Look at any job listings within the business sector and the title of risk management specialist is sure to come up a few times. In fact, it might be one of the most popular positions listed among those available today. With so many risk management jobs open and looking for qualified candidates, those new to the position might wonder exactly what this job entails and whether or not it’s the best fit for their interests, experiences, and educational pursuits. Risk management takes a very specific kind of person to do a very intricate kind of work, so this is actually a pretty valid concern. Before making a move into this field, consider what the job involves and how it can benefit the typical business.
The Search for Risk: A Key Part of the Job for Risk Management Specialists
Businesses are inherently exposed to risk every day, but that risk comes in all kinds of different forms. One of the most significant forms of risk is financial, and involves investment or lending decisions made to keep the business expanding and viable. Another form of risk comes in the investment sector, where certain types of securities involve a far greater financial risk than others. Yet another type of risk comes from the risk of injury or damage due to a product a company sells. All three of these areas are of central concern to those in the risk management field. Their job is to identify the business’ activities, assess the risk associated with those activities, and then calculate the risk exposure of the business based on how often it performs those activities. Once they identify the overall risk exposure of a certain business activity, like utilizing credit default swaps or distributing a defective product, they can begin to calculate its cost and manage its impact on the business.
Management of Risk: What it Takes to Keep a Business Afloat
Risk management professionals first identify a risk, and then calculate the company’s risk exposure by assessing the risk’s potential financial impacts. The second key part of their job is to minimize the financial impact of the risk on behalf of their employer. How do they do this? There are several key ways, based on the nature of the risk.
- If the company’s primary risk arises from consumer products, risk management professionals would insist on stronger quality assurance standards, greater insurance coverage and costs, and a strong legal defense team that could mitigate the risk for consumer lawsuits, class action proceedings, and other damaging events.
- A risk that arises from risky investments could cause a risk management professional to recommend a different investment strategy, alternate types of financial allocation, or a strong insurance policy that protects the company from financial devastation at the hands of a stock market downturn.
- If the company is excessively leveraged due to loans and bonds, a risk management professional would try to mitigate that exposure through consolidation of debts, renegotiation of payments, and other practices.
Related Resource: Certified Emergency Manager
Overall, this position is concerned chiefly with understanding the financial risks posed to a company and then managing them, or minimizing them, through insurance, alternative business styles, and renegotiation of contracts or lending products. According to Recruiter, if successful, the risk management specialist can keep their employer profitable, safe from legal action, and in good favor among analysts, consumers, and regulators.