What Does a Risk Manager Do? (And How to Become One)
By Indeed Editorial Team
Updated July 19, 2022 | Published May 8, 2022
Updated July 19, 2022
Published May 8, 2022
The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.
People who work in risk management can identify, assess, and prioritize risks for a wide variety of businesses. These professionals protect company assets and public interests by ensuring that policies and procedures comply with regulations and standards in ethics. Understanding this industry and the responsibilities of a risk manager can help you consider if this career is a good fit for you. In this article, we discuss what a risk manager does, what risk management is, its importance, how to become a risk manager, their relevant skills, and their typical work environment.
What does a risk manager do?
Knowing the answer to "What does a risk manager do?" can help you understand why they're essential to preserve and protect a company's assets. Their duties and responsibilities usually vary depending on their employer, but typically, they can handle all risks that can threaten a company's security, reputation, finances, or business operations.
To understand a risk managers role within an organization, it's important to consider the four sectors they work in, including:
In security, risk managers work to eliminate the risk of a data breach and protect company information. Risk managers may conduct frequent tests to ensure businesses are protecting company data and consult with security professionals to improve current security measures. They may revisit security plans frequently to ensure they are up to date to protect against growing cyber threats and other potential harm such as viruses, bugs, and malware.
Risk managers frequently work with public relations departments to forecast potential harm to business reputation. As a risk manager, your role may require you to research new trends constantly that may affect the business and ensure the company has a plan to reflect them positively. They work to establish contingency plans in case an event negatively reflects the business in the public media and brainstorm ways to prevent this event from happening.
Financial data is one of the most tightly secured information businesses can hold. Risk managers work to protect this data and implement detailed plans to reduce the risk of threat. They look closely at who has access to information and the security of financial systems and work alongside financial managers to ensure all aspects are secure.
Risk managers work closely with operations managers to forecast any threats to operations. They monitor and track machinery usage, maintenance schedules and vendor negotiations to ensure operations remain constant. They work to create contingency plans in the event operations cease and monitor all aspects of the operations process.
What is risk management?
Risk management focuses on compliance and strategy. People in risk management roles help identify and assess factors that can contribute to risk or liability for a company or organization. Risk at the organizational level usually pertains to finances, strategy, operations, information technology, and reputation. Liability relates to governmental policy, regulation, and law. Certain risk management and compliance careers involve advising on recovery action and developing risk management tools and plans for the future.
Why is risk management important?
Managing risk and compliance is crucial for businesses and companies because it allows for preparation and provides security. Thorough risk management plans, tools, and systems can protect a company's profits, investments, and overall social standing. Here is a list of four actions people in risk management roles can develop within an organization:
In-depth analysis: Risk managers provide a comprehensive review of proposals and projects and evaluate and report on benefits and any potential drawbacks before a project starts. These reports help companies make informed decisions about implementation.
Proactive plans: People in these roles often create response plans before adverse events. They study the likelihood of certain events and enforce policy and procedure so an organization can be ready in an emergency.
Diligent study: Risk and compliance professionals can carefully examine corporate law. They know and understand the industry-relevant laws and bylaws and ensure that companies can operate with confidence.
Broad consumer knowledge: Risk managers study market trends and consumer buying demands. They report on this information and advise on policy and strategy so companies can connect with their clients and maintain a positive reputation.
How to become a risk manager
To get a role as a risk manager in Canada, consider following these steps:
1. Get a bachelor's degree
To work as a risk manager in Canada, you can start by obtaining a bachelor's degree in risk management. Most companies require a bachelor's level of education, but some may require a master's level of education. You can achieve a basic bachelor's degree in risk management in three to four years, while a master's degree can take upward of six years to complete.
2. Gain relevant experience
Risk managers typically have experience in the industry they're looking to work in outside of risk management. If you desire to work in a specific industry, consider applying to roles in that industry while you work to gain your education. As a risk manager, your position may require you to know all aspects of the company and the risks present. A diverse resume with experience in different departments can help you highlight your expertise in risk management.
3. Work towards a professional designation
Many organizations require risk managers to hold a professional designation in risk management. In Canada, most risk managers have a Certified Risk Management Professional (CRMP) designation. This designation can validate your knowledge, performance and commitment to mitigating risk.
Skills of a risk manager
To succeed as a risk manager, the following skills may be useful:
As a risk manager, your role may include working across various departments and for multiple teams. Effective communication skills can help you communicate all your concerns and ideas while working with different professionals. Risk managers frequently report their findings to senior management and executive teams, and having strong communication skills can help you clearly articulate your findings.
Strong organizational skills can allow you to handle multiple tasks simultaneously while remaining efficient. Risk managers are frequently working on several risk aspects simultaneously. You might work in different departments while balancing multiple projects.
A large proponent of risk management involves finding creative solutions to mitigate risks. Being receptive and creative can help you think of innovative solutions to common business risks and prevent them from happening. Brainstorming ideas, potential risks, and creative solutions are key to effective risk management.
As a risk manager, your role may involve having a team of subordinates who report to you. Especially in larger organizations, the risks may be too large for one person to manage. Having strong leadership skills can help you guide and manage those working on your team. Leadership skills such as compassion, understanding, and patience can help your team succeed in their roles in identifying and solving risks.
As a risk manager, your role may require basic math skills to develop several activities, such as running tests, monitoring operations, and tracking the success of solutions. These activities may provide you with findings that may require some basic math to help you interpret them. Your role may also require you to summarize your findings and compile numbers prior to presenting them to the upper management.
Many risk management roles require the compiling of data for interpretation. As a risk manager, your role may require doing a risk analysis, which involves collecting data and drawing conclusions. Strong analytical skills can allow you to make accurate predictions, present strong conclusions, and offer suggestions. Your analytical skills may help you explain quantitative information to your team and the upper management.
Work environment of a risk manager
Risk management jobs exist in almost every industry, and the exact work environment can vary across sectors. Risk managers typically work in an office setting, and businesses provide a desk or cubical to perform your role. Most risk managers can expect to work in teams as they solve problems across various departments. There are two working styles of risk managers, including:
Risk managers specializing in small businesses may work with several companies simultaneously. Risk management firms typically hire multiple risk managers and outsource them across their portfolio of clients. Working in this type of environment can be rewarding as you get to experience many types of businesses and work to solve unique types of challenges. This type of environment can involve more research processes as you work to understand new businesses and challenges but allows you flexibility in the clients you wish to undertake.
Large businesses typically have teams of risk managers that work exclusively for their company to solve risks and manage potential problems. In this type of environment, you become an expert at the systems and operations of one business to forecast additional issues. Much of this type of work involves the testing and process checks of existing systems and procedures to ensure they are compliant.
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