Getting the right attitude towards risk in the workplace isn’t just a matter of ensuring business leaders are aware of risk management, and it’s not as simple as putting a health and safety program in place, although both are important.

The right attitude to risk starts with ensuring everyone in the organisation understands that accidents and incidents can affect every business. Further, each individual within the business can potentially be affected by an incident.

Some business leaders choose to ignore risk or sweep incidents under the carpet. They often do so because of a reluctance to spend time and resources uncovering and addressing risks. However, this is a false economy. The fallout from an incident can be so significant, depending on the nature of the incident, that the company could be forced out of business.

While that’s a worst-case scenario, there are plenty of reasons for business leaders to take risk management seriously.

By pretending there is no risk, businesses can virtually ensure the risk will become a reality. Consider a workplace injury as just one example of risk. If an injury occurs by accident in an otherwise safe and risk-managed environment, then the employee may need time off and may be entitled to workers compensation.

But if that injury is caused by the company’s neglect or unwillingness to rectify safety hazards, then the legal, financial and reputational ramifications can be huge.

Taking the right attitude towards risk benefits employees by making them feel safer and more valued. This can help them become more engaged and positive about their work, leading to improved productivity. It may also result in less absenteeism due to workplace injuries or illness, which can include mental illness caused by stress or bullying.

Beyond this, the company benefits from taking the right attitude towards risk because insurance premiums may go down, the business suffers fewer interruptions due to incidents, and the chances of being sued are lower, saving the company money on legal fees and time spent defending against lawsuits.

The question many companies struggle to answer is how to adopt the right attitude to risk. Some believe that conducting a risk assessment is enough.

Conducting a thorough risk assessment and taking steps to mitigate those risks is certainly an essential indicator of the business’s attitude towards risk. But to manage risk effectively, the business needs to create an open culture that rewards all employees for proactively managing risk.

When everyone, regardless of their role, works together to identify and remediate risks, workplaces naturally become safer. The process creates a virtuous circle that leads to more open conversations around risk and more innovative ways to address those risks.

This can include everything from raising awareness of mental health issues to instituting a policy that no employee can walk past an obvious safety hazard without immediately addressing it (such as putting a ‘wet floor’ sign in place). Rewarding employees for personal behaviour that minimises risk can also be effective. This can often be seen in workplace fitness incentives and encouraging staff to take time off when they’re not well.

Additionally, a business should conduct regular, formal education and training sessions that explore the different types of risks the company faces and ask for everyone’s ideas on how to mitigate them. Every employee should be empowered to make a difference.

When companies facilitate an open culture and positive attitude towards risk, they often find that productivity goes up, taking profits with it. Instead of creating extra costs, risk mitigation can boost company performance.