risk assessments tailored to your work environments. The application that works on any device is intuitive and easy to learn, making adoption easier than one might expect. Furthermore, features like GPS-integrated custom form building, custom notifications, and secure cloud storage mean that you gain more than just your team’s insights and observations; you also know when and where the report was completed.

Regular Testing and Audits

In the quotation I shared with you earlier, the truth of risk management came to light: risk management procedures are only best used when data is collected, and procedures are adjusted to ensure safety and compliance. Through monitoring and testing of your risk management procedures, you can find key insights into how you can improve your risk management processes to serve health and safety initiatives better while maintaining operational costs.

Key Takeaway: Incident documentation and periodic reviews can improve risk response. Furthermore, they help empower your team by ensuring that their observations are heard and considered.

Building a Safer, More Resilient Business

In today’s fast-paced business environment, we have seen that a proactive approach to risk management is essential for building a resilient organization. By implementing a structured, comprehensive risk management plan, you not only protect your employees and assets but also position your business for sustained success. 

Each step you take, from identifying and analyzing risks to implementing mitigation strategies, reinforces a culture of safety and accountability that benefits all stakeholders.

Remember, the tools you choose to support your plan can make a world of difference. With applications like 1st Reporting, you’re not only equipping your team with the resources they need to document and assess risks efficiently; you’re also ensuring that critical insights reach management in real time. This unprecedented visibility allows for swift action, minimizing disruption and fostering a responsive, safety-first mindset throughout your organization (not to mention reducing your incident response times).

Consider revisiting and refining your risk management practices regularly. Investing in the right tools, training, and review processes can help you stay ahead of potential hazards, reduce costly incidents, and ultimately empower your team to contribute actively to a safer workplace. Embrace risk management as a living, evolving process that grows with your business, and you’ll be well on your way to a future built on resilience, risk prevention, and readiness.

Article Sources

1. “IIF Home.” 2024. Bureau of Labor Statistics. May 15, 2024. https://www.bls.gov/iif/home.htm.
2. Gallup. 2016. Gallup.com. Gallup. March 16, 2016. https://www.gallup.com/workplace/236456/managing-employee-risk-demands-data-not-guesswork.aspx.