How to Develop Your Own Risk Assessment

How well is your business protected when a global pandemic strikes?

If someone would’ve asked you that question a year ago, you might have laughed it off as far-fetched.

Today, not so much.

Figuring out how big of a risk something could be to your business and, if it happens, how significant the impact will be is probably more relevant than ever.

Risk assessment can help you streamline analyzing each potential risk a business could face. Risks such as:

  • Your employees’ health and safety in a production environment 
  • Food safety in the food industry
  • IT safety risks when working with sensitive data or software
  • Protecting your customers’ personal details
  • Intellectual theft
  • Fire safety management procedures
  • Potential lawsuits
  • A global pandemic

You can use a risk assessment in almost every business type, but what is a risk assessment exactly?

What is a Risk Assessment?

A risk assessment is just one part of the risk assessment process where you:

  • Identify potential risk factors, either physical, digital, and anything in between.
  • Analyze and evaluate the risk associated with those potential threats
  • Determine how to eliminate or control the risk

The risk assessment process aims to evaluate risks and then remove or minimize their risk level by adding control measures or taking precautions. 

If done successfully, you have created a safer and more secure workplace for all stakeholders.

Risk Assessment Process

The goal is to try to answer the following questions:

  1. What can happen, and under what circumstances? (Risk identification)
  2. What are the possible consequences? (Risk analysis)
  3. How likely are the potential consequences to occur? (Risk evaluation)
  4. Is the risk under control, or is further action required? (Risk Control)

In this article, we’ll focus on analyzing and evaluating the risk associated with those potential threats.

To find all your potential risks, you have to consider what would happen if everything that could go wrong goes wrong.

But what if you’ve done that. What if you found all potential threats to your business and would like to know the likelihood and the impact of the risk happening?

Let’s build your risk assessment and find out.

How to Create a Risk Assessment

Determine Who May Be at Risk

Firstly, you determine who is at risk. While this may seem simple, it’s essential to dig deeper than those who may be immediately at risk.

For instance, the obvious victims of a cybersecurity attack would be the business itself. However, customers and suppliers could also be affected and have their sensitive data stolen. 

When conducting a workplace inspection to identify safety hazards, you might think about the employees who could be injured. But if a potential client were touring your facilities, they would also be at risk. 

Identify anyone who could be in danger of an illness, injury, or loss.

How To Evaluate Your Risks

You already have your first two questions: what is the hazard? And who is at risk? 

Now it’s time to evaluate each risk. Determine the best course of action to prevent the risk, or -if that’s not possible- control it.

To do that, you need to ask the right questions.

Risk Assessment Questions

Here are a few questions you could ask: 

  • How big of a threat does this risk pose at this time? 
  • Could the risk become a more significant threat at a later date?
  • Are there any measures in place to control this risk?
  • Who’s responsibility is to prevent or control this risk?

Apart from these generic questions, there are risk assessment questions specific to every business or department.

HR Risk Assessments

Human resources risk assessments seek to handle various potential issues that may arise with a company’s employees. 

HR Risk Assessments are also a prime example to look at risks from different perspectives. HR Risk assessment could be related to employees attempting to abuse benefits or preventing theft of company items. 

More often, however, it’s about retaining quality employees, creating a happy, healthy work environment, and improving the hiring process.

HR Risk Assessment example questions:

  • Have there been changes in external factors such as laws and regulations?
  • Have the terms of contracts changed? Are there employee contracts up for renewal?
  • Have there been changes in key personnel during the past year?
  • Has there been high staff turnover?
  • How well is the staff trained?
  • Have there been changes in information systems in the past year? 
  • Are procedures and processes documented, i.e., procedure manuals?

HR Risk Assessment

IT Risk Assessments

Cyberattacks have been grabbing headlines the past few years, with damages expected to reach $6 trillion in the U.S. in 2021. 

Cyberattacks also have a domino effect. Besides any initial losses regarding hardware, systems, laptops, customer data, or intellectual property, companies also face bad press, loss of customer trust and loyalty.

IT risk assessments seek to identify potential weak points in a company’s cybersecurity and predict the potential losses. 

Possible IT risk assessment questions are: 

  • What makes our business an appealing target for hackers and cybercriminals?
  • What is the worst-case scenario; what are our principal assets and “crown jewels” that could be compromised?
  • What will be the impact if we are targeted, and the breach is made public? Or data is held for ransom?
  • Is there a valid business reason for retaining existing information and the collection of new data?
  • What are our data minimization and destruction policies and procedures?
  • Is our insurance against cyberattacks adequate? 
  • Are we prepared for regulatory enforcement and lawsuits?
  • How current, complete, and tested in our data breach incident plan?
  • Are we using industry best practices against cyberattacks?
  • Are there enough training resources available for our employees to spread awareness about data security and risks?

IT Risk Assessment

Work Safety Risk Assessments

Workplace health and safety is both the moral and legal responsibility of most employers. Whether you are working in an office or in a factory, any workplace has its hazards. Employers need to assess and effectively address each issue thoroughly.

Aks the following questions:

  • Would employees be subject to vibrations or noise?
  • Are there any temperature extremes that could affect personnel, equipment, or materials?
  • Are employees working at times of day that could affect vision?
  • Can injury or strain arise from the design and organization of an employee’s workspace?
  • Are there any blind spots or poorly lit areas in the workspace?
  • Are employees at risk from threats or violent attacks from the public?
  • Are employees at risk of bullying or aggression from other employees within the company?
  • Are tasks evenly distributed to prevent work overload?

Workplace Safety Risk Assessment

How to prioritize risks

Now that you’ve analyzed and evaluated your company’s risks, it’s to prioritize these risks.

There are two key factors: probability – the odds of the risk happening- and impact – the effect of the risk.

With these parameters, you can build your risk matrix:

Risk Matrix

Consider these two parameters for each risk. Risks that score high in both categories will be the ones you should tackle first.

Whether a risk is categorized as low, moderate, high, or extreme shouldn’t be left up to chance, though.

By adding a score or value to each answer option in your assessment, you can have the risk assessment calculate each risk for you and show you an outcome or final screen containing the most urgent risks or, alternatively, define the appropriate category for each potential risk. You’ll need risk assessment software that has a feature that allows multiple outcomes. Luckily, Survey Anyplace has such a feature.

Assessing risks is only half the battle. With ReportR, you can build a risk assessment that automatically generates a detailed risk report, containing tailored advice on how to mitigate the risks. This is often used by consultants and professional service companies to make their audience aware of the importance of a specific set of risks. An IT security consultancy for example can use a cyber risk assessment for its prospects to identify security vulnerabilities and advise how to address these.

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