Risk management is one of the top prioritized careers today. If you think you are going into this career to just be crunching numbers, you are wrong. It is not just a career learned in a day. You must have to show yourself worthy and understand and work with every different department in a company, building relationships as you go. Almost overnight, risk management careers have become one of the most important jobs in the world, and this is not even an understatement.
The reason for the instant rise in risk management career is mostly because of the recent global pandemic which has caused immense job growth. Many companies had to shut down their companies for a while. When this happened, who else can an organization turn to if they had to close down for a month for obvious reasons? The risk managers.
This article breaks down all you need to know about being a risk manager, pursuing a career in risk management, and the step-by-step guide you can take towards building a career in risk management. Let’s get started!
What is a Career in Risk Management?
A career in risk management like any other career involves being fully into and employed in the fields of risk management. Risk management means being able to know the ins and out of a company. Due to this crucial role, risk managers are mostly placed at the top of the company.
In pursuing a career in risk management, you must understand that everything and anything could go wrong and what the consequences or impact on the business would be if it did go wrong. You must be able to deal with the criticality of the various threats faced by the organization. You must also ensure you understand the probability of a given threat happening to the company.
To succeed in your career as a risk manager, you must be able to effectively monitor both external and internal influences which could affect the business you are managing.
In going after a career in risk management, you must be able to objectively analyze data and information to form a big-picture view of risk, have detailed information to determine trends and tendencies, and most important of all, have an in-depth knowledge of the industry, including competitors and adversaries.
Why build a Career in Risk Management?
Asides from the high demand for risk managers recent, there are other reasons why you should consider pursuing a career in risk management.
Imagine being in charge of the monies which a company gets; Being a sole adviser to several companies for running their businesses. Imagine that managers cannot take decisions without letting you know because you would have to decide how such decisions affect the company.
A risk manager even with all these powers is not a lone wolf. You can still expect to get help from- Cyber risk specialists, Security directors, Chief information officers, Threat intelligence specialists, Chief resilience officers.
Your job would be quite important as you would be in charge of evaluating input from all available sources and then quantifying risks for senior decision-makers in the company. If not for anything, the prestige that comes with building a career in risk management is worth it.
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Job Outlook after building a Career in Risk Management?
You should definitely be thinking about where you can work and if you can even get employment after building a career in risk management. But not to worry. The overall outlook for the risk manager is excellent.
Only over the last two decades many organizations and companies have embraced the idea that an executive with company-wide authority and responsibility is needed.
Two years ago, Recruiter.com said, “The overall job outlook for risk management specialist careers has been positive since 2004. Vacancies for this career have increased by 29.04 percent nationwide in that time, with an average growth of 4.84 percent per year.
Demand for Risk Management Specialists is expected to go up, with an expected 11,760 new jobs filled by 2018. This represents an annual increase of 0.95 percent over the next few years.”
What does a risk manager do?
As a risk manager working directly with the company and provide advice to organizations about their risk management. Some of the tasks which you would be required to perform are-
- The foremost role of a risk manager is to develop and communicate risk policies for an organization or a company.
- You would be expected to carry out audits and spontaneous checks to make sure that various staff members are adhering to safety rules in the organization. You can also give advice as regards safety rules that can be implemented.
- When you are employed, one of the first things you should do is to check the facilities to make sure that no hazards are present. If you detect any, you are expected to decide what sort of changes should be put in place to mitigate it.
- You would also be expected to ensure that the current safety and health policies are in compliance with the local and federal regulations.
- You would have to develop risk models for each risk category; market, credit, operational, and reputation.
- As a risk manager, you would be expected to always apply the risk formula to determine appropriate risk acceptance, reduction, elimination, or transference strategies.
- You must be always ready to perform or oversee risk assessments to cover all business risks
- Do not forget to communicate risk policies to stakeholders
- When the company receives any business proposals, you would be expected to review the contracts and proposals to ensure the company does not run on risk by accepting them.
How much do Risk Managers earn?
According to salary.com, “The average risk manager salary in the United States is $111,765 as of May 28, 2020, but the range typically falls between $96,890 and $127,934.
Salary ranges can vary widely depending on many important factors, including education, certifications, additional skills, the number of years you have spent in your profession.”
Payscale.com lists the average risk manager salary at $86,840, but the location, the experience, and the certifications you hold will invariably make a significant difference in overall compensation.
What titles can a risk manager take?
In building a career in Risk Management, you must know there are several other titles you can take asides from being called a risk manager. Some of them include-
- Risk Analyst
- Risk Management Consultant
- Chief Risk Officer
- Risk Control Supervisor
- Director of Corporate Risk Management
- Risk manager
What do I study to build a career in Risk Management?
Risk management is one of the rare jobs you can have without a degree if you have a reasonable length of job experience. However, having a degree or certification can make your employer pick interest in you and also ensure that you are paid higher. Some of these degrees and certifications include-
- A bachelor’s degree in risk management, finance, economics, business management, statistics, computer science and/or other related fields.
- One to two years of related experience is preferred.
- Professional certifications for Risk Management Professionals like the Certified Fraud Examiner (CFE), Certified Risk Analyst (CRA), Certification in Risk Management Assurance (CRMA), Financial Risk Manager (FRM), Professional Risk Manager (PRM) and/or Certified in Risk and Information Systems Control (CRISC).
