Is a Risk Management Career Right for You?
Do you have a passion for math, statistics, and finance? Are you someone who enjoys solving problems and thinking critically? If your answer is yes, then a career in risk management might be the perfect path for you.
In this blog post, we provide you with a thorough understanding of risk management, covering essential topics such as career options, required skills, and educational qualifications. By the end of this article, you will have a clear idea of whether a career in risk management is the right fit for your goals.
I. What is Risk Management?
What Type of Risk do Businesses Face?
Risk management entails identifying, assessing, and mitigating risks. It’s a strategy for managing uncertainty and minimizing possible damages to a business or organization.
Companies and organizations face various risks in the constantly changing business world that can impact their operations and success. According to Investopedia, there are four common types of business risks. This includes strategic, compliance, operation, and reputational risk.
1. Strategic risk: involves the big decisions a company makes to achieve its long-term goals.
2. Compliance: focuses on adhering to rules and regulations to avoid legal or ethical issues.
3. Operational risk: centers on maintaining smooth daily operations and preventing disruptions.
4. Reputational risk: concerns how the public and stakeholders perceive a company.
Why is Managing Business Risk Necessary?
The need for a specialized team dedicated to assessing and managing risk has grown over time and with good cause. This is because these professionals are not just protectors of a company’s future but also the drivers of its success.
For example, the Coronavirus (COVID-19) pandemic has significantly impacted businesses worldwide. The outbreak brought unprecedented uncertainties, disrupted supply chains, and caused economic instability, considerably increasing business risk. According to a 2020 survey conducted by Gartner, Inc., only 12 percent of 1,500 participants believed their company was prepared for the pandemic.
“Many businesses are managing risk in an old-fashioned and inefficient way,” said Matt Shinkman, Gartner’s Vice President of Risk and Audit. Low assurance levels show this.
In the face of the pandemic impacting global businesses, companies must reevaluate their risk management approaches. Readiness for future risks is vital as there could be more crises and unpredictability ahead.
II. Careers in risk management
A career in risk management can open opportunities in a wide range of industries, as virtually every organization faces some risk that needs to be identified, assessed, and managed. Here are some industries where risk management plays a crucial role:
1. Finance and Banking
2. Insurance
3. Healthcare
4. Technology
5. Real Estate
6. Government and Public Sector
7. Pharmaceuticals and Healthcare
These are just a few examples, and the demand for risk management professionals exists in many other industries. The specific skills and focus areas within risk management may vary depending on the industry and organization you choose to work in.
Career Levels
Many exciting career paths are available in risk control and assessment. The Institute of Risk Management has created a classification system with four levels: leadership, senior, management, and support. These job titles and levels may vary from one organization to another.
I. Leadership Level
At the leadership level, professionals are expected to have extensive expertise in risk management. Job titles may include
- Chief Risk Officer
- Director of Risk Management
- Head of Risk Management
- Director/Consultant
- Partner/Consultant
II. Senior Level
Professionals at the senior level possess advanced knowledge and experience in risk management. Job titles may include
- Risk Manager
- Senior Risk
- Consultant Senior
- Risk Analyst
III. Management Level
At the management level, individuals have a comprehensive understanding of risk management concepts. Job titles may include
- Risk Management Executive
- Risk Management Officer
- Risk Management Adviser
- Risk Analyst
IV. Support Level
Professionals at the support level typically have basic knowledge and experience in risk management. Job titles may include
- Risk Management Assistant
- Risk Management Officer
- Risk Analyst
Please note that this list of professions is not all-encompassing. Individuals can explore various related career paths, including but not limited to commercial underwriting, claims and brokerage, actuarial roles, and more.
III. How to start a career in risk management
Educational Pathways
A career in risk management typically starts with a bachelor’s degree in fields such as business, finance, or related disciplines.
To advance your expertise and stand out in this field, colleges and universities, such as St. John’s University, offer a comprehensive Master of Science degree in Risk Management and Risk Analytics, providing specialized knowledge and skills tailored to the demands of the industry. Additionally, various other relevant degrees and certifications can pave the way for a successful career in risk management.
Factors to Consider
Before embarking on a career in risk management, it is crucial to meticulously weigh the following factors to ensure this career path aligns with your aspirations and abilities:
- Interest in Problem-Solving: Risk managers are often tasked with finding solutions to complex challenges.
- Analytical Mindset: A keen analytical mindset is essential for evaluating data and making informed decisions.
- Stress Tolerance: The role can be demanding, especially when addressing critical issues.
- Communication Skills: Communication is crucial when conveying risks and solutions to stakeholders.
Discover Your Path in Risk Management
Are you intrigued by risk management and seeking career success? Explore St. John’s University’s Risk Management and Risk Analytics master’s program. Benefit from personalized career guidance, networking opportunities, and access to the Ellen Thrower Center for Apprenticeship and Career Services, which is dedicated to helping students in risk, insurance, and actuarial science programs connect with internships and jobs.
