Risk can mean a lot of things to a company. Risks lead to increased costs, such as in the case of insurance companies and customers with preexisting conditions. Other risks can lead to injury and death, such as in the case of mining and manufacturing industries. There are also risks that can tarnish the reputation of a company, such as in the case of procedures that might be viewed as unethical. In order to prevent these risks, many companies hire risk management officers, also called actuaries.
Risk managers determine potential risks in an organization and then develop appropriate responses to these risks, such as standardized policies and procedures. They are also responsible for helping other members of the organization become aware of these risks, creating training programs so that employees are taught to manage these risks. They also provide employees with resources that will help them manage these risks. Risk management officers are often responsible for motivating employees to implement new policies and procedures, according to Texas A&M University. Many risk managers work with writing teams to create and update company operations manuals.
The educational requirements for a risk manager vary depending on the nature of the company, though many risk managers have bachelor’s degrees in finances, economics, business management and mathematics. Knowledge of finances are useful, given that risk management is often concerned with costs.
When risk managers come to a company, this company likely has a variety of policies and procedures already in place that the risk management officer must become aware of to incorporate them into new policies or to change them. Risk managers must have excellent communication skills to effectively explain to other members of the organization sophisticated solutions to problems. Conflict management skills are helpful when risk managers have to help resolve conflicts between different members of the organization or between the organization and those outside the organization. Analytical skills and problem solving skills are needed to identify potential risks and come up with appropriate responses. Creativity and flexibility are also strongly needed, according to Texas A&M University.
The need for risk management officers is expected to grow by 21 percent between 2008 and 2018, according to the Bureau of Labor Statistics. This growth is driven by health care companies that are becoming increasingly more interested in managing risk due to health care regulations.
The median earnings for risk managers in 2008 were $84,810, according to the Bureau of Labor Statistics. The highest 10 percent earned more than $160,780, while the lowest 10 percent earned less than $49,150.
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