Though few people know what risk managers are, these professionals are essential players responsible for keeping a business on its feet and bringing in profits. Risk management professionals are financial managers that use specific training, skills and experience to identify possible risks that could result in lower cash flow and higher insurance rates for the business. These specialists assess risks and implement plans and strategies to minimize business losses. Lowering loss also lowers the cost of insurance, resulting in greater revenue flow for the business.
Risk managers are found working for a wide variety of business and organizations, though as of late, many are found primarily in the banking and financial sector. Specialists working in these organizations are largely concerned with discovering and eliminating fraudulent activities, which could put the business’s reputation and success in jeopardy.
Risk managers perform a number of different job operations, but all with the purpose of minimizing possible risks or losses for the businesses they serve. These losses include property, personnel, or cash flow. Risk managers are responsible for identifying and dealing with any issues that may arise related to insurance or safety, which, if overlooked, could result in litigation.
In order to accomplish the goal of lowering risks, specialists must constantly be thinking about the inner workings of the business, analyzing areas that could pose a risk, and then taking steps to reduce or eliminate those risks.
Assessing and handling risk is conducted in a number of ways. Risk managers can be found inspecting work conditions, reading code and legal requirements, surveying clients, and searching for any conditions where liability could occur. In order to discover possible risk, these specialists must also have the ability to set up various scenarios and decide which ones could prove to be a risk to the company’s assets - both human and otherwise.
Once risks are discovered, it is the responsibility of the specialist to compile data and information into streamlined reports with graphs and statistics to support findings. These reports are then presented to leadership within the company. In addition to presenting risk reports, the risk management professional is required to develop plans or policies that will reduce, avoid, or eliminate liabilities and losses within the company. Risk management professionals are then responsible for the implementation and enforcement of the plans and policies developed. These plans may include a number of different strategies such as the release or movement of employees who pose a problem, development of safety and work regulations, and updating of different procedures based on the latest laws and legislation.
Due to the nature of the job, risk managers may be called on to do everything from filing workers comp claims to negotiating with unions over workers' pay and working conditions. Many risk managers are also found in the finance department analyzing reports and cash flow information to ensure no fraudulent activities are taking place.
A career in risk management requires extensive training and education and is not considered an entry-level job. Typically, risk management professionals have a minimum of a bachelor’s degree in business, administration, finance, or other related field. Many in the risk management field actually have a master’s degree as well, which serves as an asset in their profession. Companies often require a minimum of five to seven years of experience in an insurance or legal office that deals with legal claims.
Throughout their careers, risk management professionals will have to attend trainings and developmental classes to say abreast of current issues and latest practices, keeping them relevant in the field.
Risk managers must have the ability to develop and organize plans of action, be willing and ready to consult with employees, clients, and other stakeholders to discover and devise scenarios that could pose risks to a company. In order to accomplish this, solid organization, communication, and management skills are a must. Additionally, risk management requires mathematical, analytical, and critical thinking skills.
Risk managers must be interested in personal development, as they must keep themselves knowledgeable about current legislation that could potentially impact the organization in which they are working.
Overall, risk management is a highly specialized field requiring experienced and well-seasoned professionals. The job holds a great deal of intrinsic value as it is directly linked to the success of a business. However, it does rank relatively high in terms or stress and expertise needed.
Generally, risk managers work in a designated location or office within a business set of offices, often near human resources. Generally, all insurance and claims run through the risk management office. Aside from the office, a risk manager’s workplace is also in the field. This includes showing up at job sites to assess possible risks, presenting information in conference rooms, and going out into the community to survey clients and other stakeholders.