Risk Matrix: An Essential Tool for Effective Risk Management

In health and safety management, identifying and mitigating risks is paramount. This is where the risk matrix comes into play. As an easy to understand tool used to determine:

1. The likelihood of the risk affecting the organisation.
2. The potential impact of the risk on the organisation.

As such, it is an invaluable aid to managing risk

What is a Risk Matrix?

A risk matrix is a visual representation of risk where they are represented by colour-coded cells, providing a structured way to identify, analyse, and prioritise them.

It is usually a 5×5 grid but can be 3×3 or 4×4.

By using the grid to categorise risks according to their likelihood and impact, organisations can make informed decisions on how to allocate resources and introduce control measures.

The matrix combines the likelihood with the impact of each risk to determine its priorities.

Components of a Risk Matrix

A risk matrix consists of several key components:

Likelihood: The probability of a specific risk event  occurring. It is usually categorised into different levels, such as from rare to almost certain.

Impact: The potential consequences or severity of a risk event. This can be categorised from low impact to catastrophic or fatal.

Risk = Likelihood x Impact

Calculating risk

Remember Risk = Likelihood x Impact

Deciding on what’s acceptable will depend on your organisation’s risk appetite. In the example shown, you can see:

• 1-3: Acceptable  No further action may be needed and maintaining control measures is encouraged.
• 4-8: Adequate  May be considered for further assessment.
• 9-16: Unacceptable  Must be reviewed to carry out improvement strategies.
• 17-25: Unacceptable  Must implement immediate cease in activities and endorse for immediate action.

Building a Risk Matrix

Step 1. Identify hazards: The first step in building a risk matrix is to identify the potential risks present in your organisation.

To do this, you may want to gather input from relevant stakeholders, such as staff, staff reps, h&s managers and key decision-makers. Brainstorming sessions, interviews, and data analysis can help identify risks.

Step 2. Now you are ready to sort risks according to their likelihood and impact.

Step 3. Next, plot the risks on the risk matrix according to likelihood and impact.

Step 4. Create an action plan to address each area of risk.

Pros and Cons of Using a Risk Matrix

Benefits of using a risk matrix include:

• It presents data  is a clear and easy to understand way.
• It can be modified or adjusted easily depending on the situation.
• It provides a standardised approach to risk assessment, making it easier for organisations to compare and prioritise risks.
• It also allows organisations to allocate resources more efficiently. By understanding the level of risk associated with different events, organisations can allocate resources accordingly.

Disadvantages:

While risk matrices are valuable tools for risk management, they do have some limitations and challenges. These include:

• Often oversimplified. Oversimplification may not capture the complexities of certain risks, leading to incomplete risk assessments.
• Static nature: Risk matrices do not consider how risks can change or evolve over time. In order to maintain their effectiveness, they should be regularly reviewed and updated.
• Subjectivity: The assessment of probability and impact involves a degree of subjectivity. Different individuals may assign values differently, leading to inconsistent results.
• Quality  of data: Their accuracy relies heavily on the availability of relevant data.
• In some cases, categories may not be specific enough to assess risks accurately.
• May create a false sense of security around risks.

Example

As an example, consider that a worker is tasked with picking up heavy boxes from the floor and carrying them over to a table for sorting. The worker typically carries 20 – 30 boxes per hour.

As part of your risk evaluation, you’ve determined that the worker has a reasonable chance of dropping the box on their foot. Repetitively reaching, twisting, and lifting 15-pound boxes could also result in a muscle strain to the worker’s lower back. Using your risk matrix, you’d select a Likelihood value of “Possible” (3 points).

The next step is to consider the consequences the risk could result in. If the worker strains a muscle or breaks a bone in their foot, aside from their injury and suffering,  you’d need to find another employee to fill in for them while they are unable to work. The consequences could be fairly bad, so you select an Impact value of “Moderate” (3 points) on your matrix. By multiplying those values together (3×3), you reach an overall risk level of 9, putting the hazard into the severe (and red) category.

Now you can outline and implement controls, like placing the boxes closer to the table, thus reducing the time the worker would need to carry them. You can also provide them with steel-toed boots to better protect their feet in case they should drop the item.

With those controls in place, you can now repeat the exercise of selecting a likelihood and impact value using the risk matrix. You could probably lower the Likelihood to 2 and the Impact to 2 making an overall score of 4

At this point, you might decide that this is an acceptable level of risk for the task, or decide to brainstorm and implement additional controls to bring the hazard’s risk to even lower levels.

Conclusion:

In conclusion, a risk assessment matrix is a powerful tool in HSE risk assessment and management.

By combining the likelihood and impact of risks, organisations can make informed decisions on where to concentrate their time, efforts and budget to make a safer workplace.

Find out about maaging risk with our accredited one-day Risk Assessment Training Course.