What is risk management, and how can recent graduates and career changers pursue a career in the field? As Bloomberg recently reported, young professionals didn't traditionally aspire to a career in risk management, but in the post-COVID landscape, risk management is becoming an in-demand career choice as companies focus on quantifying and mitigating risks in today's environment.
Whether professionals are launching their careers or looking for a more diversified role that offers greater challenges, risk management can be a rewarding and engaging career path. Here's a closer look at what risk professionals do and what to expect from a career in the field.
What is Risk Management in Today's Landscape?
The field of risk management is transforming, and McKinsey reports that the next few years in risk management will be more transformative than previous decades.
Risk managers play a variety of roles within organizations, helping businesses to identify, address and mitigate different threats. One of the most common roles is financial risk manager. The duties of these roles focus on modelling various kinds of risk, assessing how changes in financial markets, regulations and other factors might affect the institution, and ensuring that companies don't over-extend their credit obligations beyond what they can deliver. These are just a few ways risk managers work with companies to improve operations and ensure better business outcomes.
There's a host of other specialized jobs within risk as well, including credit and operational risk. The field has diversified in recent years to include opportunities in emerging areas such as cybersecurity and climate change risk. All risk managers help to anticipate and eliminate the threat of different risks so companies can stay focused on their larger missions. As Bloomberg notes, risk management roles mainly interact with finance and legal but often have visibility up to the C-suite and Board levels.
What to Expect from a Career in Risk Management
A career in risk management can allow a professional to have a significant impact on their organization. The risk management field is fast-growing, and the work offers a range of benefits.
Variety of Industries
The GARP Risk Careers Survey 2021 report shows the many different areas of the financial system in which financial risk managers work. Over 25% of the individuals who responded, worked in commercial banking. There was also significant representation from consulting, asset and investment management, insurance, and investment banking. Responses came from industries as diverse as travel, metals and mining, and IT.
No matter what professional interests are driving your career decisions, there is likely an intersection between risk management and the field in which you'd like to be working. Risk management is also a field that can allow professionals to be versatile in their career paths, as it includes many areas of specialization, from audit to technology risk to climate risk.
Strong Compensation
According to Salary.com, the median compensation for a risk manager in the United States is over $100,000. Risk managers across the globe can also grow into increasingly lucrative opportunities, with 35% of respondents to the GARP Risk Careers Survey reporting total annual compensation between $100,000 and $1.5 million. In addition, there is potential for ongoing raises, as 53% of survey respondents had a salary increase equal to 1-10% of their salary in the last year, while 16% had an increase larger than 10%.
Making an Impact
Another benefit of a career in risk management is the potential to make a positive impact on the organizations with which you work. In risk management, professionals face challenges that can completely hamstring a company and hinder its ability to grow, adapt, and serve customers. Risk managers can identify these risks, prevent them from occurring, or mitigate their impact, empowering their organizations to stay on track and meet their goals.
Career Satisfaction
One critical measure in determining whether a career path would be a smart choice is the level of satisfaction that long-time professionals show. In the GARP survey, 84% of respondents were very likely or likely to recommend career opportunities in the risk management space to others.
Ongoing Education and Professional Development
Lifelong learners enjoy the ongoing education and professional development opportunities that come with a career in risk management. In addition to staying abreast of new trends, programs such as the Financial Risk Manager (FRM®) certification allow candidates to develop technical skills and build their knowledge.
For professionals considering career options, risk management can offer opportunities beyond traditional paths in finance and accounting. From helping organizations navigate the new challenges they face to applying skills in broader, high-impact initiatives, risk management is a field that can provide a range of fulfilling work experiences. Whether professionals are looking to start a career or make a career change, risk management can be a lucrative path, and the work can make a significant difference.
To learn more about the risk industry today and discover where the trending opportunities are, read the full GARP Risk Careers Survey.
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