Depending on the organization where you are working, you could also have-
- A bachelor’s degree in business administration or management
- An MBA
- A law degree
- A degree in finance or economics
What do employers look out for in being employed for risk management
In building a career in Risk management, you must take note of the things your employer could look out for before employing you. Asides from your skills and abilities, they could look out for other things like in-depth knowledge on
- Internal controls
- Corporate compliance
- Corporate governance
- Information systems security
- Job experience
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Skills to have in building a Career in Risk Management
- Problem solving skills- To be successful in building your career as a risk manager, you must have the problem solving to solve any problems which comes up in the company or organization.
- Analytical skills- This skill is highly important in helping you to solve complex problems. You must have the ability to think critically, analyze information and profer solutions.
- Communication- You must be able to communicate efficiently the result of your findings. You must be polite and have the ability to go straight to the point. You must be able to communicate your findings in simple terms everyone is likely to understand.
- Business understanding- You cannot build a solid career in risk management if you cannot understand the business you are working for in the first place. In understanding the business, it is already guaranteed that you would do a good job.
- Negotiation and diplomacy- When you identify a risk, you must be able to effectively handle the risk with negotiations and diplomacy. When the risk to a business is a person, you must be able to effectively carry out your task to ensure it does not give rise to more problems.
- Working under pressure- Risks can change in an instant when something unexpected occurs and you need to be able to update your strategies and react at a moment’s notice. If things go wrong, your business continuity plans need to save the day.
- Financial knowledge and skills- Most businesses would require you to identify and measure the risk in their financial sector. You must have this skill to be able to properly strategies to mitigate those risks.
- The skill to build relationships- You would need to be good at relationship building because in order to look at and manage risks, you would have to manage relationships between several different departments, as well as external groups like the stakeholders.
- Management and leadership skills- This is one of the most important skills you must ensure you have while building a career in risk management. This skill would help you support your staff to also manage risk in their departments, help them accept changes, as well as great leadership to make it all happen.
- Adaptability skills- You must be able to effectively adapt to changing environments. Each day brings a new concern and you would constantly be sifting form ethical to moral climates, working with new people who have come with a proposal for your company.
Step by Step Guide in Building a Career in Risk Management
In building a career in risk management, the steps you should take are-
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Step 1- Your career has to begin with education.
The minimum educational requirement for a risk manager position is a Bachelor’s degree in finance, accounting, or any related field.
You can get this degree at any school of your choice. There are approximately 75 schools in the U.S alone that offer risk management as a course. You can check these out to get started.
Also sign up for the Bionic Turtle FRM Course that will help you study with plenty of notes, PDFs, and practice questions for your FRM Certification.
Step 2- After you have graduated, strive to get job experience.
Most employments today lookout for someone with job experience because it gives a sense of job security. Even if you are not where you want to be yet, just work there for a few years to get the ropes and the experience in your resume.
Step 3- After you have gained job experience for about 2-3 years
You can then start applying for various jobs as a risk manager.
Step 4- Once you are employed, make sure you understand the business you are about to work for.
Understanding the business is the first big step towards a successful career.
Step 5- Do not slack.
Always do what you would do even on your first day of work. Come to work early, be polite, and do your work diligently.
Step6- The first thing you should do in the company is to identify any potential risks.
Find the cause of the risk, devise a solution to the problem, come up with preventative plans. Once you have successfully done this, you have indirectly endeared yourself to the heart of your employer.
Step7- Be ready to go the extra mile.
Remember you are building a career. You must be ready to make sacrifices and put your job first. Be patient and when need is, step out of your shoes to ensure that things are done.
Step 8- Keep your job. Listen attentively to your employer. Do your best.
You are off to building a great career in risk management in 2022.
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Frequently Asked Questions (FAQ)
How do you perform risk management identification?
A. These are skills you would be taught during your time in school getting a degree in risk management. If you were not taught, attempt going for internships or having a mentor who can teach you these things.
How do you know a company’s blind spots are when it comes to risk management?
A. From your experience and with the help of the team you have put together, you should be able to effectively find these blind spots. You must learn to pay attention too.
How do you prepare to respond to extreme events?
One of the skills you must possess in being a risk manager is problem-solving and analytical thinking skills. With these skills hand in hand, you can be able to respond to extreme events hand in hand.
Do you have a strategy when it comes to risk management?
Yes. Most risk managers have a strategy for managing risks found in their place of work. Find what works for you and move from there.
Do risk managers make good money?
Yes. Risk managers are considered to make a fairly good salary as long as they have the right degrees. Reports show that, on average, a risk manager in the US makes approximately $117, 000 per year. Apart from that, in pursuing a career in risk management you will also receive bonuses and packages such as a flexible spending account, health, dental, and vision insurance, as well as relocation assistance if you need it as compensation or pay.
Is pursuing a career in Risk Management a good idea?
Absolutely. The pay is good and the job is interesting. Why not.
If risk management is an area that interests you, start researching the roles early. In planning ahead, you can ensure you would not be caught unawares. You would always be ready to manage any risk that comes out head-on.
Risk comes in all shapes and sizes, companies can lose money, assets, and employees overnight for reasons you might have not even thought about a mere few months ago. Your success in managing these risks is what would keep your career in risk management flying high.