The risk could be defined as the impact that could happen on an operation, goal, task, or planning of an organization. It could be a positive or negative impact. If the impact is positive, that could be advantageous and profiting to the organization. However, the problem lies if the impact brings negative effects. Facing the risks is one thing, but it is more preferable to prevent them or having secure planning on how to handle the risks that may occur. This is where risk assessment and management come into play.
Risk management, on the other hand, refers to the processes of analysing, identifying, and responding to the risks that may exist in any operations or business of an organization. Effective risk management would be able to control and handle all the risks that may occur since it encompasses the counter measures for any unwanted scenarios. In responding to risk, the most common ones are either avoiding, mitigating, or accepting. Avoiding is by removing all the root cause of the risks while mitigation is by lowering the financial budget to lower the chances of risks happening. Acceptance on the contrary is by accepting the risks by having contingency plans should the risk occur. No matter how a company deals with the risks, risk management is very fundamental since it could provide clear planning on how to reduce, avoid, and facing the risks. Handling risks properly will ensure smooth operations of the company and prevent any losses regardless of financial or even materials.
To sum up, the person in charge of leading and managing this whole event is known as the risk manager. Now, let’s look at the details of a risk manager. This article provides the information about the job title of risk manager, from the job description, skills, salaries, tools, and many more.
What is a Risk Manager?
As a risk manager, you will be in charge of analysing the operations conducted in an organization or company to identify the risks that may exist. A risk manager is responsible to provide planning or countermeasures to reduce those risks or prevent them altogether. Aside from implementing the actions towards risk management, they should manage and lead the risk management team.
A good risk manager should possess high analytical skills since they should be able to pinpoint the risks that may be indistinguishable from others. Not being able to detect this may bring harm to the company, in terms of financial risks, material risks, security risks, safety risks, malfunctioning risks, or any other risks that may lie under all the various operations conducted in the company. Performing a risk assessment effectively and thoroughly may provide the guidelines in which the risks could be controlled if the scenarios occur. That aside, a good risk manager should propose new strategies and recommendations to improve on existing risk management in the company. Last but not least, they should ensure all the operations are compliant with the state, local, and federal policies and laws.
Risk Manager Job Description
Generally, a risk manager provides consultation on risk-related information directly with all kinds of organizations or companies. The subject of consultation may vary, for instance, on finance or even material risks.
The following are several examples of a risk manager’ tasks and responsibilities:
- Designing a risk management plan in an organization
- Analysing and assessing the risks that are present in an organization
- Determining the financial, safety, and security risks for a company
- Performing risk evaluation and assessment
- Reviewing the history of how the company handled risks in the past
- Ensuring risks are minimized in the company or organization
- Record keeping the probable loss or risks that may occur in the organization
- Planning the steps and procedures that ought to be taken by staff if issues occurred
- Implementing the risk management procedures in a company
- Managing the risk management plan
- Monitoring facilities for any probable issues or malfunctions
- Providing solutions and decisions on overcoming the hazards that occurred
- Performing audit to ensure all staff abide by the rules established
- Providing risk consulting to companies or organizations
- Reviewing the existing procedures and policies conducted in the organization
- Recommending change that could be implemented on the facilities to improve efficiency or cut costs
- Preparing a risk-management budget
- Aligning the risk management goals with the company’s goals in general
- Ensuring compliance of operations with the federal and local policies, laws, and regulations
- Working with multiple teams and managers to ensure the smooth flow of jobs
- Reporting and documenting necessary information and data on risks
- Training new and existing staff to improve the performances and operations happening in the company
- Providing certification and courses for staff so that they are well-versed of the risks
- Making sure the staff and team members avoid risky operations
- Handling the databases for risks related information or data
- Gathering confidential information from the client
- Presenting the analysis of risk to the client or the organization
- Managing risk management activities to isolate accountability
Listed are the common tasks and responsibilities of a risk manager. However, it should be noted that the tasks may differ and vary depending on which field you are working in. Different organizations may also demand different roles in your job according to their goals and needs.
Risk Manager Skills
A good risk manager should possess both hard and soft skills to keep up with the demand of this job title. Aside from dealing with the risk in the company, they are the manager of the company hence needing the necessary skills to ensure smooth operations from their side as well as the employees’ performances.
The following are some examples of skills needed to become a great risk manager:
- Risk management skill
- Risk control skill
- Insurance policies
- Data analysis
- Market knowledge
- Regulatory compliance
- Claim handling
- IT risk
- Framework
- Program management
- Data modelling
- Internal audit
- Compliance audit
- Statistical analysis
- Financial modelling
- Data handling
- Computer skills
- Data entry
- MS Office skills
- Problem-solving skills
- Multitasking skills
- Communication skills
- Negotiating skills
- Presentation skills
- Strategical thinking
- Leadership skills
- Researching skills
- Training and coaching skills
- Analytical skills
- Detail-oriented
- Organizational skills
Risk Manager Salary
The following are the salaries for the risk manager based on the locations in US and from the experiences.
