Risk Management Careers—Important at Every Company, from American Red Cross to Zappos
Risk management requires constant critical and creative thinking, and just like chess, it forces you to think several moves ahead.
To Kathleen Crowe, risk management is a lot like playing chess with a grandmaster.
It requires constant critical and creative thinking, and just like chess, it forces you to think several moves ahead.
“It’s like playing a game, and being better means you’re able to think ahead about things that could happen versus things that already have,” says Crowe, a global insurance analyst at AES Corporation, an international power generation and utility company.
The key difference is that in risk management, there isn’t a finite amount of moves to master—new risks and new situations arise every single day. It may sound stressful at first, but Crowe thinks that this ever-changing environment makes for one of the most dynamic careers out there.
“The types of things that you touch, and the projects you work on, and the things you are engaged in on any given day are totally all over the charts,” she said, “and I think that’s great for people like me — I would get bored super easily if I did the same thing every day.”
Risk management is also one of the fastest-growing careers out there — opportunities are available in industries like sports, retail, finance, restaurant, hospitality and insurance. Risk management requires a skill set that companies in every field need on a daily basis.
Risk managers’ duties vary by company, but essentially, it’s their job to look at any issues that can affect the company’s status quo, for better or worse. Certainly, that means assessing all potential threats, but those analyses often uncover opportunities for improvement. Risk management isn’t just avoiding doing the wrong things; it’s also finding ways to do the right things that give organizations a competitive advantage.
And risk management is great for those people who dread sitting in front of a computer all day long! Risk managers are often out in the field, visiting job sites and facilities to assess risk and presenting findings and recommendations to clients and stakeholders.
“The way you have to think critically and think outside the box to be a risk manager is appealing to those types of people who don’t like to sit in the background and nod their head,” Crowe says. “Risk management allows for people to ask those questions like, ‘Why are we doing it this way?’ ‘How can we improve on this?’ and ‘What are we missing?’ Then we say, ‘Let’s figure this out and talk through it to find a better alternative to what we are doing.’”
Those types of skills are needed by practically every company. To get an idea of how universally useful risk management is, consider this sampling of companies that sent their risk managers to the 2015 Risk and Insurance Management Society Annual Conference & Exhibition, the signature gathering for people in the risk management industry: American Red Cross, Barnes & Noble, Coca-Cola, Dell, Express, Five Guys Burgers and Fries, Google, Hyatt Hotels, IBM, JPMorgan Chase, Kraft Foods, LEGO, McDonald’s, Nike, Ocean Spray Cranberries, Ralph Lauren, Qualcomm, Red Bull, Starz Entertainment, Twitter, Uber, Volkswagen, Disney, Xylem, Yahoo! and Zappos.com.
It’s no wonder that risk management careers are rapidly growing. According to PayScale, the field should grow by 12 percent over the next 10 years. And that demand means ample compensation. The typical insurance risk manager earns an average of around $80,000 a year in salary and a total compensation of $110,000, according to National Underwriter P&C’s 2015 Risk Manager Compensation Survey. However, they can earn up to nearly $200,000 a year depending on experience and job responsibilities. The more specialized a person’s skills are and the more professional designations he or she has, the higher the earning potential. All that makes risk manager director one of CNN Money’s 50 Best Jobs in America.
Getting into the industry often requires a certain amount of undergraduate education, and advancing within it may require earning designations, like the Associate in Risk Management (ARM™) designation. The job of a risk manager doesn’t require a specific area of undergraduate study — Crowe initially studied political science and Mandarin Chinese — but it does require some serious critical thinking.
“One thing that really is your best asset is the ability to innovate and think ahead,” Crowe says. “The millennial mentality tends to be very creative, so we actually have the ability to influence the market and bring new ideas that a lot of people, perhaps, haven’t thought of in the past.”