Risk management is the process of identifying, evaluating, and controlling threats to the organization’s capital.
These threats or risks may come from a variety of sources, including financial uncertainty, legal obligations, management errors, accidents, and natural disasters.
Risk management has become a priority for digital businesses. Therefore, it plans increasingly include business processes to identify and control threats to their digital assets (including property).
Every company and organization faces the risk of unexpected and disruptive events, which may cause the company to lose funds or cause permanent closure. Risk enables the company to prepare for unexpected events while minimizing risks and additional costs before they occur.
Risk Manager Specialist
A risk manager is someone accountable for keeping a business on its feet and transferring it into profits.
Risk management specialists are money managers that use specific training and skill to spot attainable risks that would lead to lower-income and better insurance rates for the business.
These specialists assess risks and implement plans and methods to attenuate business losses. Lowering loss conjointly lowers the value of insurance, leading to a bigger revenue flow for the business.
Duties Of A Risk Manager
Risk managers play various roles to minimize potential risks or losses, including the materials, personnel, or cash flow of the companies they serve.
You are responsible for identifying and resolving any insurance or safety issues that may arise. If ignored, it may lead to litigation. To achieve the goal of reducing risks, these professionals need to constantly think about the internal operations of the business, analyze the areas that may bring risks, and then take actions to reduce these risks.
You can consult the senior management on various tasks, such as filing compensation claims for employees, reviewing working conditions, reading guidelines and legal requirements, interviewing customers, finding conditions for responsibilities, and negotiating wages and negotiation terms with labor unions.
To identify potential risks, these professionals can also create different scenarios and decide which of them may pose risks to company assets (including personnel and others).
Once the risks are identified, risk experts are responsible for compiling data and information in simplified reports with graphs and statistics to verify the results, and then submit them to management.
Management experts are needed to develop plans or guidelines to reduce, avoid or eliminate the company’s obligations and losses.
Generally speaking, risk management is a highly specialized field that requires well-trained and experienced experts.
Skills Required To Become A Risk Manager
Analytical skills: To assess and predict risk, any manager must have analytical skills, but it does not stop there. The ability to collect and analyze data is one thing. To use this data to make strategic or difficult decisions is more important.
Problem-solving: When potential risks are identified, you should be curious enough to look at the business problem and find key solutions. Able to seek real answers and strategically seek solutions.
Financial knowledge: All companies face certain financial risks, these numbers are usually very scary. But a good manager can identify and measure risks and implement strategies to mitigate them.
Strict supervision: You must take the time to stay up-to-date and understand all regulatory changes and updates. To identify and manage risks, you need to manage relationships between multiple different departments and external parties such as stakeholders.
Working under pressure: Risk management is its core pressure. It means managing big problems and solutions. If not controlled, very real and costly problems will usually arise.
Adaptability: Are you flexible? You can deal with new political, financial, and professional issues. As a manager, every day brings new challenges that change the business environment.
Thirty years ago, managers did not have to worry too much about cyber attacks. Now, data breaches, ransomware, and network outages are real risks. Political factors should also be considered. A change of government may lead to changes in the business environment.
Qualifications Required To Be A Risk Manager
A risk manager should have at least a bachelor’s degree in risk management. More organizations are also looking forward to employing candidates with a master’s degree.
An acceptable master’s degree is an MBA in risk management, but an MBA in economics, accounting, or finance is also acceptable. These degrees show that you have the required analytical skills and understanding of software and financial analysis.
Some organizations require that risk managers be certified or licensed, and there are multiple certifications, including operational risk management certificates, risk manager certificates, and international enterprise risk management certificates.
These certifications are provided by organizations such as the International Risk Management Organization and the International Association of Professional Risk Managers (PRMIA).
Average Earnings Of A Risk Manager
The average salary of a risk manager is $114,421. However, it is usually between $99,196 and $130,979.
The salary range may vary based on many important factors, including education, certification, additional skills, and the number of years you have worked in the professional field.
Job Description Of A Risk Manager
The tasks according to the risk management job description include:
- Develop and implement the overall risk management process for the organization, including analyzing the financial impact on the business when risks arise.
- Risk assessment: Analyze current risks and identify potential risks.
- Conduct risk assessment: evaluate the company’s past risk management and compare potential risks with the company’s standards, such as costs and legal requirements.
- Determine the risks the company wants to take.
- Prepare risk management and insurance budgets.
- Train the board on key business risks, ensure managers understand the risks that may affect their department, and ensure employees understand their responsibilities for personal risks.
- Explain external risks, represent company management and stakeholders.
- Develop business continuity plans to limit risk.
- Implement health and safety measures and purchase insurance.
Careers In Risk Management
- Risk analysts
- Insurance analysts
- Loss control officers
- Risk consultants
- Risk control consultants
- Risk management consultants
- Corporate risk managers
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