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Published 14/06/2024

RISK MATRIX WHAT IS A RISK MATRIX, WHY IS IT IMPORTANT AND WHAT TO INCLUDE

Risks in the workplace are daily events that employees face. Some risks are minor, while others are major, causing employees to suffer accidents and injuries. It is crucial to assess risks to know the level of risks in an organization. The risks are assessed using the Risk Matrix.

It is a matrix used in risk assessment to figure out the level of risks in a workplace by considering the likelihood of a risk happening against the severity of the consequences. The matrix is based on the likelihood of the risk to occur and the potential impact that the risk event will have on the employees and the organization. A type of matrix might include an example such as a risk response matrix.

Components of a Risk Matrix

- Severity
The amount of damage a hazard can cause to the employee or organization is called severity. Risks are never the same, and each will have a varying impact. The risk matrix ranks risks using a 4-point scale. The scale ranges from negligible, marginal, critical, and catastrophe. In negligible, the magnitude of risks causes no, or less or minor injuries, illness, and damage.

The magnitude of the risk can be controlled to avoid severe injuries, illness, or significant damage. In critical, the magnitude of the risk can cause severe injuries, illness, and damage and requires immediate action. In a catastrophe, the magnitude of the risk may cause death or significant system damage, and the task should be stopped with immediate effect.

- Probability

The likelihood of a risk happening is probability and is determined using a 5-point scale. The scale ranges from improbable, remote, occasional, probable, and frequent. Risks that lie under improbable are not likely to happen, and they can be assumed while remote level risks are possible to occur once in a lifetime. Occasional level risks occur sometime while probable occur several times. Frequent risks occur often and are known to everyone in the organization.

- Risk assessment

The risk matrix utilizes risk assessment by multiplying the values for the probability and severity. After multiplying, the outcome can be high, serious, medium, or low. When the risk assessment is high, the overall magnitude of the risk is more significant and vice versa. Risk assessment balances the weight of severity and probability to get a measurable value. After evaluating the value of the risk, it becomes easy to prioritize the risks.

Importance of Risk Matrix

1. It is easy to prioritize risks.
Employees face risks at different levels which demand different attention. A risk matrix allows the employer to prioritize the most severe risks the employees and organizations face. Some risks may be assumed to be minor, but they become major when placed in the risk matrix.

For example, an employee who misses steps in the staircase versus inappropriate handling of data leading to potential data manipulation may be confused about which risk to prioritize. When assessed using a risk matrix, data loss is prioritized because it has no reverse way once it is lost.

2. Strategy for managing risks
First pressing risk first is a way of prioritizing risks. All risks don't carry the same magnitude, and risk assessment is crucial to rank the risks according to the urgency. It becomes easy to manage the risks with a risk matrix because it poses a greater impact and has more significant value losses.

3. Real-time view of evolving risks
The risk management team can track reoccurring risks and place them on the matrix to determine the magnitude. A real-time view of risk involves examining early signs of potential risks that may hinder business operations. Using the risk matrix, management can track risk patterns and reoccurring risks.

The risk matrix helps in time and resource management as the matrix computes the rank of risks within a short period. Due to the ever-changing working environment, risk assessment and hazard identification should be a continuous process in every organization. After identification of the risks, they should be clearly defined for mitigation. Managing risks well helps reduce workplace injuries, illness, and accidents hence healthy working.

What is a Risk Assessment Matrix?

A risk assessment matrix can also be referred to as an impact of probability matrix - which is an effective and essential tool that assists in the evaluation of risks by concentrating on the identification of potential risks. A risk assessment matrix can help you determine risks associated with current projects and standard business practices in a timely manner.

It also identifies actions and situations that could go wrong and weighing up possible damage. This helps your business easily prioritize issues and problems. When it comes to managing risks, your business will need to implement a system to manage current and potential risk events from happening.

What to include?

There are some major steps that your business will need to implement to achieve a successful risk assessment matrix. These are:

1. Risk Identification - the identification of a risk associated with a project is the first phase in risk control. Scoping out a project or a task indicates a proactive approach to limit risks and damages.

2. Risk Analysis - once the risk has been identified, you will need to analyse the potential damage or risk and create a strategy on how to reduce the impact.

3. Assessment of Impact - after the risk has been analysed, you'll will need to identify if the impact is critical for the project or task. This will help minimise the risk and give your workers a clear direction.

4. Prioritisation - the risk assessment matrix will show you how each risk is prioritised at different levels. This assessment is an ongoing process and needs to be updated when your business creates modifications or updates its business practices.

Benefits of a Risk Assessment Matrix

There are a lot of benefits of implementing a risk assessment matrix. Here are a few that will highly benefit and contribute to a productive and safe WHS environment:

- Provides a clear and visual portrayal of risks associated across a project

- Breaks down and clarifies the risk management within your business

- Opportunities to identify areas to reduce the risks

- Provides a timely and affordable risk analysis

- Allows for a detailed description and analysis for high-risk areas

View Risk Matrix Templates, Forms and Examples