What Risk Management Professionals Do
Risk management professionals are vital in many industries, as they help organizations identify and analyze risks across a wide breadth of areas. In some cases, they may look into a single area, such as finance, assets, technology, compliance, or operational risks. However, risk management professionals in smaller organizations may be expected to oversee all aspects of the company’s risk. In addition to detecting and assessing risks, they may also oversee the company’s risk management policies and processes, while making recommendations when deficiencies are detected.
Who would enjoy a career in Risk & Compliance (Governance)?
Highly analytical people do best in the career. It’s a good field for individuals who enjoy research and looking for patterns, especially for those with a background in business who understand a specific industry’s legal compliance obligations and best practices. Natural leaders with effective communication skills excel, as risk management professionals are expected to be forthcoming regarding findings, as well as adept at proposing solutions.
Who mightn't like the career?
The field isn’t a good fit for people who don’t enjoy detective work and those who need lots of physical activity. Because risk management professionals sometimes have to deliver bad news to superiors, including intentional wrongdoings by employees, it can be a difficult career for those who lack moral fortitude or become emotionally invested in outcomes. Lastly, the number of hours worked can skyrocket from time to time, so it can be challenging for people who need reliable and steady schedules and for those who are inflexible.
A bachelor’s degree in risk management or related area is generally the minimum requirement. Certifications in a specific division of risk management can help an individual land a job and earn a higher salary.
Those starting their careers may improve their odds by applying at larger organizations that will allow them to gain experience and work their way up.
- Operational Risk Interview Questions
- Enterprise Risk Management Interview Questions
- Interview Preparation Tips for Risk & Compliance Professionals
Moving into Risk & Compliance (Governance) from another career
Individuals with business, legal, finance, and technology backgrounds have an easier time transitioning, as the skills required in a risk role are often similar to those developed in those areas. For further reading on how to transition, see “How can I get into Enterprise Risk Management (ERM)?”
Role: Those entering the profession usually begin as a risk analyst and work under the direction of senior risk management professionals. Analysts are typically tasked with gathering data and compiling reports, though they may be entrusted with low-level audits and some analysis.
Role: Risk managers handle audits to ensure protocol is being followed. They also make suggestions to correct issues when they are detected.
Risk Control Supervisor
Role: Risk control supervisors analyze a business’ processes to determine what will decrease risks, and then create strategies to help the organization implement changes. They may also handle training of employees in regard to managing/ reducing risk.
Risk Management Director
Role: Risk management directors oversee a company’s policies as they relate to risk management and ensure compliance with all laws. They stay current on all industry and legal changes in order to ensure the company is following the latest protocol. Moreover, they oversee budgets and aspects of business planning, and implement changes strategically as needed.
Chief Risk Officer
Role: CROs tend to be more hands on with department heads, ensuring each department in their assigned region are following proper protocol. They make calculated and strategic decisions about which risks are worth taking to boost profits and make sure department heads are taking the necessary steps to minimize risks. Their role may extend to cover aspects not included by other risk management professionals within the company, such as reputation, and they also examine the market as a whole when making decisions.
Directors and CROs may travel extensively throughout the territory the company expects them to cover.
Risk Analyst: According to PayScale, average wages for risk analysts are USD$63,000 in America, ₤34,000 in the United Kingdom, CAD$61,000 in Canada, and AU$71,000 in Australia.
Risk Manager: USD$88,000, £50,054, and CAD$58,300, AU$59,550.
Risk Control Supervisor: USD$97,000, £31,200, and CAD$77,948. No salary data is available for Australia.
Director of Risk Management: USD$124,000, £101,130, and CAD$134,716. No salary data is available for Australia.
Chief Risk Officer: USD$153,000, £127,652, and AU$190,000. No salary data is available for Canada.
Bonuses and profit sharing combined can add as much as one-fourth of a risk management professional’s base pay to the top of his regular earnings at lower levels, whereas the salaries of executive staff may double with the added pay.
Why Risk Management Professionals move on
The number of hours needed at times and the overall pressure to produce results can cause risk management professionals to burn out. Exit opportunities vary based on one’s degree path or the area of risk the professional specialises in, be it financial, operations or legal.