1/4/24, 10:19 AM What is Risk Mitigation & Why is it Important?

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Risk Mitigation
Discover all there is to risk mitigation, how it fits into risk management, and
how to apply it in an organization.

Published 14 Sep 2023

What is Risk Mitigation?

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Risk mitigation is the strategy that organizations use to lessen the effects of business risks. It’s
similar to the risk reduction process, wherein potential business threats are identified before
the organization takes the necessary steps to lessen the effects of these factors.
Some of the threats and risks that modern organizations, businesses, and enterprises deal
with include cybersecurity threats, natural disasters, and anything that may cause damage to
the equipment, personnel, and facilities of an organization.

Why Is Risk Mitigation Important?

Risk mitigation is the process of understanding certain risks and threats, accepting that they
exist, and taking the appropriate measures to reduce their effects in case they happen. It is a
part of the risk management process and is necessary to prepare an organization for any
threats to its operations and processes.

Instead of eliminating threats, risk mitigation focuses on the unavoidable threats and reducing
their impact. This can include natural disasters and other threats that may cause issues in
production and other processes.

These are threats that cannot be eliminated and are completely out of the company’s control.
Risk mitigation is there so that if these events occur, the company has the right measures to
ensure that the damage the organization sustains is kept to the bare minimum.

Types of Risk Mitigation

Risk mitigation isn’t a one-size-fits-all model. Each organization has its own take on it and its
own approach to reducing the effects of certain unavoidable threats. However, some of the
common techniques used for risk mitigation include:

Risk Transfer
This involves transferring the risk allocation between different parties. For example, if an
organization gets materials or products from a third party before distributing them, they can
put all the risk for those certain materials in the hands of the third party instead.

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Risk Acceptance
This involves accepting a certain risk and the threats it has for an organization for a certain
period of time. The organization can focus on mitigating other risks and threats during this
time.

Risk Avoidance
This is the strategy that an organization uses when the consequences of certain risks are too
high for them to mitigate the risk. In these cases, it might be best for an organization to take
measures to eliminate and avoid the risk altogether.

For example, if a certain process is deemed risky for safety and other reasons, risk avoidance
would be not utilizing the process for worker safety.

Risk Monitoring
This involves keeping a close eye on different processes and teams to assess risks as they
happen. From there, measures can be taken to minimize the effect of these risks.

Example
Risk mitigation is pre-emptive. A great example of this is when an organization practices
regular and proper maintenance of its equipment. This way, there’s a smaller chance that their
equipment breaks down. If the equipment breaks down for unavoidable reasons, regular
maintenance can ensure that the damage isn’t too bad. It also makes sure that the repairs
won’t be as costly compared to if the organization didn’t practice regular maintenance.

A Step-by-Step Guide to Risk Mitigation

The risk mitigation process can be fairly complex. Companies regularly face a wide range of
different risks in their day-to-day activities. This is why a risk mitigation team is necessary for

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modern companies looking to comprehensively reduce the effects of certain risks.

While each company has its method and approach to risk mitigation, most strategies follow
similar processes. Here are some key steps organizations and teams use to mitigate risk.

Identifying the Risks

The first step in mitigating risks is understanding which risks are present in the first place.
When identifying risks, it’s important to leave no stone unturned. So, aside from data risks and
breaches, organizations need to consider natural disaster risks, mechanical risks, and
everything involved with their process.

Additionally, all risk mitigation strategies must include the employee’s needs and safety.
Before formulating a strategy for risk mitigation, risk identification is the first step
organizations need to take.

Create Your Own Risk Mitigation Plan

Checklist
Eliminate manual tasks and streamline your operations.

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Assessing Risks
Once the risks are laid out, it’s time for the team to assess the risk. During this phase, it’s
important to quantify the risks and identify the risk levels of certain threats. This process also
involves checking the measures and controls in place to reduce the effects of certain threats.

Prioritizing Certain Risks

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Once the risks are properly leveled and quantified, the team can then figure out which risks to
prioritize. Prioritizing certain risks is a key part of risk mitigation, as companies have to
strongly emphasize the risks that can have the most detrimental effect on the organization, its
processes, and its employees.

When the risk levels are properly assessed, the organization can easily determine which risks
to prioritize and what measures are required to mitigate the risks.

Monitoring Risks
Risks and risk levels can change depending on several factors. This is why monitoring and
tracking the risks throughout the organization is important. That way, the team can determine
when the severity of the risks increases and when measures need to be changed. Additionally,
it also helps them stay compliant with different regulations in place to reduce risk.

Implementation & Adjustments

Once there is a proper plan for risk mitigation, the next step is to implement the plan
throughout the organization. This involves placing all appropriate measures, briefing and
training employees, and most importantly, making adjustments to the strategy as needed.

There’s a chance that there are some required changes after seeing the risk mitigation plan.
It’s important to adjust when the team learns something new to ensure the safety of all
employees and processes and the organization’s compliance with regulations.

FAQs about Risk Mitigation

What is the Difference Between Risk Mitigation & Risk Management?

What Is the Most Common Form of Risk Mitigation?

How Do You Identify Risks?

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What Are the Four Types of Risk Mitigation?

How to Mitigate Risks Effectively with

SafetyCulture

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Why SafetyCulture?
Risk mitigation is a complex process that can be hard to implement. Every part of the
process, from the risk assessment to implementation, can be challenging for an
organization. To make the entire process easier for the organization, tools such as
SafetyCulture (formerly iAuditor) can be a huge help.

SafetyCulture is a comprehensive workplace tool packed with features to boost

productivity, efficiency, and safety. However, the app also has a range of features
available that can help organizations with their risk mitigation strategy. These features
include:

Create risk mitigation checklists from a range of templates available on

SafetyCulture
Establish a robust reporting system to allow employees to report issues as they
happen and help teams identify risks in the workplace
Collect crucial insights and data on risk mitigation measures to assess their
effectiveness
Generate reports from inspections to ensure that all processes are running
smoothly
Automate the monitoring of equipment to identify and catch issues the second they
occur
Facilitate workplace communication so that employees and managers have a clear
line of communication to express any concerns, issues, and newly identified risks.

Try SafetyCulture for free today

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SafetyCulture Staff Writer

Leon Altomonte

Leon Altomonte is a content contributor for SafetyCulture. He got into content writing while
taking up a language degree and has written copy for various web pages and blogs. Aside
from working as a freelance writer, Leon is also a musician who spends most of his free time
playing gigs and at the studio.

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