June 21, 2024 8 min read

Guide to Risk Management in Facilities


Facilities Management


Risk Management

Practicing risk management in facilities is an essential way to enhance safety, close skill gaps, and improve workplace productivity. But what exactly is risk management in facilities, and how can you implement it within your own organization? In this blog, we’ll break down the key steps of risk management and provide strategies so you can utilize them yourself.

What is Risk Management in Facilities?

Risk management in facilities is the process of identifying, assessing, and mitigating risks that could potentially impact the safety or efficiency of a facility. This process includes a variety of strategies designed to minimize the risk of a negative incident occurring, as well as the severity of consequences in the case that something bad does occur.

Facility risk management is often broken into five key steps:

  1. Identification
  2. Analysis
  3. Prioritization
  4. Addressing the Risk
  5. Monitoring

Why is Facility Risk Management Important?

Risk management in facilities is crucial for numerous reasons. This process benefits organizations by:

  • Ensuring safety: Proper facility risk management creates processes to proactively identify and resolve hazards, keeping your workforce safe.
  • Reducing financial losses: Mitigating hazards and avoiding employee injury and equipment downtime saves your organization money.
  • Protecting assets: A more proactive approach to facility management is key to managing assets and ensuring operations.
    Improving workplace productivity: Identifying and addressing risks in facilities helps ensure smooth operations and worker safety.

Organizations that prioritize risk management are able to provide a safer work environment for their employees, as well as boost cost efficiency and fulfill OSHA compliance.

Enhancing Facility Safety

Did you know that large facilities lose an average of 27 hours a month due to equipment failure? This lost time costs about $532,000 for each hour of planned downtime. Additionally, when equipment breaks down, it costs 3 to 10 times more than regular maintenance would.

Furthermore, neglected equipment and machinery can pose major safety risks to workers.

This is why it’s absolutely essential to enhance risk management in your facilities, starting with workplace safety.

Common Risks in Facility Management

Working in a facility poses a variety of potential risks. Common risks in facility management may include:

By identifying, assessing, and mitigating these risks, organizations can greatly improve the overall state of their facilities. Learn how to evolve your industrial maintenance workforce training by getting a copy of the guide below:

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Identifying and Assessing Risks

Identifying and assessing risks are two key steps within the process of risk management that help enhance facility safety.

Risk identification is the process of finding and describing risks that might help or prevent a company from achieving its goals.

Risk identification prompts you to ask essential questions like:

  • What are the potential dangers in this facility?
  • How can we ensure that things run more smoothly in the workplace?

After considering the answers to these questions, you can move onto risk assessment.

Once risks have been identified, a thorough risk assessment must follow. This step requires you to evaluate the likelihood and potential impact of each risk. You may ask yourself:

  • How well-suited would this facility be in the event of a flood?
  • What would the potential damage look like?

Key Risk Indicators in Facilities

Key Risk Indicators (KRIs) are metrics used to predict risks that could harm a facility’s operations. These KRIs provide advance warning that risks may occur, allowing facility managers to act before any damage is caused.

Here are some frequent Key Risk Indicators in facilities:

  • Incident Frequency Rate: Data that measures the probability of accidents or injuries occurring in the workplace over a period of time.
  • Equipment Downtime: Any stretch of time when a piece of equipment is not actively working.
  • Mean Time Between Failures (MTBF): Metrics showing the amount of time that certain equipment functions without disturbances.
  • Response Time to Issues: The average amount of time that it takes for workplace issues to be addressed.
  • Regulatory Violations: Failures to follow industry-specific regulations and guidelines.

By keeping an eye out for KRIs such as these, you can maximize your potential to identify facility risks before they become a problem.

How Do You Conduct a Risk Assessment?

Conducting risk assessments is a key part of risk management in facilities. You can conduct a risk assessment by following these steps:

  1. Hazard Identification and Space Evaluation. Collecting information about potential hazards in your facilities.
  2. Risk Evaluation. Using metrics, study probability and severity ratings for each hazard identified.
  3. Risk Mitigation and Control. Eliminate, substitute, or control each identified hazard accordingly.
  4. Verification Procedures. Ensure that you conduct risk assessments in your facilities regularly.

How to Mitigate Risk in Facilities

Risk management in facilities should be taken seriously, which means that risk mitigation is an essential step for all facility managers and employees.

What Are the Four Risk Mitigation Strategies?

When it comes to mitigating risks in the workplace, there are four key strategies that should be utilized:

Risk Avoidance Risk Reduction Risk Transference Risk Acceptance
Take measures to avoid the risk from occurring. Reduce the probability of a risk happening or the severity of its impact, should it occur. Pass the risk consequences to a third party, like an insurance company. If the possibility of the risk occurring is minimal, accept it as it stands.

The risks you may identify in a facility vary greatly in terms of type, probability, and severity. By assessing the specifics of a risk, you can determine which of the above strategies will be most suitable in the process of risk mitigation.

Implementing Safety Programs

Creating a world-class safety program requires proper safety training and management.

One of the most effective ways to mitigate risk in facilities is by ensuring that your employees can identify and assess any potential threats. Utilize Vector Solutions EHS Management Software to identify and prevent risk in facilities, efficiently manage employee onboarding, and reach productivity improvement.

Use your insights and data from your EHS management solution to create a training program that addresses skills and competency gaps. There’s a wide range of best practices that should be taught to improve workplace safety, including:

  • Train employees on the basics of first aid. Annual refresher training on first aid is key to creating a safety culture that saves lives.
  • Build awareness about fall protection. Help save lives by eliminating dangerous factors such as inattentiveness, slippery surfaces, and insufficient training.
  • Train workers on heat stress and hazard prevention. Common workplace threats that can be mitigated with proper employee training.

Following these trainings, ensure that employees have learned critical skills by using Competency Assessments.

How to Address Safety Incidents Efficiently

Even after establishing the above practices within your facilities, safety incidents can still arise. Here’s a basic structure for addressing safety incidents efficiently:

  • Respond immediately
  • Alert relevant authorities
  • Document and investigate the incident
  • Inform employees
  • Implement corrective actions
  • Perform regular risk assessments

By following these steps and utilizing the resources available in this guide, you’ll be able to smoothly address risk management and significantly boost safety awareness in your facilities.

The Future of Risk Management in Facilities

Technology is rapidly changing and shaping the future of risk management in facilities. Various trends have emerged that will guide risk management for years to come, including:

  • Remote Communication: Technology-based training and communication has become the new norm, so it’s important that facility operators and managers implement these virtual communication systems throughout their workforces.
  • Greater Emphasis on Health and Safety: Since the global COVID-19 pandemic, health and safety measures have come to the forefront of workplace priorities.
  • Automated Systems: The adoption of automated systems and robotics is steadily increasing alongside improvements in facility management effectiveness.

It’s essential to stay ahead of the curve. Utilize the resources provided in this blog to effectively integrate risk management strategies into your own facilities today.

How Vector Solutions Can Help

You’re likely focused on improving risk management in order to advance facility safety, strengthen workplace productivity, and create a safer working environment.

Combining strategies for identifying, assessing, and mitigating risks with comprehensive training is key to achieving your business objectives.

Vector Solutions provides award-winning, online training specifically designed for facilities teams. Our courses are designed to close skills gaps, accelerate onboarding, and improve the performance of your teams.

Ready to learn more about implementing risk management in your own company? Check out Vector Solutions’ comprehensive facility management training library to learn more.

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