Careers in Risk Management
Inherent in every opportunity, every plan, and every project, there is a quantifiable measure of risk. As defined by the International Organization for Standardization, risk is “the effect of uncertainty on objectives,” a definition which has very meaningful implications for businesses. Every company, whether it is a petroleum logistics company, an investment banking firm, or a government research plant, wants to know as much as it can about the possible outcomes — positive and negative — of a venture, to mitigate the risk of disaster, malfunction, or other failure.
To help identify, assess, and prioritize risk factors in their projects, companies rely on the expertise of risk management professionals. Given a budget and access to resources, risk management experts determine high-risk phases of a project and direct resources to minimize the impact of negative events or, if possible, avoid them altogether. No industry and no project is immune to risk and uncertainty, so risk management services will always be in high demand, especially in industries that deal in complex or highly volatile environments, such as the stock market.
Professionals working in risk management can earn an annual salary anywhere between $45,000 and over $100,000, U.S. Bureau of Labor Statistics (BLS), depending on their level of responsibility and the cost of a project. The potentially high pay and high demand of positions, however, makes job outlook in risk management fiercely competitive and, according to the BLS, so job growth in the field is predicted to be slower than the average for all occupations over the next 10 years. Keep in mind, however, that salary and projections not guaranteed because they can vary depending on your employer and region.
Required Education for Risk Management
To be qualified for work in risk management, professionals usually have at least a bachelor’s degree in business administration, with a concentration in risk management, though some have gone on to get MBAs with the same concentration. Most professionals in the field act as consultants or analysts, so a broad understanding of the influences and impacts of adverse events on a business is required. This understanding is usually developed by taking courses in accounting, budgeting, finance, loss prevention, project management, and logistics.
What will be most valuable, however, is real-world experience, which many classes will try to simulate with test cases. Students should seek out internships, however, to supplement their education, and to get first-hand experience with managing and predicting risk.