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The Empuls Glossary

Glossary of Human Resources Management and Employee Benefit Terms

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Risk management is the systematic process of identifying, assessing, prioritizing, and mitigating risks that may affect an organization's ability to achieve its objectives. It involves understanding potential threats and opportunities, and implementing strategies to minimize negative impacts while maximizing opportunities for growth and success.

What is risk management?

Risk management is the process of identifying, assessing, and prioritizing risks followed by coordinated efforts to minimize, monitor, and control the impact or probability of unfortunate events or to maximize the realization of opportunities.

What is enterprise risk management?

Enterprise risk management (ERM) refers to the comprehensive approach a business takes to identify, assess, and manage all potential risks across the organization, considering their interdependencies and impact on the achievement of strategic objectives.

What is risk management in healthcare?

Risk management in healthcare involves identifying, assessing, and mitigating risks that could affect patient safety, quality of care, financial stability, regulatory compliance, and reputation within healthcare organizations.

What does a risk manager do?

A risk manager is responsible for identifying, analyzing, and evaluating potential risks within an organization, developing strategies to mitigate or eliminate those risks, implementing risk management policies and procedures, and monitoring their effectiveness.

What is operational risk management?

Operational risk management involves identifying, assessing, and mitigating risks arising from the day-to-day operations of an organization, including processes, systems, people, and external factors, to ensure operational continuity and resilience.

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What is risk in risk management?

In risk management, risk refers to the uncertainty or potential for loss, damage, harm, or failure to achieve desired outcomes. It encompasses both threats and opportunities that may impact an organization's objectives.

What is risk management in business?

Risk management in business involves the systematic process of identifying, assessing, prioritizing, and mitigating risks that could affect the achievement of business goals and objectives, encompassing various areas such as financial, operational, strategic, and compliance risks.

What is third-party risk management?

Third-party risk management involves assessing and managing risks associated with vendors, suppliers, contractors, partners, or any external entities that have a relationship with an organization, to ensure their activities do not pose threats to the organization's operations or reputation.

What does risk manager do?

Risk manager identifies potential risks, evaluates their impact and likelihood, develops strategies to mitigate or manage those risks, implements risk controls and measures, monitors their effectiveness, and communicates risk-related information to stakeholders to support informed decision-making.

What is a risk management plan?

A risk management plan is a formal document that outlines an organization's approach to managing risks, including the processes, methodologies, responsibilities, resources, and timelines for identifying, assessing, and mitigating risks throughout the organization.

What is risk in project management?

In project management, risk refers to uncertain events or conditions that, if they occur, may have a positive or negative impact on the project's objectives in terms of scope, schedule, cost, quality, or other key parameters.

What are the 5 types of risk management?

The five types of risk management are:

  • Financial risk management
  • Operational risk management
  • Strategic risk management
  • Compliance risk management
  • Reputational risk management

What are the 5 principles of risk management?

The five principles of risk management are:

  • Risk identification
  • Risk assessment
  • Risk control
  • Risk financing
  • Risk monitoring and review

What are the 5 elements of risk management?

The five elements of risk management are:

  • Risk identification
  • Risk analysis
  • Risk evaluation
  • Risk treatment
  • Risk monitoring and review

What is the importance of risk management in various sectors?

Risk management is crucial across diverse sectors such as finance, healthcare, manufacturing, and more. It helps organizations anticipate and prepare for uncertainties, thereby reducing the likelihood of financial losses, reputation damage, operational disruptions, and legal liabilities.

The primary purpose of risk management is to proactively address potential threats and opportunities to enhance decision-making, resource allocation, and overall organizational resilience. By effectively managing risks, organizations can optimize their performance, protect stakeholders' interests, and sustain long-term growth.

What are the different types of Risks?

The different types of risks are:

  • Financial risk: Involves potential losses due to market fluctuations, credit defaults, or liquidity issues.
  • Operational risk: Arises from internal processes, systems, or human error that could disrupt business operations.
  • Strategic risk: Relates to factors affecting an organization's long-term goals, such as market competition or technological changes.
  • Compliance risk: Results from failure to adhere to regulatory requirements, leading to legal penalties or reputational damage.
  • Reputational risk: Threatens an organization's public image due to negative publicity, scandals, or unethical practices.

What are the emerging trends and technologies in risk management?

