Risk Mitigation

Safety Risk: Your workforce is a valuable asset, and completing the project is impossible without them. However, they are exposed to safety hazards since many of their tasks can be dangerous. Although your team is skilled and experienced, accidents can happen. Identify the safety risks your crew faces and the hazards they may encounter, and develop a safety plan to ensure their safety.

Financial Risk: Without funds, nothing can be achieved. No one gets paid, equipment cannot be rented, and so on. Therefore, any factors that might disrupt cash flow must be identified. This can include an increase in material costs, market competition, and so on. The better you understand financial risk, the more likely you are to stay within budget.

Legal Risk: Managing a construction project involves more than just time, cost, and scope constraints. There are legal constraints, such as regulations, code violations, and contract disputes with clients, vendors, and subcontractors. Any of these issues can derail your construction project.

Project Risk: These are the universal project management risks that come with managing any project. These include poor resource management, missed deadlines, and falling behind schedule. The construction project manager must be thorough and aware of any difficulties that might derail the project.

Environmental Risk: This refers to an "act of God," such as floods, earthquakes, and other natural disasters. Anything unexpected that nature unleashes, making the construction site inaccessible, can be expensive and potentially dangerous for a construction project.

Identification: Start by making a list of all the potential issues that could arise during the project. Conduct research, talk to your crew, and explore historical data from similar past construction projects. Although this list is open for edits and updates, you should set a deadline to avoid getting bogged down in analysis.

Assessment: Not all risks are equal, so you need to assess the risks you identified to determine their likelihood and the size of the impact they can have on your project. One way to do this is by using a risk assessment matrix, which charts the likelihood of each risk and its potential impact. This helps you in addressing the risk if it appears.

 Mitigation: This step involves implementing a contingency plan that will reduce the likelihood and impact of the risks you identified earlier. The top priority should be given to risks that are highly likely to occur and have the greatest impact. Assign an owner who will be responsible for identifying the risk and managing its resolution.

 Monitoring: This step is ongoing, as you need to identify risks as they show up. It includes monitoring the effectiveness of your mitigation plan, consulting stakeholders, and keeping them updated on project risks. Engage other department leaders to help, and empower the team to respond to risk. They should note if a risk has moved to a different spot on your risk assessment matrix.

 Reporting: Analyze and share your construction risk management plan with the crew and stakeholders. Reports on risk mitigation allow you to evaluate the effectiveness of the contingency plan. Although this can be done with an Excel spreadsheet, using project management software is more efficient. Online tools gather the data automatically, create dashboards to illustrate progress, and even generate reports that are easily distributed.