- Average base salary in US
According to PayScale, the average salary earned by a risk manager in a year is $87,716. The average total of base salary a risk manager may earn ranges between $57k to $130k while they could expect bonuses ranging from $2k to $25k. The profit-sharing averagely ranges from $967 to $18k while the commission is between $0 to $14k. As for the total pay, a risk manager may receive an average of $55k to $144k.
Several locations in US pay a higher salary for the risk managers. For example, risk managers based in New York, New York may earn approximately 27.5% more than the national average salary.
- Pay by Experience level
In terms of pay by experience level, it could be further segregated into five categories which are entry level, early career, mid career, late career, and experienced. For entry level, those with less than 1 year of experience, may earn an average total of $64k. A risk manager with 1 to 4 years of experience, also known as an early career, may earn an average total compensation of %$77k. Mid career, on the other hand, refers to the risk manager with 5 until 9 years of experience. Those under this category may expect to earn an average total of $91k. As for those with 10 until 19 years of experience, also known as late career, they may earn an average total of $97k. The experienced category, which refers to risk managers with more than 20 years of experience, may receive an average total of $99k. Chicago, Illinois is another location that offers a higher pay rate, which is 15% higher than the normal national average earnings. Risk managers working in Houston, Texas earn an average total of 13% higher than the national average. Another example is Dallas, Texas which pays 11% higher. As for lower salaries than the national average, several examples include Atlanta, Georgia, and Phoenix, Arizona which are 4% lower. Another example is Minneapolis, Minnesota which is 5% lower than the national average.
Certifications for Risk Manager
Aside from holding a bachelor’s degree or Master’s degree in a related field, it is recommended to attain necessary certifications to boost up your career especially in securing better chances of being hired or to advance further in the field. Some certifications these days are offered online or even in physical settings.
These are several examples of certifications that you may consider if you are a risk manager or planning to become one:
- Certified Risk Manager (CRM)
- Professional Risk Manager (PRM)
- Certified Risk Analyst (CRA)
- Associate in Risk Management Credential
- Certification in Risk Management Assurance (CRMA)
- Financial Risk Manager (FRM)
- Certified in Risk and Information Systems Control (CRISC)
- Certified Risk Management Professional (CRMP)
- Associated Risk Management Professional (ARMP)
- Certified Business Continuity Professional (CBCP)
- Certified Construction Industry Financial Professional (CCIFP)
- Certified Information Systems Auditor (CISA®)
- Certified in the Governance of Enterprise IT (CGEIT®)
- Certified Regulatory and Compliance Professional (CRCP)
- Enterprise Risk Management Certified Professional (ERMCP)
Several other certifications may also be considered especially those that are highly related to the industry you are working for.
Tools and Software for Risk Manager
In managing risks, there are loads of tools and software that could be utilized. In terms of tools, risk managers could adopt risk assessment as well as management tools and techniques. Qualitative and quantitative risk assessment are examples of tools that could be adopted in managing risks, which could be performed physically or digitally. The examples include SWOT analysis, team discussion, root cause analysis, probability and impact matrix, historical data analysis. Some of the most common risk management tools in the market are SpiraPlan, A1 Tracker, Risk Management Studio, Isometrix, Analytica, Active Risk Manager, Project Manager, GRC Cloud, Isolocity, Enablon, CheckIt, and iTrak.
These tools and software help to ease a risk manager’s tasks in terms of detecting bugs, issues, and malfunctions in real-time. Other features include summarising risks or reporting, as well as notifying the risks automatically. These software are mostly equipped with cloud-based storage features hence it could ensure that data and information are well kept and accessibility could be customized to the appropriate level and personnel.
Risk Manager Education and Career Requirements
Generally, a risk manager should hold at least a bachelor’s degree. The most common field or majors taken are business, management, business administration, finance, computer science, economics, accounting. However, different companies or organizations may seek candidates with the qualification of the related field and industry. These are several examples of universities that offer relevant courses for a risk manager job; University of Pennsylvania, Temple University, Boston University, University of Iowa, Western Governors University, Florida State University, and University of Central Florida.
To become risk managers, they should be equipped with in-depth knowledge and skills in the industry. Having extensive experience and training or certifications is another factor qualifying you to become a risk manager. In most cases, before being promoted or moving into a manager role, most risk managers started their careers as risk assistants or risk analysts. It is quite impossible to become a risk manager directly upon graduation. You must be equipped with a minimum of five years of experience in finance, business, or other related field. If you intend to apply for a risk manager title, you may consider this sequence which is earning degrees, going for an internship, attaining sufficient and relevant experience, and obtaining certification or license.
