Risk management is a crucial function in business organizations. It helps business to avoid capital losses and implement profitable business strategies. Risk managers are the professional behind this function. To get started and excel in this profession, you require a business degree and excellent analytical skills.
What Do Risk Managers Do?
The primary responsibility of risk managers include:
- Identifying and quantifying the types of risks an organization faces
- Development strategies to curb these risks – Common examples of risk management strategies include transferring the risk to another party (taking insurance cover) and spreading the risk (diversifying investments)
- Preparing reports detailing these strategies and presenting them to business managers and investors
- Assessing an organization’s ability to absorb or manager unprecedented risk
- Developing a general risk management program that guides an organization’s business operations
- Enhancing risk awareness in an organization – This involves training employees on how to identify and mitigate risks in their day-to-day activities.
Risk managers work for about 40 hours a week, Monday through Friday. They work in a standard office environment where they conduct assessments and develop risk management strategies.
The job may involve holding frequent meetings with business managers, shareholders and other stakeholders.
According to Salary.com, the median annual salary for risk managers is $102,596. The following table provides the salary ranges for the lowest and highest paid managers.
Level of experience
Lowest earning risk managers
$120,256 - $136,353
The path to becoming a risk manager is quite straightforward. You need to go to college and obtain a bachelor’s degree in risk management and insurance. This is a relatively new course – So you need to research the universities offering it and determine whether they are reputable. Some of the best institutions offering the credential include:
If you can’t access a credible institution, you can also enter the profession through a bachelor’s degree in any of the following fields:
Besides having a degree, you need to have an in-depth understanding of the industry your employer operates. For example, to work for a bank, you will need an understanding of the financial services industry.
Beyond the risk management knowledge, you need the following skills to thrive in the job:
- Strong analytical and research skills
- Excellent business awareness or a detailed knowledge of business operations and loss prevention
- A keen eye for detail
- Strong problem-solving and decision making skills
- Excellent communication and presentation skills
- Sharp numerical skills
- Good negotiation skills.
Even though you may be a risk management graduate, it can be challenging to graduate and walk straight into a management job.
As such, you will typically begin in a junior position, such as risk analyst. As you experience and competence improves, so do your chances of becoming the risk manager.
Once you land a job, don’t put an end to your education. You can pursue professional certification from organizations such as:
- The National Association of Insurance Education and Research
- The Global Association of Risk Professionals
- The Institute of Internal Auditors
It is also advisable to pursue a master’s degree in risk management or business administration.
The American Risk and Insurance Association and the Public Risk Management Association also offer membership opportunities, which you can take to access a variety of professional development resources.
Qualified risk managers can find jobs in a wide range of business organizations. Top employers include:
- Insurance companies
- Construction companies
- Property development firms
- Investment firms
- Telecommunication companies
- Manufacturing companies
Opportunities are also available in government authorities and some non-profit organizations.
After gaining vast experience, you can secure risk management jobs in large corporations or move into consultancy.
According to the Bureau of Labor Statistics, the employment of financial managers, including risk managers, will grow at a slower-than-average rate (9 percent) from 2012 through 2022. Nonetheless, America is an international financial and trade center that attracts several investment opportunities. This means the demand for risk managers will rise.
So if you are convinced your professional life belongs in the business sector, maybe a career in risk management can suit you.
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