The emerging trends and technologies in risk management are:

  • Artificial intelligence and machine learning in risk analysis: Utilizes advanced analytics and algorithms to analyze large datasets and identify patterns, trends, and potential risks.
  • Blockchain and risk transparency: Enhances transparency and traceability of transactions, contracts, and supply chains, reducing fraud and improving risk management.
  • Predictive analytics for risk forecasting: Predicts future risks and trends based on historical data, enabling proactive risk management and decision-making.
  • Cybersecurity risks and mitigation: Addresses growing threats to data security and privacy through robust cybersecurity measures, awareness training, and incident response plans.

What are the risk identification techniques?

The risk identification techniques are:

  • SWOT analysis: Evaluates strengths, weaknesses, opportunities, and threats to identify potential risks and opportunities.
  • Scenario analysis: Examines various hypothetical scenarios to assess their potential impact on the organization.
  • Risk registers: Catalogs identified risks along with their characteristics, potential consequences, and mitigation strategies.

What are the risk mitigation strategies?

the risk mitigation strategies are as follows:

  • Risk avoidance: Eliminates or minimizes exposure to high-risk activities or situations.
  • Risk transfer: Shifts risk to third parties through contracts, insurance, or outsourcing arrangements.
  • Risk reduction: Implements controls and measures to mitigate the likelihood or severity of identified risks.
  • Risk acceptance: Acknowledges and tolerates certain risks deemed unavoidable or manageable.
  • Risk sharing: Collaborates with partners or stakeholders to distribute and collectively manage risks.

How to do risk assessment?

Risk needs to be assessed in the following manner keeping in mind the methodology:

  • Quantitative risk assessment: Involves numerical analysis to measure risks in terms of probability and potential financial impact.
  • Qualitative risk assessment: Focuses on subjective evaluation of risks based on their perceived likelihood and potential consequences.
  • Risk matrix and probability-impact assessment: Utilizes a matrix to categorize risks based on their likelihood and severity of impact, enabling prioritization of mitigation efforts.
  • Key risk indicators (kris) and risk thresholds: KRIs are metrics used to monitor and detect early signs of potential risks, while risk thresholds define acceptable levels of risk exposure.
  • Risk appetite and risk tolerance: Risk appetite defines the level of risk an organization is willing to accept to achieve its objectives, while risk tolerance sets boundaries for acceptable deviations from this appetite.

Employee pulse surveys:

These are short surveys that can be sent frequently to check what your employees think about an issue quickly. The survey comprises fewer questions (not more than 10) to get the information quickly. These can be administered at regular intervals (monthly/weekly/quarterly).

One-on-one meetings:

Having periodic, hour-long meetings for an informal chat with every team member is an excellent way to get a true sense of what’s happening with them. Since it is a safe and private conversation, it helps you get better details about an issue.


eNPS (employee Net Promoter score) is one of the simplest yet effective ways to assess your employee's opinion of your company. It includes one intriguing question that gauges loyalty. An example of eNPS questions include: How likely are you to recommend our company to others? Employees respond to the eNPS survey on a scale of 1-10, where 10 denotes they are ‘highly likely’ to recommend the company and 1 signifies they are ‘highly unlikely’ to recommend it.

Based on the responses, employees can be placed in three different categories:

  • Promoters
    Employees who have responded positively or agreed.
  • Detractors
    Employees who have reacted negatively or disagreed.
  • Passives
    Employees who have stayed neutral with their responses.

How to implement the risk management processes?

The risk management process are as follows:

  • Establishing risk management frameworks: Develops structured approaches, policies, and procedures for managing risks across the organization.
  • Roles and responsibilities in risk management: Assigns clear roles and responsibilities to individuals or teams responsible for identifying, assessing, and mitigating risks.
  • Integrating risk management into business processes: Embeds risk management considerations into decision-making processes, project planning, and daily operations.
  • Creating a risk management culture: Fosters a mindset of risk awareness, accountability, and continuous improvement throughout the organization.

How to monitor and control risk?

To monitor and control risk, do the following:

  • Continuous risk monitoring: Regularly monitors key risk indicators and performance metrics to track changes in risk exposure and effectiveness of mitigation measures.
  • Performance metrics and key performance indicators (KPIs): Establishes measurable objectives and benchmarks to evaluate the effectiveness of risk management efforts.
  • Risk reporting and communication: Communicates risk-related information transparently and effectively to stakeholders, enabling informed decision-making.
  • Adjusting risk management strategies: Adapts risk management strategies and controls in response to evolving internal and external factors, emerging risks, or lessons learned from past experiences.

Why is risk management important?

Risk management is important because it helps organizations anticipate and prepare for potential threats or opportunities, enhances decision-making processes, protects assets and resources, improves operational efficiency, ensures compliance with regulations, and ultimately contributes to the achievement of strategic objectives.

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