37% of organizations across the globe faced disruptions to their business operations which impacted their supply chain processes caused by other vulnerabilities in the last year. This leads to impacting the finances and disrupting the operations in companies. Considering the high level of impact that organizations face because of risks, they need to take precautionary measures to prevent them from happening again (or make sure they don’t occur in the first place). Risk management is a field that helps companies properly evaluate, assess, monitor, and mitigate their risks.
Risk management has grown in demand. Organizations are adopting various risk management policies, principles, and strategies to ensure their valuable assets are safeguarded and maintain all their regulatory compliance requirements. A survey conducted by Project Management Institute stated that 27% of companies always use risk management strategies in their project, whereas 35% of organizations use them often. This growing demand for applicable risk management has given rise to the position of a risk manager in popularity.
This article addresses what a risk manager is, the skills required to become a successful risk manager, their roles and responsibilities, salary trends of risk managers, and more.
Table of Contents
Who is a Risk Manager?
A risk manager is, in short, someone who is in charge of managing risks. This entails several factors. He can be responsible for managing organizational and business risk, as well as project risk. Management of risks for an organization can include a variety of different activities for companies. These can include managing a team of risk professionals responsible for assessing risks to an organization, understanding the company’s risk appetite, and coming up with different solutions and strategies to solve issues.
Risk managers need to have a background in working in the management position as well as an undergraduate degree. Depending on the industry they are working for, they need to be experts in their field. Although not necessary, it is highly recommended that the risk managers complete a certification in risk management or a PMP Certification in US to gain more expertise in the field and manage their work more efficiently.
Skills Required by a Risk Manager
Risk managers need to develop several technical as well as soft skills for their job role. The technical expertise can be obtained by completing various certifications in IT security and governance and risk management, along with their educational background. Some of the skills required for a risk manager to possess are:
- An undergraduate or a graduate degree in the field of management, business studies, risk management, law, finance, statistics, or engineering
- Strong communication skills
- Work experience as a project manager
- Leadership skills
- Presentation skills
- Analytical skills
- Attention to detail
- Collaboration skills
- Technological skills
- Thorough knowledge of MS Office
- A clear understanding of the organization’s business goals
- Work experience with handling and managing risks
- Research skills
- Knowledge about compliance, laws, and regulations
- Expertise in how to handle sensitive information
- Team management skills
- The ability to adapt to changing situations
- Can work under stressful situations
- Adaptable in nature
- Strategy building and execution skills
Roles and Responsibilities of a Risk Manager
The job role of a risk manager has many responsibilities. Some of the aspects of the company that a risk manager is considered to be responsible for are:
- Creating accurate assessments of risk to the project or the organization as a whole
- Developing an end-to-end risk management strategy and executing it
- Creating reports to assess the impact of the risk if it occurs
- Understanding and evaluating different risks
- Managing the organization’s risk appetite
- Creating budgets and financial plans in accordance with the risk appetite and risk assessment for the company
- Creating regular risk reports for the company and stakeholders
- Explaining the different types of risks and vulnerabilities to different stakeholders
- Working alongside the insurance team to develop a risk management plan
- Creating a detailed plan to ensure business continuity in case of risks occurring
- Implementing all the safety measures across the enterprise to minimize risks. This can include safety measures to ensure the physical safety of all the assets and resources of the company, as well as safety measures to ensure the safety of all the digital and on-cloud assets of the organization
- Ensuring the organization maintains its regulatory compliance in all aspects to prevent losses to the company in the form of fines
- Working with the audit team and creating regular compliance reports
- Keeping records of all risk management processes and policies in the organization
- Implementing all risk management strategies in a project or across the enterprise and regularly updating them to keep the strategies relevant
- Creating risk awareness among all the team members in a project as well as across all members of the organization
- Troubleshooting any issues and resolving them in the most efficient way possible
- Working with teams to eliminate all types of liabilities to the company
Salary Trends
The average salary for a risk manager is stated to be upwards of $115,047 every year. If risk managers become certified, they stand a chance to get an increment on their pay and move up and advance on their career opportunities.
Companies Hiring Risk Manager
Some of the industries that require the role of a risk manager to implement and execute risk management strategies are:
- Healthcare industry
- Payment card industry data security standard, or the PCI-DSS industry
- Energies and utility industry
- Banking industry
- Finance industry
- Asset management
- IT industry
- Software development
- Transportation industry
- Securities industry
- Cybersecurity industry
The industries mentioned above have the absolute necessity of risk management strategies. Many other areas and industries have companies requiring an efficient risk manager such as retail, advertising, marketing, digital currencies, and more. Any organization that works with any form of risk should ideally work towards developing a risk management strategy.
Suppose companies cannot work with full-time risk managers. In that case, they can also hire risk managers on a project basis periodically to make sure all their operations and systems are compliant and the strategies they have in place are worthy.
Final Thoughts
A risk manager is someone responsible for making sure the company is compliant and safe in terms of both internal and external threats. This is a big responsibility, which is why organizations opt for trained professionals with expertise and experience to manage their risks.
Certifications in risk management and governance can help working professionals upskill themselves and create more work opportunities. For organizations, a risk management certification can provide the assurance they need to ensure that all their processes, projects, applications, and systems remain safe against any and all types of risks.
