What is "risk management" in construction?

Risk management in construction refers to the systematic process of identifying, assessing, and mitigating risks throughout the project lifecycle. This comprehensive approach allows project managers and contractors to anticipate potential issues that could impact project timelines, costs, safety, and overall success. By effectively managing risks, a construction team can implement strategies to minimize the probability of adverse events occurring, as well as develop contingency plans to address issues should they arise.

This process involves a thorough analysis of various factors that could lead to risks, such as site conditions, weather events, regulatory changes, and supply chain disruptions. It also includes evaluating the impact of these risks on project objectives and determining appropriate actions to mitigate them, which may involve adjusting project plans, increasing safety measures, or obtaining additional insurance.

In contrast, hiring skilled labor, selecting reliable subcontractors, and evaluating project costs play important roles in the overall project management process but are not holistic approaches to dealing with the risks associated with construction projects. These activities can be components of risk management but do not encompass the full scope of identifying and addressing risks throughout the entire lifecycle of a project.