Dyman Associates Risk Management: The Basics of WHS Risk Management

Prior to the modernisation of industry, managers were understandably primarily concerned with performance and cost.

Workplace safety (WHS) unfortunately was often only considered when it affected any goals associated with performance and cost. With the passage of time and gradually increasing awareness of worker rights, employee health, safety and well-being has of course also gained additional attention.

There are various reasons for managing WHS risk. Typically they are summarised into one of four main groups:

- Ethical and moral: accident prevention is undertaken to prevent injury to personnel purely as the result of humane considerations.

- Legal: legislation places a number of duties on various persons and failure to carry out these duties can result in fines and, in extreme cases, imprisonment.

- Financial: the costs of an injury are made up by two parts the direct cost (cost associated with medical treatment, and damage) and the indirect cost (time spent on investigations, lost production retraining).

- General business considerations: these could be considered as financial, but given the difficulty in quantifying them, they are best kept separate. They generally relate to the organisation’s corporate image and reputation. Poor health and safety systems and outcomes affect many stake holders including employees, customers, insurance companies, as well as investors and financiers.

WHS risk management is concerned with providing a structured systematic approach to decision making with respect to WHS issues. The strength of applying a systematic risk management approach to WHS issues is that it combines technical, consultative and managerial approaches into processes that support informed, consistent and defensible decision-making.

The WHS Risk Management Process can be introduced at any time, but good practice dictates the process should be commenced at the earliest possible time. Whether designing a piece of plant or a whole facility, the risk management process of hazard identification, risk assessment, control, and review should be incorporated at the design / planning stage.

WHS Risk Management includes the process concerned with identifying, analysing and responding to WHS risk. The primary objective is to eliminate or minimise the consequences of adverse effects (injury, illness or property damage) on employees or the workplace. This consists of the following major steps also known as the Risk Management Process Model:

- Establish the context: establish the strategic, organisational and risk management context in which the rest of the process will follow.

- Identify risks: identify what, why and how thinks can arise that will be the basis for further analysis.

- Assess risks: determine the existing controls and analyses in terms of consequences and likelihood in the context of those controls. Typically, the analysis should take into account a number of potential consequences and how likely those consequences are to occur.

- Evaluate risks: compare the levels of risk against a pre-established criteria. This allows risks to be ranked so to identify management priorities.

- Treat risk: allow for the development of specific management plans to control the risk by way of elimination or minimisation strategies.

- Monitoring and review.

- Communication and Consultation.

By implementing systematic WHS Risk Management activities, organisations are able to better understand operations and their associated hazards as well as afford greater flexibility with regard to the methods used to control risks and the costs of implementing those controls.

With the increased ability to respond effectively to organisational changes, both internal and external to the organisation, WHS risk management may lead to a myriad of direct benefits including:

- Reducing injury and illness to employees and the community

- Saving money and adding value by more effective allocation of resources

- Improving the quality of information available for making decisions

- Improving the understanding of WHS risks throughout the organization

- Complying with WHS legislation and the ability to better to demonstrate this

- Improving the organization’s image and reputation

- Improving accountability and transparency of decision-making

Possible broader and longer term benefits of an effective OHS risk management program are:

- Effective strategic planning as a result of increased knowledge and understanding of key risk exposures

- Lower workers’ compensation costs because undesirable OHS outcomes are foreseen and addressed

- Improved audit processes

- Better outcomes in terms of the effectiveness, efficiency, and appropriateness of OHS programs, i.e. programs targeting key risk areas

- Improved communication, both within the organization and between the organization and its external stakeholders

WHS Risk Management is a foundation of an organisation and it touches all facets of an organisation’s activities. For this reason, careful planning is required in the development and implantation of a WHS Risk Management program.

Successful WHS risk management requires a sensible and straight forward approach. The purpose of implementation should not only be seen as a compliance requirement but also as a key business tool in adding value to the organisation objectives.

WHS Risk Management should include regular reviews of all WHS aspects of an organisation’s activities. The effectiveness of the WHS Risk Management Process should be monitored and documented in order to ensure that the risk management strategies continue to be relevant to the organisation’s activities that affect WHS.